Turbocharge Your Practice 401K

Transcript performed by A.I. Please excuse the typos.
00:00
This is Dental All-Stars, where we bring you the best in dentistry on marketing, management and training.

00:13
What is the maximum uh owner anyone can put into the 401k? In a traditional defined contribution 401k plan between employee contributions, a match, and a profit share, you can put away up to $77,000. Welcome to Dino All-Stars. I’m Alex Nottingham, founder and CEO of Ulster General Academy. And with me is Baron and Julian Natelli, financial advisors at Oppenheimer.

00:42
Please welcome Baron and Julian. Alex, thanks for having us. Thank you, Alex. Well, happy to be here. Yeah, so happy to have my New York slash New Jersey guys over here. Great, great financial advice. We were just talking for 20 minutes in the green room. Like, we have to go do a podcast here. Let’s stop talking shop here. Thank never get you to stop talking about the S &P 500. I know, I’m just all about that. And no, but thank you for.

01:11
for being such loyal uh partners here with All-Star. We love having you and supporting our clients. And we’d like to have you on our show to periodically talk about what’s happening in the markets and ways of saving and making money, which is so critical. And today we want to kind of hone in on the 401k, which I love the 401k. I love ways of saving money on taxes and then figuring out what to do with the money.

01:41
Oh, so gentlemen, tell me about, let’s get right into the 401k here. So tell me about just big picture for those who don’t even know what it, what is it and kind of how we should be utilizing it better. So the 401k, like you said, very basic is a retirement savings account. Don’t get that confused with an IRA. IRAs.

02:11
are similar yet different, different contribution amounts, different types of retirement accounts that people use longer down the road. 401ks are strictly through businesses, whether you’re currently employed or not employed at the business. So that’s a very simple version of a 401k. When it comes to.

02:41
Saving your money and contributing your money, you know, and obviously working with. All-star Academy, many dental Academy, dental Academy. have over 200 participants in our 401k accounts. And the biggest thing that we hear from participants. That’s a two-sided sword. I’m only contributing.

03:11
how much my employer matches, right? And that’s a scary topic because I can see why people say that, but also I can make a very heavy argument why they should be contributing more than what’s being saved, right? The majority of dental owners contribute 3%, right? They do like a 3 % match, right? So you really…

03:38
see a lot of participants contributing only 3%. What Julien and I tell people is 3 % is great, but you should save money for yourself for the future. Like you said, for retirement through the 401k. The 401k and Alex, I don’t know if you know this or not, the max contribution that you can make for the year, if you’re under 50 of your own dollars.

04:06
is $23,500 a year, right? That’s huge. When you are over 50, it’s even further. I think it’s another $7,500. They usually play with that number every year in terms of trying to keep up with inflation and put away extra money. So you can even get up to almost $30,000 to $31,000 of your own money into a 401k account in a business year, in a calendar year.

04:34
I think the two issues here with the 401k, first of all, it’s a vehicle to save money tax and there’s tax benefits, whether it’s Roth or we can talk about that, but it’s a way of saving and you have tax benefits. And then the issue here is one for dentists listening and employers is why would I want to have a 401k for my team and for myself?

05:04
And, know, typically the dentist is a very high income earner that they want ways to, maximize the 401k. So for myself, higher income earner is I maximize my 401k completely and my Roth backdoor Roth. But why not? That’s like, I know if you use the word alpha, but that’s like free, uh, benefit that you get by tax savings. So you want to take, take advantage of that, uh, before

05:32
You go into the taxable potentially. So that’s on one end of why the dentist will want to be doing that for themselves. Why the second part of that is why you would provide that for your employees, because part of it is then you can participate in that. And then thirdly is how do we encourage the, the workers, the employees to put more in where you’re, and I’ve heard this before, which is, which is, uh, I’m glad you brought it up because it’s, it’s.

06:01
it’s unfortunate is that so many workers will not put their own money beyond the 3 % in. Right. And that’s problematic. So maybe we, yeah, you can address some of those issues of like, um, let’s go to the, the, the, the reason of why to do the 401k later if we have time, but starting with, uh, this one’s really interesting. The employee, why aren’t they doing that? How can a dentist who has a 401k encourage them to do more of it?

06:30
Well, I think the number one reason why people don’t put more money is into the 401k is they don’t know what to do. And what Julian and I have really brought into the picture has been educating the participants of how powerful the market is. And when you see results, you may get more comfortable with putting money into your 401k, right? Everyone wants to see.

06:59
results, whether it’s in your business with more patients coming to the office, our business, people want to see their portfolios go up, up and up. You know, so I think that’s the first reason. The second reason I think there’s such a stigma behind, oh, they’re putting in 3%, I’m only putting in 3%. We stress, this is your retirement. You’re only working at a dental office, 5, 10, 15, 20 years, right? Where…

07:29
After that time period is done, you’re your own person. You have your own expenses. You you don’t have that 3 % match to live off of anymore when if you were putting 5 % of your own dollars or 6 % or 10%, you know, that’s how much more money you’ll have to live on retirement or roll to another office or anything like that. Does that make sense? Yeah. And so when you work with a dental office and

07:58
in their 401k. Do you help educate their, the team members and the dentist on, on these issues about what they can invest in and so on? Yeah. You’re a resource for them. Yeah, we’re a resource, whether we are in person, um, at the practices or we do Zooms or we- Wonderful. offer, you know, private time if people can’t make a meeting or want to have another meeting. Um, you know, that’s definitely-

08:27
what we strive to do and what we actually find a major negative about the 401k is that there’s not much attention from advisors, uh wealth management people, and they kind of just let this just go right under the table. And again, it’s not a very complex investment vehicle, let’s call it, but it’s something that’s the backbone of America. You know, this is people’s retirement money and that’s…

08:57
The scary part of, you can’t just rely on social security where this is the backbone of America and Julian and I and our group have really founded, you know, a niche, especially with your organization about, you know, helping people understand to save for the retirement, invest money, make money, and, you know, go ups and downs. You know, we’re not going to have just, you know, green blue skies, you know, we’re going to have.

09:26
cloudy days, rainy days, whatever it may be, but over time, you know, the blue skies tend to prevail, you know. I like, again, what you said about education. And it sounds to me and is that having a good 401k advisor like yourself is you’re available to the dentist and to the office, at least virtually or on a phone call so that they know what they can do. That makes a lot of sense. Like, what am I investing in? And so the more that that one’s educated, the team

09:54
as well as the dentist, they can make better decisions and feel more confident and have conviction in investing, right? Because we have to overcome inflation, we have to cope. And for those who are listening, we’re talking about your future self and the sacrifices you make today, the investment you make today, your future self appreciates that investment. Julian, you wanted to say something? Yeah, one other thing is a lot of, especially dental offices that we speak to,

10:24
You buy out someone’s old practice and now it’s your practice. Many new owners are not looking at their 401k as what should I be doing? What should I be changing? Am I actually happy with the 401k that I’m inheriting? Whether it’s a lack of service to the participants, not knowing how much money you can actually save in your 401k.

10:50
or knowing the difference between a match versus a non-elective contribution or doing a profit share on top of that. I think the one biggest problem in dentistry, and I could totally be wrong because I’m not a dental owner, is keeping your staff. And that’s not just paying them more every year. It’s keeping them happy in ways that others may not be able to. If I’m giving someone a 3 % match,

11:19
or maybe an additional contribution on top of that, rather than asking for a 1 % raise or saying, I’m leaving, you can say, hey, we actually give you an extra three, four, 5 % that goes into your 401k. So it really shows you care. And it’s also when you have a solid 401k and participants know that they can reach out to the advisor with questions.

11:44
That just gives one more boost that, we’re not just a dental office, we’re a family office that takes care of our own. Julian, here’s a question, Alex, I bet you everyone that’s listening to this, they do not know this answer. What is the maximum owner anyone can put into the 401k? In a traditional defined contribution 401k plan between employee contributions, a match and a

12:13
profit share, you can put away up to $77,000 a year and many dental practices. Actually, I that answer. Here we go. Of course Alex would know it, but many dental practices, they have a husband and wife as the owner, the dentist, the business manager. So if you have both spouses or if you have children or family members also working for you, that is

12:43
hundred if not hundreds of thousands of dollars that you could be saving and tax deferring on an annual basis. really appreciate you providing that answer because that was one of the first questions I have there because if feel the we have a hiring service for dental offices as you know and it’s been very competitive out there and it’s hard to find people and key people when you’re in an office and you’re taking care of people’s retirement they feel that

13:12
that they can get, so when you have an employee come in, you want them to be productive, but you want them happy. You want them to stay, you want them to feel like they’re part of the family, like you talked about, Julian. And taking care of their finances is a very important, intimate, incredible opportunity to do for your employees. And they appreciate that, that law reciprocity. And…

13:37
It’s also, they’re going to want to probably stay more likely because their funds are, it’s also a pain to leave because they have to move the funds, but everything’s there and you get to talk to Baron and Julian and you guys actually become a retention tool for the practice because they have, they can talk to their advisor, which is your, everybody’s advisor. And, and there are ways of, so I think that is right there speaks to why it’s important to, to do this for the practice, to be competitive, to hold onto people.

14:07
As well as the dentist will benefit because they can move towards maxing out and that they can also provide this for their employees. Now tell me, all right, I got that. The fact education is critical, having great advisors like yourselves to be able to, manage it, to be available. And you guys are great about this. I love your, um, your responsiveness. Whenever I have a question, you guys have an answer. You’re there. Uh, it’s so reassuring. It’s so helpful. And.

14:36
And it’s been great. We’ve been working for you guys for several years and I get the same reviews from every client. They they’ve saved me a lot of money and they’re also loved the customer service. tell me with a 401k, some of these 401ks and I’ve had my own before you would go in and it was a terrible interface and you could only pick like their funds and there wasn’t a lot of options. When with you guys,

15:04
and or even a brokerage like you. I’m not just pitching you in general. What it should be is, although I would want them to go trust a partner of all star dental. Yes, you are. Yes, you are. I want to be somewhat uh uh, what’s the word? All star dental academy. I want to, I want to be somewhat deferential here. The in, okay. So somebody is investing the 401k. What should it be like? Or again, what it should be like is what Oppenheimer does, but

15:34
they have a broader selection, the poll from they’ll probably, what will they do? Will they consult you and say, Hey, I want to be aggressive and you guys will put them in something and another employee wants to be something else. so it’s, is it, is it cookie cutter? Everybody gets the same portfolio or depends on what they want. Yeah. Let me, let me take the first part of this Jules, and then I will uh turn it over to you. Um, so Oppenheimer is great. We do not have.

16:03
a sole partnership with one 401k record keeper, right? So we’re not working for Vanguard only and we just offer Vanguard product. We’re able to go to other 401k record keepers and figure out which record keeper is best for the business, right? um Whether that’s price, flexibility, interface.

16:33
something like that. So we are able to go to different record keepers and figure out what’s best for the business. Obviously we have our select few that we personally like, but Oppenheimer is a great company where they don’t push us to, you have to go to this route or you have to go this route or you have to offer this type of plan. So Julian, why don’t you talk about the fun selection that we do and.

17:02
You know, kind of how we go from there. our typical fund lineup is 20 to 25 funds. We have our basic bond funds, large cap, small cap, mid cap, international, a few either thematic or sector related funds as well. And then also target dates. Target date funds are extremely popular in 401ks because

17:32
You take the age-based approach and you let the fund company do its job. Occasionally there will be a business owner or a participant that will request a specific fund, whether it’s a gold miners fund, a specific technology fund that they already have in their own personal accounts, things along that nature.

17:57
Um, one record keeper that we do use is Vanguard and they have 13,000 funds that we’re able to choose from. And from there we narrow 13,000 down to 20, 25, occasionally 30. that’s based off of, and that’s based off of performance fees. You know, you have to run those different metrics in terms of, you know, where’s my return, am I paying type of thing. we covered this in a few other sessions again, but.

18:26
One of your biggest goals with 401k is saving money. It’s like you’ve seen, and we’re not gonna get it, we talked about this in detail on other podcasts, but uh you’ve seen 401k is that the fees, there’s levels of fees were like ridiculous. Like just work transitioning to the products that you provide, they’re saving a ton of money just on fees. And then the next level is.

18:52
I think we’re approaching a million dollars in savings over a five year time period. You know, with all of the all star dental academy, there you go. Is that we’re working with, think we’re pretty close to about a million dollars in savings over a five year time period. That’s wonderful. And that is that that’s more money you can put towards your business, more classes and sessions with, you know, you and your organization, um, or just more money that’s going to be working for you.

19:21
In terms of compounding investing, you know, instead of paying 50,000 for fees or something like that, where your money’s going out of the 401k or you’re paying it from the business, you know, you could be doing a lot more with that money. And, you know, Julian and I just take a different approach and it seems to be working. I will say that you’re probably for most people, but not everybody.

19:47
One thing about you guys is you’re so responsive and you care so much and you communicate. Uh, some people don’t want that very few, but most of our people love that. love that. And it’s just, I like getting what I pay for. And with you guys, you get more, uh, and, so it’s saving money. It’s responsiveness, it’s education. And again, when I, for those that are listening, when I say Oppenheimer, of course I’m biased. I can disclose that, but.

20:17
I believe the way you guys do it is how every advisor should do it. And we’ve had conversations, we’ve had people that have, because a lot of our dentists work with you personally, and some of them decided to negotiate with somebody else at a different rate. That’s fine. And you were happy that they got good service and they save. You guys are maniacal about uh saving. Like, number one is fees. Like, don’t pay more than you have to. And number two is like, pick things that are like,

20:45
make sense and that are safe. You guys are, I think, a balance of risk reward that you want to be like triple leverage funds. You don’t even know what you’re buying or why you’re doing it. So it’s keeping people safe and educated in what they’re doing. So just to kind of put a button, you were talking about diversification. Again, target dates are very fun. they switch based on age between bond exposure, which is safe potentially, and then market exposure.

21:13
Uh, you also have a whole bunch of others as well. now when somebody’s picking the 401k, uh, selection, um, do you talk with them to advise the team about kind of different areas they should look at and what to select? Yeah, we try to, and our specialty with the 401ks is small professions such as dental offices. Um, a large majority of our 401ks are medical practices.

21:43
So small office, an owner that cares about their team and cares about their practice. So going through with the group, where we think the market’s going, where it’s been, our ideas about the 401k. If someone’s 20, 25 years old, you shouldn’t be thinking too much about risk because you have 40 years until retirement.

22:08
And then we like to really break it down with each individual participant, see where they’re at. Do you have an old 401k? Something we always tell people is even if it sounds like a headache, oh, to move this old 401k to my new one, but you’re much more likely to be checking on your new 401k performance rather than your old 401k performance. If you have an old 401k of two or three jobs ago,

22:37
What’s the likelihood you’re actually still checking that? You should be consolidating that into the one you’re actually contributing to and paying attention to because that just helps with your compound and growth even more. Alex, to answer your question as well, we try our best to help the participants select the funds. You know, that’s what we’re being paid to do. um Again.

23:05
I say we try our best because if someone misses the meeting and then they’re busy and then we can’t line something up, and obviously that can always be changed. If the market has a great year, 20%, and someone says, hey, you know what, I really like how my account’s done this year, what do you think? We can always change the investments. Your investments within a 401k are not locked in, and that’s something that we… ah

23:35
focus on too is being there. People, the phone works both sides though, right? Our side to them, them to us, right? It’s the same thing in everyone’s business. You know, we can only do as so much as what a participant wants, but we’re willing to, you know, help with individual selections of funds. Market timing gets a little bit harder, especially within a 401k, but it’s doable. And it really depends on

24:05
Individuals balances, you know, if you have a smaller balance, we may lean to do one or two funds specifically. If you have a higher balance, we may break that down to three or four. But once we get past four funds, we don’t really like that style. And we see it all the time when we do reviews of 401ks. Well, this guy’s got 10 funds in here. Three of them do the same thing. Three of them do the same thing. And that we just laugh at that. um

24:32
But that comes with education and understanding what you’re doing, but maximum, we’re always just trying to do for funds. Even if you have two, three, $4 million, you know, mutual funds, ETFs, as you know, they’re already diversified in itself. Why diversify yourself even further and create that complication when you don’t need to do that? You know what I mean? Well, two things occur to me. Number one, you’re right about the diversification.

25:01
I pick up my dad sometimes. I know you saw some of his accounts and I did analysis. AI helped me. took, he’s with Fidelity. They do some of his management. I took the 50 funds they put them in, slapped them into AI. It’s a 60-40. You could have actually, you can buy one ETF and it would do all of it or a target date fund or buy two funds and you’re done. So I appreciate about you. That’s very rare of advisors to look for simplicity.

25:31
And just like that, you your job is to make it complex. It’s to make it simple and help people make better decisions. Um, I think it’s, it’s really cool. Like I have you show me some of the portfolios you’re constructing. Like, wow, that’s simple. Like, yeah. And it works. The other area I want to emphasize for the listeners I found pretty powerful is investing in markets is very rare for the average folk.

26:00
If you will. And I think that’s part of the education because part of it, they don’t understand. They may not have the level of wealth, but it is, is a privilege to be able to invest in markets and make, uh, these great gains versus just a money market or just living the page at the paycheck. And again, dentists, you should know this right. And be investing and have good advisors to support you. But I think it’s an amazing gift.

26:29
to your team, as Julian was talking about, to provide them resources, like not just here’s a 401k, and they’re not gonna utilize it, which is sad because most people don’t do it and probably they’re not, probably because they’re not educated, they don’t see the value. But once you educate, there’s a dentist friend of mine that, an Adonist that,

26:57
He’s all about 401k and educating his team. And he’s seen people. He said, I had an office manager that retired five years earlier because I spent time with her encouraging her to invest. It changed her life. You can change people’s lives, your employees’ lives. And when they see that you have, I mean, it’s amazing you guys do 401k. Sometimes I think it’s beneath you because of the level that you guys operate at. Like you’re so smart, but

27:27
You love it. You love taking care of people and to have like top, uh, stock brokers or whatever, financial advisors, like to have that at your fingertips for yourself and your team. It’s a great gift. And so we want to, we want to always, uh, like I said, they’ll appreciate that, but remember it is very rare for people to, have these opportunities. And if you can do that for your employees, uh, it’s phenomenal. So I, I think I’m going to stop there guys.

27:57
I like that. I like that a lot because we’re going to have you guys back. really appreciate you guys explaining to us about the 401k, a little more detail. talked in a prior episode about fees, right? And just to summarize that part of the process of, especially with you guys, is lowering fees. The second is making better decisions. That goes along with education. And what I took a lot away from this conversation, guys, and often

28:25
I didn’t know this until, and just so you’re listening, everybody listening, this was a conversation. Normally when I talk to you guys, we’re talking about stocks and things and so on, but when we get into this, like, I’m like, you do that? Like, yeah. And I was like, which is great because uh that’s a wonderful service. And I would, as a dentist, I would appreciate that. it makes a difference. Again, it’s so hard out there hiring people and keeping people. The more professional,

28:54
You can take care of your patients and your employees. The more successful you’ll be all around and you’ll feel good about it. And Alex, one last note. Yes. To the business owners that are listening to this, and hopefully it’s all of your clients and many, more. Secure Act 2.0, which has changed a lot of different things inside of the 401k since it came out in 2022.

29:21
There are more changes that start in 2026, specifically if you are over the age of 50 and you do the additional contribution being above 50 every year. So if you are above 50 and you don’t know what changes are coming in 26, definitely reach out to your 401k advisor or you can reach out to us because there are many changes that are still to come inside of a 401k going forward.

29:50
Now I do want to put a call to action here for those that are interested in learning more about 401k investing or just standard investing. mean, a big part of your expertise is individual investors as well. If they want to learn more or even just become educated, because I know you talked to lot of people and you guys are not salesy, you don’t push, you just want them educated. How can they get ahold of you?

30:20
Email website, phone number, you know, lot of people at your business have our information. Some of our listeners, our podcast reaches thousands and thousands of people. Some of them are not our members. What, where can they reach out to, to you? Give it, give us, I’ll put it in the show notes, but what’s the best way to reach out? So you can reach out oh via email Julian.Natelle at OPCO.com.

30:47
And his baron.natali at opco.com. We will also put our phone numbers in the mix as well. Mine is nine seven three two four five four six one eight. Burns is nine seven three two four five four six four two. You can also message that number as well. If you’re more interested in messaging. Great. And let, let us know if you’re talking with these guys, let us know you found on.

31:16
us on the podcast because I love to hear that the message is great. We listen to your other ones and definitely appreciate you having us on as well. Well, thank you, Barrow and Julian. I appreciate it. And your dad as well. We had, we had dinner a few months ago. It was a lot of fun. So, yeah. Well, thanks for joining us and remember to follow us on Apple podcast, Spotify and YouTube. Get the episodes as they release share with your friends, speaking of share with your friends and tell your brothers, go to the Oppenheimer office.

31:43
and find everybody’s phone and click subscribe and follow on all of our YouTube, our Spotify, our Apple podcast, uh all Instagram, just follow everything, because then it helps our ranking and we appreciate that. So, thank you and until next time everybody, go out there and be an All Star.

32:07
We hope you enjoyed this episode of Dental All-Stars. Visit us online at AllStarDentalAcademy.com