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Dentists, Puns, and Money is a podcast focused on two things: The financial topics relevant to dentists leaving clinical practice and the stories and lessons of dentists who have already done so.
1. The stories of dentists who have transitioned from full-time clinical dentistry.
2. The financial topics that are relevant for dentists making that transition.
If you’re a dentist thinking about your exit from clinical, and you’d like to learn from the experiences of other dentists who have made that transition, be sure to subscribe to your favorite podcast app.
Host Shawn Terrell also dives deep into the many financial components of exiting dentistry, including tax reduction strategies and how to live off your assets.
And, we try to keep it light by mixing in a bad joke… or two.
Please note: Dentists, Puns, and Money was previously known as The Practice Growth Podcast until March 2022.
Shawn Terrell (00:02.38)
Welcome to Dentist, Puns and Money. I am your host, Shawn Terrell. Back in my 20s, which was a few decades ago, I used to watch a show frequently called South Park. Many people of a certain age will probably remember that show. I liked the witty sarcastic humor, so much so that in the days before DVRs and on-demand apps, I used to record South Park,
I think it was on Wednesday nights now that I remember it, using a VHS VCR and setting the timer for it. That's how much I liked the show. to show. At any rate, there was one episode about a timeshare presentation and several of the characters' parents in South Park getting caught up in a timeshare presentation and unable to...
be able to leave the timeshare presentation. Now, I don't really know anything about timeshares other than the stereotypical jokes about that, which was kind of what the episode was about. Don't own any, I'm not recommending that. But I think of that episode once in a while, any time that I have to visit the IRS website to try to find some number for something or try to verify some piece of information on the IRS website.
Because I'll click on a link to find the uniform life table for required minimum distributions. And I feel like half the time when I do that, it just takes me to another screen, which has a whole bunch more information on, except what I was clicking on the link to find. So it's like this huge vicious cycle, this big loop, kind of like I have heard and in that South Park episode, seen a timeshare presentation described.
With that as a backdrop, I am hoping to help you start 2025 on the right foot financially with some important information about your finances that you don't have to go digging through the IRS website to find and getting caught in a feedback loop like a timeshare presentation. So every year, a lot of the important financial numbers for that calendar year go up a little bit from the previous year, they're indexed.
Shawn Terrell (02:24.075)
just like the price of everything goes up a little bit every year. Maybe you've noticed that the last few years. So for example, I think when the Roth IRA was originally introduced like 30 years ago, maybe now, like the maximum amount you could put into it was $2,000 a year. Well, for 2024 and also for 2025, it's $7,000 a year. Or for a traditional IRA, I know it's $7,000 a year for 2025 as well.
That's an example of a number that's not changing for 2025, but how much you could put into your 401k is going up by $500 a year. for 2024, it was like $23,000 a year and now it's 20, add $500 more to that, $23,500 for 2025. So without getting into the weeds of every number, this episode...
is going to provide a link at the end for a way to download all the most important numbers that you will need to start planning for 2025. I know a lot of dentists that are at the end of their career, they're probably trying to stuff as much money as they can away on a tax deferred basis, because they hopefully have everything paid off, have the least amount of deductions to the business that they've ever had and are making really good money. So being able to...
stuff as much as you can away and pay tax theoretically at a lower rate after you exit clinical is a good tax hedge play if you can do it. to that point, people that are older than 55 is where the catch-up contribution starts for
Speaking of that, people that are of a certain age, age 50, have in the past and again will have in 2025 the ability to defer more than the 23.5 that I just mentioned. The catch-up contribution for 2025 is...
Shawn Terrell (04:34.227)
Sorry, I'm scrolling in real time.
Shawn Terrell (04:41.768)
Still $7,500. So the big difference this year though, if you haven't caught it, is that if you are age 60 to 63, the catch-up contribution that you can contribute beyond the 23-5 actually is higher than the age it is at 50. So if you're between ages 60 and 63, you can actually contribute an additional $11,250 to your...
401k or your qualified plan in 2025. So doing the math on the fly, $34,750 is the max. That's kind of a big deal. And it's almost $4,000 more than it used to be or was last year at least. So I wanted to mention that because I did not catch this until I started preparing for this podcast that that's sort of a new thing that there's a higher
catch-up limit at age 60 than existed before. That's because I believe it was introduced with the Secure Act 2.0, which was finally passed a few years back. again, the big surprise or the big headline maybe that might make sense for late stage dentists is that you can stuff a little bit more money away into a tax-deferred account than you could in the past. So make note of that.
I'm not going to go real long this week. It's the end of the year, but what I will do is provide you with the ability to download all of what are considered the most important numbers to know for 2025. So if you're listening to this episode on a podcast app, scroll down to the show notes, scroll down a little bit to the middle of the show notes, and there should be a link there called "Resources from Episode." from episode.
Click on that link and you will be able to enter your email and have a download sent to that email address with all these numbers that some of which I've referenced today and some other important numbers that are not worth talking about ad nauseum in a podcast. If you are watching on YouTube, go to the main channel for dentist exit planning, click on the main link and there should be a way there to.
Shawn Terrell (07:03.429)
get to the page where you can download all these 2025 important numbers, like the updated tax brackets, the total amount you can contribute to the qualified plan, the catch-up amounts, the factor to use, if you want to check the math for how much your required minimum distribution is supposed to be, all that stuff, all those numbers, all that information is included in this downloadable link. So check it out, and I hope that helps.
I'm Shawn Terrell. We're right at end of 2024. Hope you have a great new year and we'll see you again in 2025.