As of 2025, there were approximately 200,000 dentists practicing in the United States. Of these, nearly 35% of them were 55 years or older. In 2023, the average retirement age for a dentist was 69, up from 62 in year 2000.
Given the increase in the retirement age, some dentists may be leaving money on the table by deferring the sale of their practice.
This article examines if there is an optimal age financially for a dentist to retire. This most certainly depends on the facts and circumstances for each practice. However, after assisting hundreds of dental transitions, we have seen a financial pattern. Our experience shows there may be a better time, or an optimal age, where a dentist can maximize the value of their practice, still take home an industry-average compensation for the work provided, all while minimizing the financial risk associated with operating and selling their practice over time.
So, what is that age? Based on our analysis, it appears that age 62 is the age at which the maximum value is recognized for a dentist selling their practice.
Most financial advisors will help their clients along their retirement journey by advising on proper investment allocations, tax strategies, and looking to the future to make sure adequate savings will be there when needed. However, the topic of when to retire to obtain maximum value is often overlooked. In my analysis, the optimal time to sell your practice is independent from the dentist’s balance in their 401k or retirement accounts.
A dentist who has maxed out their 401k during their entire working career could be in a stable position and ready to retire in their fifties. On the other hand, a dentist might have saved very little during her working career and will be forced to work late into their seventies.
In completing our analysis, we made several assumptions. All assumptions are based on our dental industry experience:
- Average practice revenue held constant at $867,000 with dentist production representing 67% of overall practice production
- Dentist’s compensation averages 34% of production
- Dentist production declines 5% annually from age 55 to 60, 10% from age 61-65, and 15% from age 66 and older
- Assumed a 5% investment/discount rate to calculate the net present value of future dentist earnings
- Dentist files married filing jointly for tax purposes
- Goodwill allocation to be 50% of purchase price (taxed at marginal gains rate of 15%, unlike capital asset allocation which is usually taxed at an assumed 30% marginal tax rate)
Holding all of these assumptions constant, we have calculated the practice sales price assuming price-to-revenue multiples of 70%, 75%, 80%, and 85%, as shown in the graph below.
Under all scenarios considered, we found that the net present value of future earnings to the dentist is lower than the after-tax sales price of the practice at 62 to 63 years of age. This is due to a few factors.
First, from ages 50 to 55, the dentist is still very productive and take-home pay is higher because of this. Unless the practice can sell for an unusually high multiple of revenue or the dentist has a substantial investment opportunity that can be taken advantage of with the proceeds, there is no way to make up for the lost compensation that will occur over the next five to ten years.
So, while our analysis shows this, it is also our experience that dentists selling their practice prior to age 58 will usually net less income in the long-term when compared to a dentist holding on to the practice and working until after age 58.
Second, once the dentist reaches their mid-to-late sixties, production typically declines considerably, thereby further reducing net take-home pay. To exacerbate this problem, our experience shows that the overhead of practices with dentists late in their career are typically higher than the average practice resulting in an even lower price-to-revenue multiple.
This leads us to believe that there may be a precise cut-off point in a dentist’s career where the benefit of selling is greater than the benefit of working a few more years for declining take home pay.
As mentioned previously, the optimal financial retirement age does not depend solely on this type of analysis.
The individual’s retirement account balance and desired lifestyle are very important considerations. However, if the dentist is interested in maximizing lifetime compensation and overall retirement benefits, the early sixties appear to be the golden years for dentists.
Looking for More Insights for Your Dental Practice?
To help dental practices evaluate their performance and plan ahead, Blue & Co. is offering a free, abbreviated version of the benchmarking report. For access to the complete report and personalized guidance, reach out to our Dental Services team below or complete the contact form found at www.blueandco.com/contact.
