Dentists: Now’s the Time to Upgrade Your Retirement Plan for 2025

At DrillDown Solution, we specialize in helping dentists and dental practice owners build smarter tax strategies through customized retirement plans. If you’re still using a 5305-SEP IRA or haven’t yet set up a 401(k) or Cash Balance Plan, the window to make a strategic move for 2025 is closing fast.

Whether you’re a solo dentist or own a growing dental practice, acting now can dramatically reduce your tax burden and supercharge your retirement savings.

IRAs vs Employer-Sponsored Plans for Dentists

While traditional and Roth IRAs offer a starting point for retirement savings, they have low contribution limits and minimal tax advantages compared to employer-sponsored plans like a 401(k) or Cash Balance Plan.

As a dental CPA firm, we often see dentists missing out on tens of thousands in deductions because they delay moving to a more advanced plan. With the right setup, you can reduce taxable income, retain top dental talent, and build wealth tax-deferred.

3 Powerful Retirement Plan Options for Dental Practice Owners

✅ SEP IRA (5305-SEP)

• Often used by solo dentists or small dental practices.
• Employer-only contributions up to 25% of compensation, capped at $69,000 in 2024.
• Easy to set up, but restricts you from offering any other retirement plan (like a 401(k)) in the same year.
• Requires giving the same percentage to all eligible dental staff.

✅ 401(k) Plan for Dentists

• Employees can contribute up to $23,000 in 2024, plus a $7,500 catch-up if age 50+.
• You can offer:
  • Employer matching (e.g., 100% match on the first 4%)
  • Profit-sharing contributions to boost savings up to the $69,000/$76,500 limit.
• Ideal for growing dental practices looking to attract and retain hygienists, assistants, and associates.
• A Safe Harbor 401(k) eliminates nondiscrimination testing and is especially helpful in dental offices with high-earning owners.

✅ Cash Balance Plan for High-Income Dentists

• A defined benefit plan designed for maximizing tax deferral—often $100,000 to $300,000+ per year.
• Can be layered with a 401(k) plan for massive deductions.
• Perfect for dental specialists, multi-location practices, and practice owners in peak earning years.

Retirement Plan Deadlines for 2025

SEP IRA Users: You Can’t Combine with a 401(k)

If your dental practice currently uses a 5305-SEP IRA, you’re not allowed to sponsor a 401(k) or Cash Balance Plan in the same year. To start a 401(k) plan for your dental office in 2025, you must:

1. Make your final SEP contribution for 2024, and
2. Avoid all SEP contributions in 2025

Many dentists unintentionally delay their upgrades by making SEP contributions early in the year without realizing the restriction.

DrillDown Solution Makes It Easy

At DrillDown Solution, our dental CPA team works exclusively with dentists, dental specialists, and multi-location practices. Through our shared family office model, we offer:

✅ Expert retirement plan setup for dentists
✅ Low-fee, high-quality investment options
✅ Seamless plan administration and compliance
✅ Integrated tax planning to maximize deductions and net savings

Whether you need to replace your SEP IRA, build a 401(k) with matching, or add a Cash Balance Plan for deeper savings, we’ve got the tools and expertise to help you thrive.

Final Word: Dentists, Act Now Before It’s Too Late

The best dental retirement plans require proactive setup. If you want to implement a Safe Harbor 401(k), avoid SEP limitations, or design a tax-optimized plan for your dental business, the time to act is now.

Contact DrillDown Solution today to upgrade your retirement plan and turn tax dollars into long-term wealth—for you, your family, and your team.