Dental practice owners spend years building two valuable assets: their practice and the team behind it. Yet when owners think about investing in growth, retirement benefits may not immediately come to mind. However, they should.
A thoughtfully designed 401(k) can give employees another reason to build their careers with a practice while helping owners invest in their own financial future. Depending on the practice and plan, there may also be meaningful tax advantages and opportunities to manage costs through the right plan and provider structure.
That makes a 401(k) more than another line on a benefits package. Used strategically, it can become part of building a stronger, more stable practice.
Competing for Talent Beyond the Paycheck
Dentistry is a people business. Hygienists, dental assistants, office managers, and other team members influence everything from the patient experience to productivity and the ability of a practice to grow.
Keeping good people matters.
When a practice falls into a cycle of constantly hiring, onboarding and retraining, the effects ripple through the business. Other employees take on more work. Patients encounter new faces. Owners spend valuable time rebuilding their teams instead of moving the practice forward.
Compensation will always matter, but it’s not the only way owners can compete for talent. A retirement plan gives employees something beyond a paycheck. It gives individuals a structured way to build financial security over time.
It also sends an important message, which is that the practice is invested in their future. That matters for leadership. A dentist who owns a practice is not only a clinical expert but also a business owner and team leader. Helping employees build greater financial security is one way to show that leadership and create a workplace focused on the long term.
The goal isn’t simply to fill today’s open position. It’s to build a team that doesn’t need to be rebuilt every year.
Build a Benefit Employees Can Use and Appreciate
Simply having a 401(k) doesn’t automatically make it a valuable employee benefit. The plan has to work for the people it’s meant to serve. That starts with understanding the team and thinking through elements such as eligibility, employer contributions and vesting. For example, extending an employer match can make the benefit even more valuable if it makes sense for the practice.
Ease of use matters, too. Features such as automatic enrollment can make it easier for employees to start saving, while clear education can help them understand the benefit and make informed decisions about their retirement.
Owners should also pay attention to what happens after the plan is introduced. Are people participating? Do they understand the benefit? Are they taking advantage of the resources available to them? If not, it’s worth asking why. The answers may point to opportunities to improve the plan itself or even how it’s being communicated.
At the end of the day, a retirement plan should work for the people it was created to serve.
The Owner Should Benefit, Too
There’s another person practice owners shouldn’t overlook when thinking about retirement benefits: themselves. Business owners have a natural tendency to invest back into the business, whether in the form of new technology, equipment, another operatory, additional staff or a new location. Those investments can be essential to growth, but they can also make it easy for their own retirement planning to take a back seat.
A successful dental practice can become a significant financial asset. It shouldn’t necessarily become the owner’s entire retirement strategy.
A 401(k) provides another way to build financial security outside the future value or eventual sale of the practice. Depending on plan design and individual circumstances, owners may be able to make tax-advantaged retirement contributions while giving employees the same opportunity to save. Eligible small businesses may also qualify for certain tax credits. But tax incentives are only one part of the economics. Owners should also consider the ongoing cost of the plan and how those costs may change as the practice and its retirement assets grow.
There is an important distinction here: building value in a practice and building financial security outside of it are not the same thing. As the practice becomes more profitable, owners should periodically ask whether their retirement strategy is keeping pace. What made sense during the early years may not be what best serves a larger team, a more established business or an owner getting closer to retirement.
Keep Complexity from Getting in the Way
For someone who is already balancing patient care, staffing and the day-to-day demands of ownership, adding another administrative task can make even an impactful benefit feel like one more thing to manage. That’s why evaluating a retirement plan should go beyond investment choices or a list of features. Owners should understand how the plan will actually work inside the practice.
How easily does it work across payroll providers, now and as the practice grows? Who handles ongoing administration and compliance? What support is available when questions arise? How are fees structured, and what happens to those costs as the plan grows? Does the provider offer flexibility in investment options, or are choices limited by its platform?
These sound like operational questions, but they have a real impact on the business. Every hour an owner or office manager spends dealing with unnecessary administration is time that could be spent somewhere else in the practice.
More features don’t automatically mean a better plan. The goal is to find an approach that works for employees and the owner without creating unnecessary work for the business.
Owners should know what they are paying for, what support they are receiving, and whether the plan can grow along with the practice. That includes understanding whether fees are flat or increase as plan assets grow. A fee structure that looks economical today may look very different as the practice and its retirement assets become more successful.
What Works at Five Employees May Not Work at 25
A retirement plan shouldn’t stand still while the practice changes around it. A solo dentist has different priorities from an owner building a first team. A five-person practice may have different hiring needs and financial resources than a practice with 25 employees or multiple providers. Profitability changes. Staffing changes. The owner’s financial goals change.
The retirement strategy should change with them.
That means periodically reviewing plan design, employee participation, contributions, costs, and administration. Is the benefit helping the practice compete for and keep good employees? Do employees understand and use it? Does the plan still fit the size and makeup of the team? Is it still supporting the owner’s own long-term goals?
The point isn’t to keep changing a plan for the sake of change. It’s to make sure a decision made for yesterday’s practice still works for today’s business and where the owner wants to take it next. Dental practice owners routinely invest in technology, equipment, and their physical space because those enhancements can make the practice stronger. Investing in the people behind the practice deserves the same consideration.
A 401(k) will not solve every workforce challenge. It cannot make up for weak leadership, an unhealthy culture or uncompetitive pay. But when those fundamentals are strong, retirement benefits can reinforce them by giving employees another reason to see a future with the practice.
That’s the bigger opportunity: build a practice where great people want to stay while making sure the business you are building today is also helping you prepare for the future you want tomorrow.
ABOUT THE AUTHOR
Hunter Claxton is senior vice president of strategy at Ubiquity Retirement + Savings, a small business retirement solutions provider, where he oversees enterprise strategy, growth initiatives, and cross-functional alignment. During his more than 12 years with Ubiquity, he has held roles in business intelligence and strategy, using data and insights to inform growth and strategic decision-making. He studied at the University of Colorado Boulder and lives in Truckee, California, with his family.
Figures and Images
Hunter Claxton
