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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 (00:01.708)
Welcome to Dentists, Puns, and Money. I am your host, Shawn Terrell. Quick backstory. We have had an uninvited guest at our house the last few weeks. And anyone that has young kids like we do or remembers what it was like to have young kids knows that when you have guests or company staying at your house, one of the last things that you want is that company waking up your young kids early in the morning.
But that's what this guest has been doing the last few weeks. He's an early riser and he goes by the name Marshmallow. He's our Elf on the Shelf. And if you happen to be listening or watching with young ears around right now, now might be a good time to hit pause and revisit this episode later. So I don't have any spoilers or I guess this would be your spoiler alert. So
point being with the Elf on the Shelf the weeks between Thanksgiving and Christmas are really busy under normal circumstances and if you're like us right now every night we're having to figure out what hijinks Marshmallow is gonna get into the next day so it's just sort of one more thing to think about with the craziness of the holiday season so this is all a big qualifier for
I'm about to give you some financial pieces to think about, analyze, consider, to get done by the end of 2024, understanding that now is a really busy time and it's hard to put one more thing on people's plates. I probably should have gotten this episode out back in November, but I was too busy talking about all my strokes. So maybe next year I will get this end of year episode out a little bit earlier, but
Then again, I have found that sometimes the more people, the more time people have for things, the longer they stall. So the fact that this episode should be dropping with just about two weeks to go to the end of 2024, and the fact that Christmas and New Year's being in the middle of the week this year sort of make those weeks a little bit of a wash, this might be a really good for.
Shawn Terrell (02:26.741)
forcing mechanism to try to get a few things done by the end of the year and stick around till the end of the episode where I will give you a way to download a checklist for all the things that you should think about analyzing or assessing or taking a look at, financially speaking, by the end of 2024. But for time and our purposes today, I'm just gonna focus on...
Four main things that I think are important for a dentist who is getting near the end of their clinical career or already at the end of their clinical career and living in quote unquote retirement. So without further ado, the first financial thing that you should take a look at by the end of 2024, if you haven't already is converting
some portion of a taxable account or a taxable IRA, let me back up, a tax deferred account or a tax deferred IRA into a Roth IRA. And the reason for that would be if your income now is lower than it's going to be in the future, it might make sense to pay some taxes now, convert money into a Roth IRA and then
hopefully never have to pay tax on that money or the growth of that money ever again, which is the way the Roth IRA is currently designed. So we know with the sunset of the Tax Cuts and Jobs Act at the end of 2025, or as I record this, it's supposed to sunset at the end of 2025, a lot of people's taxes will be going up after 2025. So...
Tax year 2024 and tax year 2025 will be a really good chance for people to pay the devil they know as it relates to taxes. And one of the ways to do that is by converting some tax deferred money in a 401k or an IRA into a Roth IRA paying the tax now, but then hopefully not having to pay more tax over the long run. That's going to depend on each person's individual situation and what
Shawn Terrell (04:44.764)
their income or taxable income looks like on their tax return for 2024. So you want to have a pretty good sense of that before you make that move because it's a irreversible move. And it's also a move that has to be done by the end of the calendar year. So you got to do it sooner than later if that's something you're going to look at. Financial consideration number two by the end of the year is make sure
If you have to take a required minimum distribution or an RMD from any tax deferred accounts that you are doing so by the end of the calendar year by the end of 2024. The penalties for not taking that RMD are not as steep as they used to be, but they are still really steep. So you want to make sure that if you have to take a required minimum distribution that you do so by
the end of the year and your custodian where you have that account or your financial advisor that is in charge of that account should help you do that or alert you to the fact that that has to be done.
Yeah, You should already be working on that if you haven't done so already because a lot of the processing dates for these withdrawals are coming up very, very soon as I record this. So hopefully you're getting that RMD done and The rules and the ages that people have to take an RMD have changed a lot in the last five, 10 years. So make sure if you're around age 70, 75 that you are very aware
of how the new age, ages, age minimums have changed relating to your situation. So, The penalty for missing that is big. And make sure you understand how RMD's differ from different types of tax deferred accounts like 401ks, IRAs, 403b's, things like that. And do not forget about the required minimum distributions
Shawn Terrell (06:54.693)
that may be due if you have inherited an IRA from a non-spouse, a parent or another relative that left you a tax-deferred IRA. There might be some minimum distributions that you have to take this year, 2024, depending on what your age is and depending on the circumstances surrounding when that IRA and how that IRA was inherited. Consideration number three, financially,
by the end of 2024 is take a look at tax loss harvesting if you have taxable investment accounts. So very broadly speaking, the market has done very well in 2024, which means a lot of people have gains in their accounts. And depending on the account, there's probably some securities or companies in there that have not done as well in 2024 for whatever reason. So...
There's a way to offset the taxes that maybe do on some of those gains by harvesting losses in the accounts that haven't done as well or the companies that haven't done as well. There's also a way to carry forward some of those losses to future years or offset your income this year with losses from previous years. So just pay attention to some options that you might have for tax loss or tax gain harvesting
at the end of the year. Finally, number four, I told you I was gonna hit four, this one's a little bit longer, but just check what your threshold is income-wise on some of the big things towards the end of the year. Like how close you are to a different tax bracket, how close you are to the net investment income tax, how close you are to jumping from 15 to 20 % on the rate for long-term capital gains, or how close you are to
jumping into a surcharge on Medicare depending on what your income is. And if you are really close to any of those thresholds on going over and potentially having to pay more on taxes or surcharges, there can be ways proactively to avoid that if you take action by the end of the year. A couple of those ways might be...
Shawn Terrell (09:10.55)
contributing to a health savings account to lower your taxable income if you have the ability to do that, making sure that's maxed out with the catch-up contribution if you're over 55. Contributing to 401k or making sure you're maxed out there on your profit sharing plan or your cash balance plan, depending on what you have set up through your business. And then finally, if you are charitably inclined, there might be a way to avoid...
some extra taxes on things by taking a qualified charitable distribution from one of your tax deferred accounts or some other things around charity can be done. If you're going to give money anyway, there's ways to do so in a tax efficient way, if that makes sense, broadly speaking. All right, there you have it. Four money issues to sort of analyze and take a look at or verify before the end of 2024, the calendar year.
doesn't mean or Doesn't leave much time to get that done, consider putting your Elf on the Shelf to work on this since he's sort of just sitting around the house this time of year a lot during the day. I'm gonna put Marshmallow to work on some of the tasks that I have to get done by the end of the year. Kidding. But if you would like a checklist for these four items and some of the other big ticket items that you should take a look at financially by the end of the year,
I have a free download that you can have. If you're listening to this on a podcast app, go to the show notes and click on "Episode Resources." And that will take you to a link where you can download a 2024 end of year considerations checklist. If you happen to be watching this on YouTube, go to the Dentist Exit Planning YouTube channel, click on one of the main links there. And that should take you to that same place where you can
download the 2024 year-end financial checklist. Yeah, that's sort of all I've got as we sort of wrap up 2024. Hope that helps. you are maybe got the ball moving on some of those things already, but hope that checklist helps you out. I'm gonna go check on Marshmallow before it gets into any more mischief.
Shawn Terrell (11:27.404)
And as always, thanks for watching, thanks for following along. I'm Shawn Terrell and we'll see you next time on Dentists, Puns, and Money.