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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 (00:07.063)
Do you ever notice that if you have something hard to do, it's better to do it right away or first thing in the morning? Like the longer you wait to do that hard thing, the more time you waste dreading it. And there's a decent possibility that you talk yourself out of doing it at all. But in the instances where you have done the hard thing right away, the rest of the day goes much better. Like there's this endorphin hit and maybe a little self-pride that comes with completing
said task right away instead of stalling and dragging it out for a while. Hi, I'm Sean Terrell. am your host of Dentist Puns and Money. This podcast is brought to you by Dentist Exit Planning. At Dentist Exit Planning, we help dentists that are leaving clinical in the next two years build their financial treatment plan for life after dentistry. As we continue our podcast mini series with a focus on taxes, there's a
book that is seemingly focused on the concept that I just mentioned. It's called Eat That Frog. The premise is that if you have something to do that is not enjoyable, but you have to do it, like something like eating a frog, it's best to just do it right away and get it over with. Now, I've never actually read this book and neither has Dr. Bill, so apologies if I was misled by Amazon and completely have misrepresented the premise.
But the book, as I understand it, offers a good analogy for why dentists should consider Roth IRA conversions later in life, like right after leaving clinical. In a recent podcast, I talked about some of the issues that can pop up when required minimum distributions are so big that
they cause unintended consequences like paying more in taxes and potentially some other out-of-pocket costs in retirement that could otherwise be avoided. And one of the reasons that RMDs get too big is because someone has too big of a pot of deferred money. And one of the reasons why that can happen is people don't want to pay the taxes to access deferred money. So they avoid access to those counts
Shawn Terrell (02:25.792)
where taxes will be due and they effectively lock themselves out of their own money because they don't want to pay the taxes due on it. It's sort of counterintuitive and it sounds a little crazy, but I have encountered people that develop this mindset. And the reality is with deferred money, someone is going to have to pay taxes due at some point in time. It is inevitable. That's why there are required minimum distributions.
That's why there's a 10 year rule for beneficiaries to liquidate deferred accounts. And so for those that can come to terms with the fact that these taxes on deferred accounts are unavoidable, one strategy to mitigate the taxes is Roth IRA conversions, which is taking money from these deferred accounts like 401ks and traditional IRAs and converting some of the money in these accounts into
either a new Roth IRA or an existing Roth IRA. And when Dr. Bill eventually does leave clinical, and he eventually does do this, he will pay ordinary income tax on this converted amount for the year that the conversion happens. But with every dollar that Dr. Bill converts to a Roth IRA, that's one less dollar that will not most likely be subject to taxation ever again. And that's one less dollar that will be subject
to an RMD during Bill's lifetime. And so by systematically converting money with deferred taxation to a Roth IRA, Dr. Bill will reduce the amount of his retirement money that is subject to RMDs later on. And that's one big reason why Dr. Bill and others leaving clinical should consider Roth IRA conversions.
And there are other reasons when you convert your money to a Roth IRA and not
Shawn Terrell (04:25.835)
And there are other reasons. When you convert money to a Roth IRA, you and not the IRS are in control of the timing for when that money is taxed. And as a result, Dr. Bill can hopefully time that in an advantageous way so as to pay the least amount of total tax over his lifetime. Remember, that's the big tax planning goal. More on the timing of Roth IRA conversions on this podcast.
in the near future. When a bigger pool of deferred money is subject
Shawn Terrell (05:09.835)
When a bigger pool of deferred money is subject to RMDs, it also increases the likelihood that more Social Security can be taxed or that there are higher Medicare costs down the road. Now, maybe those two things are avoidable anyway, but it's nice to decrease the probability of more tax and more cost later on.
One final benefit of Roth IRA conversions is that if done correctly and strategically, the end result is a pot of money that can be accessed tax free at any time down the road. And as I mentioned in our recent podcasts about tax diversification, that is no small thing.
Shawn Terrell (06:03.012)
One final benefit of Roth IRA conversions that if you do it correctly and strategically, the end result is a pot of money that can be accessed tax free, no strings attached, no questions asked at some point down the road. You do have to wait five years, technically. As I mentioned,
Shawn Terrell (06:29.478)
One final benefit of raw-thiary conversions is that if you do it right, strategically and correctly, the end result is a pot of money that can be accessed tax-free at some point down the road later in retirement. And as I mentioned in our recent podcast about tax diversification, that's no small thing because over a 30-year retirement,
the likelihood is high that Dr. Bill is gonna need a big chunk of money some point unexpectedly at some point over in retirement. And as I mentioned in our recent podcast about tax diversification, that's no small thing because over a 30 year retirement, the likelihood is high that Dr. Bill is gonna need a big chunk of money unexpectedly at some point. And if he has this big pot of tax free money,
resulting from these Roth IRA conversions way before years earlier, then getting his hands on a chunk of money won't have any trickle down effect that leads to him getting hammered on taxes in one particular year later in retirement. And that's why Dr. Bill plans to
Shawn Terrell (07:49.406)
That's why Dr. Bill plans to whittle down his deferred money after leaving clinical, but before he really has to, because that looming tax bill is like the frog that has to be eaten. The best way to do it would just be to get it done as soon as possible and not make the experience any more miserable by thinking about it for a long while ahead of time. And that's why Dr. Bill plans to whittle down his deferred money
And that's why Dr. Bill plans to whittle down his pot of deferred money after leaving clinical, but before he really has to do that because that looming tax bill is like the frog that has to be eaten. The best way to do it would be just to get it done as soon as possible and not think about it forever and make the experience any more miserable than it has to be.
And that's why Dr. Bill plans to whittle down his pot of deferred money at some point after leaving clinical, but before he really has to tap into it because that looming tax bill is like the frog that has to be eaten. The best way to do it would be to just get it done as soon as possible and not make the experience any more miserable by thinking about it for a really long time ahead of time.
That mindset is a good example of why Dr. Bill is planning to complete a series of Roth IRA conversions in the years after he exits clinical practice. We will continue our discussion on Roth IRA conversions and tax planning in general in the next few podcast episodes. Speaking of taxes, if you would like a reference of the many rules and the current numbers in effect,
We have a free tax cheat sheet that we can send you. It includes the changes that go into effect now that it's 2026. And whether you're watching on YouTube or you're listening on a podcast app, go to the show notes and look for episode resource. Again, episode resource. If you click there, we will email you our 2026 tax cheat sheet. Also, if you are a dentist and you're leaving clinical,
Shawn Terrell (10:04.936)
and the next few years and you're interested in a personalized consultation with Dentist Exit Planning, you can schedule a no obligation virtual meeting with me. And to do that, you just go to DentistExit.com, click on free consultation at the top right corner of our homepage. One final reminder, Dentist Exit Planning is a registered investment advisor. The information presented here should not be interpreted as investment, legal, tax.
financial planning or wealth management advice. It's for educational purposes only and past performance is not indicative of future results. Thanks for watching and thanks for listening. I'm Sean Terrell and we will talk to you again very soon.