Dental Unscripted | Getting into Ownership and Practice Management Insights

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Welcome to Dental Unscripted.

Where Mike Dinsio and Paula Quinn break

down the practice ownership journey,

one episode at a time.

Starting up, buying,

and running a successful dental practice.

All right, all right, guys.

Welcome back to another episode of Dental

Unscripted.

My name's Mike D'Inzio, you guys know,

and Paula Quinn, my co-host, is here.

Good morning.

It's podcast day, next level.

I'm excited.

Here we go.

It's another day of a bunch of episodes.

Hey, guys, we do these live,

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We don't make money doing this,

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get a lot out of it today we're

going to discuss all things kind of wealth

building and there are some tools to do

that and one of those is for one

k and we are so blessed to have

caitlyn bryan with kane waters and

associates um they obviously are a

powerhouse in the industry have a

fantastic reputation and we love referring

to them and them us and uh

they just know what they're doing.

And so we're lucky to have someone like

Caitlin on the team today for today's

podcast.

So welcome to the show, Caitlin.

How are you doing?

Good.

Thank you for having me.

Excited to be here.

Yeah.

So are you in Dallas?

Is that the background in Dallas?

I am in Dallas.

Yeah.

And we had a big ice storm come

through last week,

but now we're in sunny and

Did the world come apart?

I know like it's in states like that.

You're not used to that stuff.

It's like no school Monday through

Thursday, kids home chaos working.

It was a nightmare,

but we got it and we had,

you know, minimal sledding injuries.

So we're calling it a win all the

way around.

no sled injuries for the win i love

it that's awesome i last time i uh

sledded i i that was not a win

for me my butt still hurts but um

okay cool we wouldn't even i don't even

think that would ever happen here maybe

maybe you look no no you're gonna get

some of the states it doesn't really

happen in but yeah we didn't you guys

get sunburned there you go oh yeah

Well, look, guys,

today's topic is all about financial

wealth.

We're going to really deep dive into some

four or one case stuff.

And before we kind of do that,

I always like to like tee up the

guests.

So, Caitlin,

why don't you tell us just a little

bit about your company?

I know you guys do a lot.

Would you mind just kind of giving us

if if our audience doesn't even know you

are just a little bit about you guys?

Yeah.

So we are Cane Waters and Associates.

We've been around for over forty years.

We specialize.

Initially,

we got our start in the dental world,

providing business consulting,

not in terms of how to run your

hygiene more efficiently or how to your

front office should answer the phone.

But, hey,

here's some metrics you can look at or

when should you be increasing prices or

where do you fall compared to your peers?

Financial review.

tax saving strategies.

We also have a full,

we're a CPA firm as well,

a full CPA tax and accounting.

And then we also now handle investments.

So this is actually,

I'm going to really age myself here.

I'm starting my seventeenth year at Cane

Waters.

So I have been around the block with

them the whole time,

at least half the time.

And I lead our wealth management group.

So now I focus primarily on investments.

I've actually stepped back from the dental

world a little bit and more focused on

investments in general for everybody.

Any high net worth individual that wants

to put money on platform can certainly

come through our group.

And we do have for one case specialists

that just work with clients who want to

open for one case.

But as a firm, you know,

our bread and butter is dental review,

business planning, tax strategy planning.

Our goal is that we save you our

fee plus a lot more that you can

save right back into our platform.

I love that.

Well,

it makes tons of sense to have your

CPA who helps you really plan tax events

and large liquidity events to match that

with a financial plan.

That's a big miss.

I think that's huge that you guys do

that.

I was on the phone yesterday with someone

that just bought a practice, Paul,

one of our clients up in Camp Verde,

and they're making money.

And I'm like,

what are you doing with it?

And they don't really know.

I was about to say that.

It was one of the things I was

going to say.

I've been in dentistry for,

I'll date myself,

I've been in dentistry for,

I'll date myself,

dentist didn't even think about for a one

case.

Well, maybe for themselves some,

but definitely not for team.

You know,

this is like amazing that we're having

this, but anyways, what,

what did the dentist up there?

You just said, Hey, you should,

it's just not,

it's just not even on their radar.

And I,

and I think dentists in general see their,

the sale of their practice as being that

big event.

And what I,

I was raised thinking about this stuff

from age.

Fifteen, fourteen,

and I put twenty five bucks a month

away in high school, like, right.

It's just the little disciplines that just

reigned in you from good parents.

It was it was my it was it

was my mom, not my dad.

He he my dad took the path of,

oh, crap,

I've got five years left and the

government lets me put way more in.

So I'll put my entire salary to catch

up.

I call that giving us a bigger band-aid.

Those are for catch-up years.

Yeah.

Yeah, it's exactly what it is.

But my mom put that in,

and I just have seen it.

So Next Level put a four-on-one K in,

and I know this is not HR compliant,

but I require every employee to put away

because it means that much to me,

and air quotes require.

So let's just talk about it, okay?

So saving a lot of money over time

obviously builds much bigger buckets.

So

You buy a practice, you start a practice,

which is a lot of the stuff that

we do over at Next Level.

Caitlin,

let's just start with a huge softball.

You'll knock it out of the park.

Why even a four or one K?

Why does it make sense to even implement

this in a practice?

Sure.

Take it from there.

That's a loaded question.

I know.

So every dollar that comes home from the

digital practice is subject to income tax,

right?

So what if we could limit the dollars

that come home and not pay tax on

every dollar?

So instead of paying tax on the dollar,

we're going to take a tax deduction for

every dollar we put into that for a

one K plan.

We find, I mean,

almost ten out of ten times that we

can fully cover our staff costs,

what the money we're rewarding our staff

in the four one K plan with the

taxes saved from the plan.

So we're basically taking the money that

we would be giving to Uncle Sam and

we're giving it to our employees instead.

And at the same time,

we're rewarding ourselves with a bucket

that grows tax deferred, right?

I mean,

or tax free if you elect Roth.

So tax deferred means the money goes in

the pot.

You get a tax deduction for it today.

Let's say it's thirty thousand dollars and

that thirty thousand dollars grows to be

one hundred thousand dollars in twenty

years.

You only pay taxes when you pull that

money out.

So everything that's growing for the next

twenty years,

you're not paying any tax on those

dollars.

It's a huge win.

You get compounding growth because it just

sits in your account and continues to

grow.

The other thing that's really awesome

about a four one K is if you

talk to anyone in the real world,

salary deferral, W two,

they don't think about it.

It's automatic.

It's automatic saving that's coming out of

your paycheck.

And you one day wake up and you

get your statement.

You're like, oh, my gosh,

look how much I saved.

Mm hmm.

That's such a special thing.

Like I like like forcing some of our

employees to get on the plan.

I'm like, hey, our admin,

I'll shout out and just say that, like,

hey, good.

I remember her first raise.

I was like, hey, good news.

You just got a raise.

bad news is you're not going to feel

it she's like what do you mean i'm

like well you're putting i'm giving you a

raise for exactly four percent of what

we're gonna match and you're not even

gonna feel it and there'll be a day

that i hope she calls me in fifty

years and says or maybe i'm dead by

then but uh she's like holy crap that

that grew that grew for me so i

you're a hundred percent right and i don't

think dentists probably sell it like that

to their employees they just kind of offer

it but

There's huge opportunity there in the tax

savings.

No doubt about it.

And I actually have a sidebar funny story

about what you just said.

When I was part of that Cane Waters,

I was here for a year and we

all got our raises.

And one of the planners came up to

me and was like, hey,

what are you going to do with your

raise?

And I was like, oh,

I don't know yet.

And he's like, well,

did anything in your life change?

And I said, no.

He goes, then you don't need it.

Put it all in the four or one

K. It was like very,

very matter of fact.

Okay.

Well now, seven years later,

I have a pretty good, you know,

bucket of money in the four or one

K plan.

And I saw him a few weeks ago

and I was like,

I give this advice to clients all the

time.

Did anything in your life change?

Nope.

Then you don't need this money.

Let's go ahead and save it.

And he didn't even remember telling me

that.

And it was like earth shattering news to

me, seven years ago.

And I was like, no,

this is all thanks to you.

And he was like, that I could help.

Yeah.

They call those lollipop moments.

I don't know if you guys have heard

that before, but look it up.

Google it.

I think it's a TED Talk.

But when someone lollipops you like that,

there's a whole thing about it.

TED Talk, it's pretty cool.

You can send people lollipops years later.

That's funny.

Yeah, it's great.

Well, Paula,

why don't you tee us off here with

the first question and Caitlin can kind of

spearhead this conversation.

Well,

it's funny because I was thinking like a

couple of things, you know,

we do a lot of startups and with

our startups, they're always, they always,

you know, they're cash poor.

They just started.

They've got their student loan.

They've got their now office loan or, or,

or whatever.

And they always say, what, you know,

I can't really provide benefits.

Like what benefits can I provide?

And I do always say,

I think four Oh one K is probably

the one of the most, I say cheapest,

which is maybe Caitlin,

you can give me a better,

better verbiage than that.

But it's, it's basically like,

you know,

you're matching what they put in up to

a certain percent, you know,

it's a great benefit that you can provide

to them.

But they will sometimes say to me,

they don't really care about that,

you know,

they care about the dollar for hours.

So I do want to ask you about

that.

But also, I wanted to say,

when I was opening my practice,

or I purchased my practice,

it was something I wanted to offer.

And I just felt like there were a

lot of parameters around it, like,

the matching and people contributing.

So I don't know if those go hand

in hand,

but I kind of feel like they do

because, you know,

here I'm giving them advice to do it,

but then I think there's like some,

some matches that have to happen and some

investment that has to happen for that to

come to fruition.

So can you kind of tell us a

little bit about that?

Cause these

you know,

they're going to go out and they're going

to, you know,

not know what they have to do to

maybe qualify for this and what they have

to offer to be able to offer this

to their employees.

Sure.

That also is kind of a loaded question,

but let's just like back it up a

little bit and talk about, you know,

what it takes to have a plan and

how you start it and then how people

even get into the plan.

So...

I'm always going to approach this

typically or approaching it from our

client perspective, which is the owner,

right?

Not the employee.

Although it makes a sticky employee to

offer this benefit because it shows that

you care about them, right?

Hey, I want you to save.

I want you to retire.

And whether they appreciate it or not,

they're getting some of those same

benefits other places.

So it makes you a little bit more

competitive from a benefit standpoint.

Yeah.

Another thing that I'll say is if they're

not valuing it,

it's because you're not doing a good job

telling them what it is because they

should be valuing it.

So the number of times we talk about,

you know,

when you're funding your employer

contribution and you're actually putting

in that match,

it's happening after the fact, right?

So employer contributions going in for

twenty twenty five aren't even due until

September fifteen twenty twenty six.

So think about that.

They've already made their money for

twenty twenty five.

They moved on.

And now you're going back and putting more

money in the pot for them in twenty

twenty five.

At some point,

you should be sitting down with your

employees and saying, hey,

this is not just your gross wages.

Let's go over your compensation package.

OK,

here is what I put into the plan

for you this year.

Here's what I'm planning to put in the

plan for you next year.

This is your health insurance benefit,

whatever benefits you offer,

and then sum it all up.

And that will be a much more impactful

number.

to the associate,

then maybe just the gross wages of X

numbers, you know,

fifteen dollars an hour or whatever it is

that you're paying your front desk staff,

etc.

I love that, Caitlin,

that you're teeing it up because it's just

like dentistry and Paula coaches our

clients on

teaching them to communicate the value to

the patient so the patients say yes.

It's all about that tee up, right?

It's like if you're not putting the energy

deserved into the conversation,

it won't have the same impact.

And that goes for explaining to your

employees the benefits also goes into the

patient saying yes to treatment.

It's the same thing.

Tee it up.

We also say when we're giving bonuses out,

like put it in envelopes and make it

a cash event.

And like literally count cash in front of

your team,

even if it's two hundred dollars.

Who cares?

It's a huge impact if you spend the

time versus just saying, oh, yeah,

look in your gusto account tomorrow.

It's in there like blah.

Oh,

my favorite bonus story I heard was that

one of the dentists took his stuff out

and gave them five hundred dollars in an

envelope and told them they couldn't get

back into the limo until it had all

been spent.

This is not about little Johnny's tennis

shoes.

This is you, mom.

Go treat yourself,

and you buy something you wouldn't

normally buy.

Get back in the car.

We're going to share what everyone bought

over lunch.

We did that.

Any money they didn't spend,

they had to give back.

I love it.

Yes.

You can't show their receipts that it was

on them, like you said,

and not on Johnny's.

Yes.

Yes.

Okay, so how complex are these plans?

I know they're regulated,

and I think that was what Paul's question

was.

Is it complex?

What goes into it?

I'm not going to lie.

This is going to be a little bit

of a headache.

It's not an easy process because there's a

lot of governing bodies that go into it.

And the whole point is the government

wants to make sure that if you are

getting a benefit out of this plan and

you are getting tax deductions as the

owner,

that you are in fact sharing that with

your staff.

And that's ultimately what it comes down

to,

and that's why there's all these –

tricks and games and classes of

individuals is in a non-discriminatory

basis.

So yes, it is slightly complicated.

But I'll tell you,

if you have the right team in place,

it's really smooth sailing.

So we work with providers.

Kane Waters does not do like third-party

administration,

but we have people who we refer to

who do this work day in and day

out,

who can bucket plan people into the right

places.

And like I said,

I'm approaching this from the standpoint

of the owner.

Our job is to get as much money

into the bucket for you

and as little as we can for your

staff.

Now,

we can always choose to put more in

for them, sure.

But ultimately,

we're creating this plan as a tax vehicle

for you.

The staff are getting it as a bonus.

Yes, it makes them sticky.

Yes, it creates retention.

But the reality is we wouldn't be opening

this if we weren't trying to get you

a benefit in the plan, right?

I love that.

Yeah.

You can certainly set parameters into who

is even eligible to be in this plan

to begin with.

So if you have a practice of eight

people and all eight are going to get

in, you can set minimum requirements.

The most stringent the IRS allows is one

year of service.

You don't get in this plan unless you've

worked for me for twelve full months.

You're over the age of twenty one and

you've worked over a thousand hours.

So if you have not met those parameters,

then you don't even get to enter the

plan in the first place.

So that might weed out if you have

a part-time employee that you're worried

about, hey,

they're going to get a benefit and they

don't really contribute as much as I might

want them to.

They're actually not.

They won't enter the plan.

I like that, Caitlin, because...

But I will say this,

and it kind of tees up my next

question for you about costs and

unforeseen expenses and stuff.

But before I ask you that question,

I will just kind of throw a blanket

statement out that I'm always surprised,

even as a business owner,

how little it actually is to the company

I'm thinking that that this like if I'm

a listener,

I'm thinking that this is super expensive

for me to implement.

And I thought that probably also when I

first set it up,

but it was important to me,

which is why I asked Paul and Paul's

like, duh, of course.

So we did it.

But then now when I look back on

it and what the company actually paid and

we do the math, the math,

the max is four percent, the match max.

It's actually not that much because

they're not making the same amount of

money you and I are making as owners.

So I think there should be a shift,

a mind shift there about like, look,

this isn't going to bankrupt you.

They don't make that much money.

You make all the money in the practice.

Right.

Is there a better way to say that?

I think that's a great way to approach

it.

And there are different ways.

So what you're talking about is a match

on the deferral.

So you are only rewarding people who are

actually saving for themselves.

That's one option.

Another option is what's called the three

percent safe harbor rule.

And that is anybody that is eligible to

be in the plan.

gets three percent of their salary,

and that buys you, the owners,

your salary deferral bucket with no

limitations.

So if you don't pass testing,

there's a chance that you might put money

in the bucket and the money comes back

to you.

And that is really frustrating because you

like planned on it from a tax deduction

standpoint.

You have to pay for that ten ninety

nine to come out.

And you're like, no, no,

I don't want this back.

I want that to grow tax deferred.

but you didn't pass testing.

So is it three percent safe harbor how

you do that?

Yes.

If you elect three percent safe harbor,

then you automatically are tax exempt from

a testing standpoint.

You're going to get your full salary

deferral bucket.

So I would say, you know,

base case going in,

be prepared to pay three percent of your

employees salaries for eligible employees.

Remember,

you get to set those parameters and what

they are and who enters,

but you have to do it on a

non-discriminatory basis.

Wow, man,

this is a lot more complex than I

thought it was.

I think Caitlin,

I'm sitting here questioning how we did

it.

That's right.

So, I mean,

that's a level up conversation.

Um, and, uh,

cause if I got my money back,

I'd be mad.

I like, I would be so frustrated.

That's right.

That's right.

So, so Caitlin, like, um,

before we move on to the next question

then, cause you,

you answered hidden costs or unforeseen

kind of expenses and how that affects your

account.

Sure.

Um,

like i mean how many combinations are

there is that a loaded question of

implementing a four or one k i mean

forget the eligibility part but just like

the structure how many options are there

you mean like with if you're involving

your team or just as an actual team

let's just say team because that that's

what they should do is team yeah

I think we should break it down simply

into two different buckets.

So you typically have your salary deferral

bucket.

That's like twenty four thousand five

hundred in twenty twenty six.

It kind of grows a little bit with

inflation every year.

Right.

That's the bucket you get as long as

you're paying your staff three percent.

You can make that a default.

Everyone gets three percent.

They're one hundred percent vested in

that,

which we'll get to in a little bit.

They get to take it if they leave

and they get that money outright.

Or you can do what you were talking

about being the profit sharing plan match

that also buys you that salary deferral

bucket on top of salary deferrals.

you can sock away a large chunk of

change through what's called an employer

contribution.

The employer contribution is only burdened

by the employer.

Only the employer is putting that money in

there.

So salary deferrals,

your employees put money in,

you put money in for yourself.

The employer contribution is what are you

putting in for your staff over and above

that three percent.

So if you want to fill your bucket

to the max,

you also have to give your employees

additional compensation.

And it's all based on what they're putting

in the plan.

So the more they save,

the lower your overall cost.

So you really do want to incentivize them,

which is why you also want to be

careful not to violate HR.

You want to incentivize them to save not

just for themselves,

but because it also makes your costs lower

in the end.

Didn't even know that.

Definitely not why he encouraged them.

Totally.

But in the bucket right now,

if you're less than fifty,

you can sock away seventy two thousand

dollars a year.

If you're over fifty, it's eighty.

And if you're the IRS's magical age of

sixty to sixty three.

Wait a minute.

Eighty three thousand two fifty.

Yes.

But Paula,

you got to throw that back to the

employees too.

Is it by a percentage, Caitlin?

It's not.

But I would say like a good tested

plan is that the owner is going to

get at least eighty percent.

I'm calling Caitlin when we hang out.

Call Caitlin.

Yeah, call me.

You should be getting, I mean, again,

now it depends.

If you have a bunch of associate doctors

in there, really high paid,

you can also choose to specifically

exclude non-owner doctors.

Huge.

You're not giving them the benefit.

You can exclude an entire class of people.

So we almost always exclude non-owner

dentists unless we're trying to grow this

to be an associate-led practice, right?

And we want to reward them.

That's a totally different conversation.

But giving the hook for someone to buy

into your practice into the future is when

you buy in,

you can have access to this plan.

So what I'm hearing is although it's

highly regulated and there's a lot of

options, as a business owner,

you have a lot of fail safes as

well for yourself.

Like you just said,

you can exclude and you do have some

control.

You have options to control even though...

there's a lot of regulations on investing

people's money and all that good stuff.

It's incredibly customizable,

but you don't know what you don't know,

which is why you have to know what

questions to ask and work with someone who

is in this field specifically because in

the dental world,

we can bifurcate employees into different

buckets and strategize to make the most

efficient.

Maybe you want to reward...

hygiene more than dental assistants,

or maybe you want to reward front office

more than, than somebody else.

Like we can customize that plan,

but ultimately the first proposal we're

ever going to run is how can we

get you the most money with the least

amount of staff costs?

That's a, okay.

Now you look at it and say, okay,

well actually I want to reward these,

this group more or less, et cetera.

And we can go back and finagle the

numbers, but you know,

your base case scenario, right?

Yeah.

That's amazing.

Paula's totally lost all of her questions

in her head.

And now she's thinking totally about what

she wants to do at next level.

You're crushing the interview today,

Caitlin.

You got a new client already.

Here we go.

Hey, we'll take it.

Where do you want to take this next,

Paula?

I mean,

there's lots that we could discuss.

Yeah.

I think one of the things, you know,

what I've seen lately, and I don't know,

this is kind of putting your feet to

the fire, Caitlin, so forgive me.

I have a lot of clients that sign

up with payroll companies online.

Gusto, ADP, whatever.

They've got options in there.

Why would I,

and maybe we just answered that with the

last question.

Why would I choose you over just setting

it up through something like that?

Through Gusto.

That's the new thing right now.

Oh, well, Gusto has HR, I'm like,

but yeah,

why don't you tell the listeners the

difference?

Because they're always looking for the

least expensive route.

But what I'm hearing is they could be

leaving lots of money on the table or

not picking the right

plan that benefits them the most?

But I'll let you answer because you're

the... I mean,

I actually feel like you just nailed it.

I know.

Hey, Caitlin, that's what Paula does.

She usually sells you the...

Because I just heard it.

So I'm like sitting here, but... No,

totally.

Well, basically what they're doing...

is how do you scale in that environment?

You take one template and you apply it

to everybody that walks in the door and

you're going to make them fit in your

mold versus creating the mold around their

needs, right?

So they're going to say, here it is.

This is what your staff cost is.

Take it or leave it.

Boom, go.

there are there's no customization in

there there's no looking out for your best

interest of like maximizing the amount

that you specifically can put in the plan

it is it is putting you into their

template and spitting out an answer and i

will tell you in all of these there's

there's multiple you know low cost low fee

i don't know about you but i have

yet to walk across anyone that works for

free um it just doesn't happen there are

fees you just don't know how you're paying

them and the really tricky thing about

investments especially you know being in

the investment world

I love it when potential clients say, oh,

I don't pay an advisor fee.

I'm like, well, gosh,

that is so nice of them to work

for me.

Isn't that amazing?

And you pull it up and they're like

in all of these loaded mutual funds they

had no idea they were in, right?

Same thing here.

There's revenue sharing in the mutual

fund.

So they might be picking more expensive

investments and sending a kickback to

themselves from whatever the investments

they're choosing for you.

And what I would tell you is run

from that because if you think about a

four or one K plan,

It's your largest savings vehicle, okay?

So this is going to be a big

account very quickly, right?

And once the money's in,

it compounds and your employees are

putting money in.

Do you want to pay fees as a

percentage of the assets or do you want

to pay fees based on what the work

is being done?

So we always encourage...

Third party administrators should be a

flat fee.

I am paying you for the service you're

doing, not based on my account balance,

right?

Anything tied to your account balance is

going to grow with you.

And yet you're offering the exact same

service.

So never, never choose the percentage.

Never.

Yeah.

Choose the flat rate.

I love that.

Um,

You're like a wealth, no pun intended,

wealth of knowledge.

So I want to pivot real quick.

Let's try to get some more great questions

in here.

I know the answer to this because I,

again,

had great parents and I understand this,

but I don't think a lot of people

do understand this.

So for high earners, what's better,

traditional pre-tax contributions or Roth?

And I'd love for you to give the

answer as to why that is.

Yeah.

OK, so high income earners,

the answer is almost always going to be

traditional because your tax bracket today

is higher than it will be in retirement.

I mean,

even some of our wealthiest clients are in

roughly the twenty two percent effective

tax rate because we have strategies to

pull down money from buckets in the most

strategic way possible.

Right.

So if you're in the thirty seven percent

plus estate tax now and you could be

at twenty in retirement, absolutely.

You want to take the tax deduction now.

But I'm a devil's advocate myself here for

a minute, okay?

I think in the perfect world,

when you get to retirement,

you have money in every bucket.

You have taxable, you have tax deferred,

and you have some Roth.

So, for a one case,

absolutely tax deferred.

But you can also fund an IRA every

year.

And if you don't have any other IRAs,

you can backdoor to a Roth.

every single year and get a little bit

of Roth money in for free.

So you absolutely want to do that.

So is, so is,

or is there not a cap in income

in letting, uh,

the government allowing you to contribute

to Roth?

There is, there is a cap.

Okay.

So, but this is,

this is the loophole to the cap again,

right?

Okay.

Let me knock it out of the park.

You can fund a traditional IRA.

And again,

if you make too much money to fund

a Roth,

you probably make too much money to even

get a tax deduction for your IRA

contribution.

So you put the money in anyways,

because you want to fund the bucket.

You want the tax deferred growth.

The basis will carry with you on your

tax return.

But if you don't have any other IRAs,

you can flip that money to a Roth

account tax-free.

And now you just got eight thousand bucks

into a Roth account.

But it's a once a year.

The door opens and closes.

And once it closes,

you can't go back and fund anymore.

But you can still fund for twenty twenty

five up until April fifteen twenty twenty

six.

So if you haven't funded your IRAs,

go fund them right now.

Okay.

So, so it's, it's the flip.

It's not the ongoing contributions,

but it's the flipping of the account that,

that makes that work.

Your four Oh one K you're going to

want to be tax deferred,

but I want to challenge you.

Okay.

If you're doing a four Oh one K

plan and you're getting those tax savings.

Let's save those dollars.

You were going to pay those dollars in

taxes.

Let's make sure we're saving them.

If we instead take our tax savings and

we increase our lifestyle by the amount of

taxes we just saved,

we're in the same position as if we

had done Roth long-term.

We didn't get any benefit out of those

dollars.

You want to take your tax savings and

save them versus add them to your

lifestyle.

That's an interesting way of – that's a

great perspective.

I think everybody chases the savings and

they don't think about the delta of what

they saved.

That's a really interesting way of putting

that.

Good one.

Okay.

Paula, you're up.

Rapid fire.

Well,

I think we should pivot a little bit

to –

We do quite a bit of buyer rep.

We represent young buyers looking to buy a

practice.

So I'm sure there are heads going here

when they see that a dentist,

the seller already has like a four or

one K with a large employer contribution.

They probably worry what's that going to

look like when they go to sell.

um you know does that look like an

unnecessary expense to a buyer like how

how do you how do you navigate that

in in that when they get there i

mean they're looking at that purchasing a

practice and then someday they're going to

be in that same boat and are they

purchasing a hundred percent sale like a

walk away sale or are they joining forces

with somebody else typically typically

it's a walk away it's

So,

so I actually spoke with NDP transitions

partner, Christy Ratcliffe on this one,

just to make sure all they do is

dental transitions and help with that.

And in a walkaway sale,

the plan is typically closed.

Nobody's going to want to pick up the

liability of an old pension plan.

So they will close the plan.

There will be no cost in there.

And then you can set up your own

plan.

I think the only, you know,

if you're thinking about this from a buyer

perspective is if they had a plan before

and you take it away and you don't

offer it, that could present a problem.

So you could certainly look at what those

costs may be.

But again,

go back to what is the plan actually

costing you on a staff standpoint?

It's not that much.

Most of the bang for your buck is

what you're putting in for yourself.

And that's an owner benefit.

That wouldn't be an ongoing expense.

So I think maybe just that three percent

safe harbor is what I would include kind

of going forward as the ongoing expense.

But understand that that will be under a

separate plan,

not a continuance of the current plan.

Thanks for clearing that up.

I think that's really smart.

You're not taking over the seller's plan.

You're starting your own.

Real quick question because we advise this

and maybe we don't know the answer

perfectly, but you're spot on.

You can't take benefits away unless you're

willing to have people have like pickets

outside the office or something like that.

It's really important to keep those team

members in place, transitionally anyways.

How long does it take to put a

plan together?

I always say, look,

have the meeting with the team,

tell them that nothing's changing.

It might take a minute to get a

new plan established,

but you're absolutely getting a new plan

and details to follow.

How long does it take?

And do you typically like ask the seller

for their plan details and then you guys

try to match it?

Or like what's that dance look like?

Does that make sense what I'm saying?

It does.

And I would say no because I don't

know that it matters what the previous

doctor was doing.

They were a different age.

They might have had a different, you know,

amount they could save, et cetera.

We want to build this new plan around

you when we want to reward the employees

on a plan that works for the new

buyer, not for the seller, right?

And those benefits, again,

for them are going to be very similar.

If they were giving extra on top of

the salary deferral match or on top of

the safe harbor,

what those numbers look like or how

they're rewarding specific departments,

maybe you would want to know that piece.

But I think generally speaking,

you're going to build the plan that works

for you.

And it's a very quick setup,

to be honest.

It's a lot quicker than you might think.

It's a legal work.

I would say start to finish,

you could be done in a month.

And what's even crazier is, again, I mean,

we still operate in these silos of years.

Like, right,

we make our New Year's resolutions on

January first, twenty twenty six of like,

here's what I want to do for twenty

twenty six.

But in the tax world and in the

pension world,

we are still very much living in twenty

twenty five.

You can actually still go open a plan

for last year and fund it for twenty

twenty five.

So there is opportunity to even go back

and fix some things from the prior year

if you haven't opened it yet.

One of my most favorite things about that

accountants and retirement stuff.

It's like, I'm not done with that.

I know.

I feel like when I ask a question,

it's always like, no,

you missed the twenty twenty five mark.

It's like I think I think I was

like I was like doing the catch up

and they're like, oh,

you had to do it by December.

Yeah.

I think I ask I'm too late.

Yeah.

The only piece,

the only piece that has to be in

the plan in the plan in the tax

year is the salary deferral.

And why is that?

Because it comes out of your paycheck.

And that December thirty first paycheck is

the last paycheck for that tax year.

So salary deferrals, you can't go back.

But employer contributions.

Absolutely.

And anything extra you want to do also,

Paula.

That's the employer.

I thought the ketchup was extra.

I was going to check and get it

done, but apparently that's not a thing.

That's great.

What else, Caitlin?

We're, we're thirty five minutes in,

I think.

I guess I would want to know,

you know,

Cane Waters and Associates is huge.

You do a lot of different things there.

I mean,

what would you want the dentist out there

to know?

We've talked a lot about

buying and selling a little bit,

obviously offering this to your employees

and the ease and maybe the cost because

we're in it for the dentist and it's

a cherry on top to provide it.

What are some tidbits or things you can

advise them on that...

Like, you know,

every is a different state to stay.

Is it different where you are in your

career?

What you can offer?

I don't know.

I mean,

I don't know what I don't know.

I guess I'm just wondering,

are there some last minute things you'd

want the listeners to hear about?

So it's not different state to state.

This is all federally regulated, right?

I think the biggest takeaway is the whole

purpose of this plan is for you,

the owner, to save money.

So if it doesn't work for you,

we're certainly not going to recommend it.

I mean, again,

you can do it for the benefit of

your staff,

but these plans should pay for themselves.

You are either going to pay the money

in taxes or you can take that same

money and you can pay it to your

staff.

Who would you rather reward?

Run the numbers and let's see where they

fall out.

And if it's not a great fit because

you have thirty staff and only one doctor,

then OK, that's not going to work.

We don't do it.

Right.

But once you have the proposal,

you'll know the amount that you can save.

You'll know the tax is saved and you're

going to see that nine times out of

ten,

these plans pay for themselves with the

taxes saved.

And you get to reward your employees.

It's truly like the easiest sell.

It's a slam dunk.

Like,

I don't know why you wouldn't get a

proposal.

It doesn't even cost money to get a

proposal.

How about that?

It's free.

It's free knowledge.

No, no, no.

It costs something.

But for our program, it's free.

If you sign up through Dental Unscripted,

then you get a discount of nothing.

It's free.

There we go.

what about okay so let's say i do

it it doesn't really pan out for me

financially for whatever reason i have

thirty employees and one of me what would

be the next option so i i don't

set up a plan for the actual practice

and the team is is there another what

what would i invest in then to save

money for myself what opportunities do you

guys offer other than just for a one

k but just financial advising

Sure.

I mean, so in that case,

you would always want to fund your IRA.

You want to do that anyways,

whether you get the tax deduction or not.

And then you would want to open a

taxable investment account to make sure

you're starting to save those dollars.

Listen, two things happen to every dollar.

You save it or you spend it.

Those are your only options.

And if you're spending it,

all you're doing is increasing your

lifestyle and that becomes your new level

of normal.

You're

my favorite retirement comment is when

people are like well i'm going to downsize

in retirement so you can plan on you

know a couple million coming out of my

house i have not had one client downsize

in terms of dollars or maybe you have

less square footage but now you want the

penthouse in new york it is it is

the same cost okay um you're not also

going to downgrade your lifestyle so it's

setting the healthy habits now to get the

money tucked away the beautiful thing

about a retirement plan is that you can't

access the money until you're fifty nine

and a half

For savings.

It's kind of like that.

Michael hated this saying,

and I say it all the time,

and I don't know where I got it.

A luxury one's taste becomes a necessity.

That is beautiful.

Well said.

Yes.

It's a mouthful, but it comes up.

It doesn't matter.

Maybe ping that one to me after this.

Oh, it's her favorite,

and I got to hear it all the

time.

First he thought it was really rude,

and then he's like, it's true.

Guys,

I'll just let this go and kind of

tie this up in a bow.

I will go back to the comment that

if you are in ownership,

and that's what we –

at Next Level and Dental Inscripted is all

about is helping doctors make great

decisions, get into ownership,

create real wealth for yourself.

Just the ownership of the practice and

just the ownership of the real estate,

that does pretty good for you.

It's better than just being an associate,

one hundred percent.

But if you could layer on paying yourself

over the next twenty years,

that pays even bigger.

And the sale of the practice and the

sale of your assets is a cherry on

top, if you could imagine it.

That is a cherry, not the thing.

And it's sad.

It's sad when I'm negotiating as a buyer

rep against a practice broker.

And I have one right now in Wyoming.

And the seller has a number that she

has to hit.

And her practice is not worth that.

And she is sitting on market and will

continue to sit on market because she has

to have her number because that's her

retirement plan.

because she didn't do what we talked about

today.

And here the buyers is like,

I'm not buying that.

I'm not buying that.

And I bought buying that.

So instead of thinking about that huge,

hopefully huge payout in the end of your

being your retirement,

How about take control of that?

So Caitlin gave us some great tips today.

She works with a great firm that knows

what they're doing and is dental specific,

not gusto or whatever is out there.

You guys should do it.

It's free with your listening subscription

of Dental Unscripted.

And we would love for you guys to

take advantage of that.

So Caitlin,

thanks so much for your time today.

It was awesome.

Thank you, guys.

Appreciate it.

Have a great day, guys.

Take care.

Bye.

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