A retirement plan that worked when you opened your dental practice may not be the right plan five or ten years later.

The practice grows. Your income changes. You add hygienists, front office staff and part-time employees. Tax laws change. Contribution limits increase.

But the 401(k) often stays exactly the same.

That can be expensive.

We administer retirement plans for small businesses across Oregon, southwest Washington and beyond, and dental practices tend to have a recognizable profile: a high-earning owner, a relatively small W-2 staff, employees with varying deferral rates and often a few part-time schedules in the mix.

That combination creates both planning opportunities and compliance risks.

For an Oregon dental practice 401(k), these are seven of the issues worth reviewing.

Common issue	What it can mean for the owner
Relying on OregonSaves	Very limited personal retirement savings opportunity
Missing OregonSaves recertification	Potential state penalties
Using a traditional 401(k)	Owner contributions may be limited by staff deferrals
Missing part-time eligibility	Plan correction may be required
Stopping at the deferral limit	Tens of thousands in potential additional contributions may go unused
Missing tax credits	The practice may pay costs the federal tax credit could offset
Missing Roth catch-up rules	Older owners may lose access to catch-up contributions

1. Treating OregonSaves like a retirement plan for the owner

OregonSaves can satisfy Oregon’s state retirement program requirement.

But it is not a substitute for a well-designed employer retirement plan if your goal is to build meaningful retirement savings as the practice owner.

OregonSaves uses Roth IRAs. For 2026, contributions are limited to $7,500, or $8,600 if you’re age 50 or older.

Employers also cannot contribute to employee OregonSaves accounts.

That means no:

Employer match
Profit sharing
Employer retirement plan deduction
Ability to make substantially larger qualified plan contributions

Income limits can create another problem. A married owner filing jointly with household income above the applicable Roth IRA phaseout range may not be eligible to contribute directly at all.

For an owner earning $300,000 or more, the difference between OregonSaves and a properly designed qualified retirement plan can be substantial.

OregonSaves may satisfy the state requirement. It does not necessarily solve the owner’s retirement planning problem.

2. Forgetting to recertify your OregonSaves exemption

If your practice sponsors a qualifying retirement plan, you can generally claim an exemption from OregonSaves.

But that exemption needs to be periodically recertified.

Oregon employers are required to recertify their exemption every three years. Practices that established a 401(k) several years ago can therefore find themselves due for recertification without realizing it.

Failure to comply can ultimately result in civil penalties of $100 per affected employee, up to $5,000 per calendar year.

Practical step: Visit this website and confirm when your practice last certified its OregonSaves exemption and put the next deadline on the calendar.

3. Running a traditional 401(k) when a safe harbor plan fits better

A traditional 401(k) is subject to annual nondiscrimination testing.

For dental practices, that can create a predictable problem.

The owner often wants to maximize retirement contributions. Employees may contribute at much lower rates.

The ADP test compares the deferral rates of highly compensated employees with those of non-highly compensated employees.

If your employees are averaging relatively low deferral rates while you are trying to contribute the maximum, your own contribution can be restricted or refunded after testing.

That is not a great outcome for an owner who built the plan partly to maximize tax-advantaged retirement savings.

A safe harbor 401(k) can often solve that problem.

In exchange for making a prescribed employer contribution—commonly a 3% nonelective contribution or a qualifying match—the plan can satisfy certain nondiscrimination testing requirements automatically.

For the owner, the benefit is straightforward:

Your ability to maximize your salary deferral is no longer dependent on how much your employees choose to contribute.

For the right dental practice, that can make safe harbor less of a compliance feature and more of a retirement planning tool.

4. Overlooking long-term part-time employees

Dental practices often use part-time schedules.

A hygienist may work one or two days per week. An associate may only work Fridays. A long-tenured front office employee may reduce their schedule over time.

Historically, many employers thought about retirement plan eligibility primarily in terms of working full time or not.

That is no longer enough.

Under SECURE 2.0, an employee who completes at least 500 hours in two consecutive 12-month periods may have to be permitted to make elective deferrals into the plan.

Hours worked in 2024 and 2025 can therefore affect eligibility beginning in 2026.

Five hundred hours is only about ten hours per week.

That makes this rule particularly relevant to dental practices.

Employees who become eligible solely because of the long-term part-time rules may still be excluded from certain employer contributions.

But failing to offer them the opportunity to defer when required can create an operational failure that needs to be corrected.

If your practice has long-tenured part-time employees, this is worth checking now.

5. Assuming $24,500 is the retirement plan limit

The 401(k) elective deferral limit gets most of the attention.

For 2026, that limit is $24,500.

But that is not necessarily the maximum amount that can go into your account.

It is only the employee salary-deferral component.

Total annual additions including employee deferrals, employer contributions and certain forfeitures can reach $72,000 in 2026 before applicable catch-up contributions.

That creates a significant difference:

Contribution opportunity	2026 amount
Employee 401(k) deferral	$24,500
Total annual additions limit	$72,000
Difference	$47,500

Getting beyond the employee deferral limit generally requires an employer contribution such as profit sharing.

But simply adding profit sharing is not the end of the conversation.

How the profit-sharing contribution is allocated matters.

Many plans you come across on, either from payroll companies or self-help websites, use a straightforward pro-rata formula. That may be perfectly appropriate, but it is not always the most efficient design for a dental practice owner.

Depending on the demographics of the practice, alternative allocation methods may allow the retirement plan to direct a greater share of the employer contribution toward the owner and other key employees while still satisfying applicable nondiscrimination requirements.

Age differences between the owner and staff can be particularly important.

The question isn’t simply:

“Do we have profit sharing?”

It is: “Is our profit-sharing formula designed around the economics and demographics of our practice?”

6. Leaving SECURE 2.0 tax credits unused

The cost of establishing a retirement plan is one of the reasons small employers sometimes delay starting one.

Current federal tax credits can materially reduce that cost.

For eligible employers with 50 or fewer employees and at least one non-highly compensated employee, the retirement plan startup credit can cover 100% of qualified startup costs, subject to the applicable annual limit, for up to three years.

Qualified costs can include expenses associated with:

Establishing the plan
Plan administration
TPA services
Employee education

There is also a separate employer contribution credit available to qualifying employers.

For 2026, that credit can be worth up to $1,000 per eligible employee earning $110,000 or less, with the percentage of the credit stepping down over five years.

For a small dental practice, the combined credits can significantly offset the cost of establishing and funding a retirement plan during its first several years.

New plans may also be subject to SECURE 2.0 automatic enrollment requirements, so the design needs to account for both the opportunity and the new compliance requirements.

Don’t evaluate the cost of a new 401(k) without taking into consideration valuable tax credits. Use our free tax credit calculator to estimate your savings.

7. Missing the new Roth catch-up requirement

Beginning in 2026, an important change applies to certain employees making catch-up contributions.

If you’re age 50 or older and your prior-year FICA wages from the sponsoring employer exceeded $150,000, your catch-up contributions generally must be made on a Roth basis.

That creates an important plan-design issue for owners.

If your retirement plan does not allow Roth contributions, you may be unable to make those required Roth catch-up contributions.

For 2026, the standard catch-up limit is $8,000.

Employees ages 60 through 63 may qualify for the enhanced $11,250 catch-up.

For an owner approaching or already over age 50, the question is simple:

Does your current plan document permit Roth contributions?

If you don’t know, now is the time to check.

One Opportunity: A Cash Balance Plan

For a profitable, established dental practice, even a well-designed 401(k) may not represent the full retirement planning opportunity.

A Cash Balance Plan is a type of defined benefit plan that can operate alongside a 401(k).

Rather than relying on a single flat contribution limit, an enrolled actuary determines the required and allowable funding based on factors that include:

Age
Compensation
Target retirement benefit
Years available to fund that benefit

Because older owners have fewer years remaining to fund the target benefit, allowable contributions can become substantial.

For the right practice, a cash balance plan can potentially allow an owner to make six-figure deductible annual retirement contributions in addition to amounts contributed through the 401(k).

But this is not simply a bigger 401(k).

There are two important considerations.

Cash balance plans create an ongoing funding obligation

This is a defined benefit plan. Contributions are not as discretionary as annual profit sharing.

The practice should have predictable, sustainable cash flow and the ability to fund the plan consistently.

An actuary is also required each year.

Professional practice rules can affect how the plans work together

Dental practices are professional service employers for purposes of certain PBGC rules.

Depending on the size and structure of the practice, a cash balance plan may be exempt from PBGC coverage. That exemption can affect the deduction rules when the cash balance plan is paired with employer contributions to a defined contribution plan.

This is an area where plan design matters substantially.

Cash balance plans can be powerful. They are also not something to add casually because the practice had one unusually profitable year.

What a Well-Designed Oregon Dental Practice 401(k) Looks Like

For many established practices, the answer does not require an exotic retirement strategy.

A strong starting point may include:

A Safe Harbor 401(k) that allows the owner to maximize salary deferrals without relying on employee deferral rates
A profit-sharing component that creates room for contributions above the employee deferral limit
An allocation formula designed around the actual demographics of the practice
Appropriate Roth provisions
Eligibility provisions that properly account for part-time employees
A process for reviewing the plan as the practice grows and changes

For some highly profitable practices, a cash balance plan can create another layer of opportunity.

Has Your Practice Outgrown Its 401(k)?

A retirement plan should change as the business changes.

If your practice has grown significantly since the plan was established, ask four questions:

Is our plan safe harbor?
Are we using profit sharing effectively?
Does the plan allow Roth contributions?
When was the contribution allocation formula last reviewed?

If you don’t know the answers, or nobody has reviewed the design in the past 3 years, it may be worth taking another look.

Schedule a retirement plan design review and we’ll walk through your current plan, how it is structured and where there may be opportunities to improve it.

Independent Retirement works with dental practices and other small businesses across Oregon, southwest Washington, and beyond to review existing retirement plans, identify design gaps and determine whether the plan still fits the business it serves today.