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4 Reasons to Plan for Retirement at the Start of Your Career

Date: August 2022

Author: Louise Sinclair

With your whole career ahead of you, planning for retirement is probably the last thing on your mind! However, as many a retired dentist will tell you, it’s never too early to start planning for your future financial security. The American Dental Association (ADA) says that 96% of dentists find themselves unable to retire while maintaining their current standard of living, pressuring many to stay in work longer and miss out on precious, hard-earned retirement years. If you want to be in the 4% enjoying their golden years in comfort, then read on to find out why you should get a head start on retirement planning. 

1. The magic of compound interest. 

According to the American Student Dental Association (ASDA), the average graduate leaves dental school with more than $200,000 in debt. When your salary is at its lowest and your debt at its highest, it may seem counterintuitive to prioritize retirement. You’ll have plenty of time to save when you’ve paid down some debt and established your career, right?


While it’s not exactly a reckless strategy, this approach can actually end up costing you significant money in the long term thanks to compound interest. If you’re not familiar with the term, compound interest refers to earning annual interest on the balance of your savings or investments AND any interest that you’ve previously accrued. It creates a snowball effect, and the longer you save, the larger that snowball becomes. 

Here’s a quick illustration of the difference a few years of compound interest can make to your retirement plan, courtesy of The Calculator Site (try it for yourself!). 

Saving $1,000 per month (adjusted for inflation) at 7% interest for:

  • 45 years = $5,724,113 including $4,610,467 interest. 

  • 40 years = $3,862,595 including $2,956,775 interest. 

  • 35 years = $2,573,546 including $1,846,996 interest.

In this conservative example, waiting just five years after graduation to start saving can potentially cost you almost two million dollars at retirement. Waiting ten years can cost you more than three million. By prioritizing relatively low-interest debt now, even for just a few years, you could be leaving millions on the table later on. 

2. The cost of waiting. 

Waiting can cost you money in other ways, too. In addition to simply having less time to save, waiting means that the value of your money is subject to the pressures of inflation. Essentially, it means that $10,000 today will be worth much less than $10,000 when you retire. And with the current record-breaking inflation rises, that knowledge is particularly pressing for today’s graduates. Experts say that in order to stay ahead of the curve, you should invest your retirement savings into vehicles that provide returns above the inflation rate at the time of investment.

3. The gift of employee benefits.  

Many employers offer pension contribution packages to help bolster your retirement savings. You may be able to benefit from structures like tax breaks on contributions, or matched contributions, where your employer matches your pension contributions up to a certain percentage of your salary. These contributions can also accrue compound interest, essentially representing a gift of money that multiplies by the year! Again, the earlier you start to contribute, the longer you have to reap the benefits.

4. The unpredictability of life.  

We graduate from dental school assuming that, after all of our hard work and financial investment, we’re in it for the long haul. However, life can take unpredictable paths. While not pleasant to imagine, the reality is that an illness, injury or change of life circumstances can bring your retirement forward. Given the high demands of the job, the threshold for a career-ending event is much lower for dentists. Early planning means that, should this happen to you, your retirement fund is substantial enough to see you through. 


As many dentists will tell you, it’s never too early to start planning for retirement. You’ve worked hard throughout dental school, and you’ll continue to do so throughout your dental career. Proactive planning now will ensure that, when the time comes, you’ll be free to enjoy the comfortable, stress-free retirement you’ve so rightfully earned.

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