Written By Jake Courtney, CFP®, CSLP®
Updated on October 9, 2026
You've been contributing to your 401(k), funding your backdoor Roth IRA and making progress toward retirement. But what about the money you want to use before you're 60?
Maybe you're planning to buy a dental practice in a few years. You'd like to retire early, take a year off or buy a vacation home. Or perhaps you're earning more than you spend, and your checking account balance keeps growing because you haven't decided what to do with the extra money.
A taxable brokerage account can help you prepare for those goals while keeping your money accessible. The important part is deciding when you'll need the money and how much investment risk makes sense along the way.
What makes a brokerage account useful for dentists?
A taxable brokerage account lets you invest in stocks, bonds, index funds and other investments using money you've already paid income taxes on.
Unlike a 401(k) or IRA, there’s no annual contribution limit. There’s no early withdrawal penalty either. You can sell and take money out whenever you need it, though you may owe taxes on any investment gains.
That flexibility can be valuable when your financial goals extend beyond retirement.
For example, the 2026 employee contribution limit for a 401(k) is $24,500, and the standard IRA contribution limit is $7,500. If you've already funded those accounts, a brokerage account gives you another place to invest.
You may also have good reasons to open one before maxing out retirement contributions. A dentist preparing to purchase a practice might need access to substantial savings in three years. Meanwhile, an eligible self-employed dentist could have additional tax-advantaged savings opportunities through a solo 401(k).
The right decision depends on how much you're saving, which accounts you have available and when you expect to spend the money.
Match your brokerage account to your financial goals
One of the first questions to answer is what you're saving for. The timeline helps determine how you invest the money and when you should reduce risk.
Buying a dental practice in the next 2 to 5 years
If you're an associate dentist planning to buy a practice, you've probably started thinking about how much cash you'll need for the purchase.
Lenders may count brokerage assets as part of your liquidity when you apply for a practice loan. That gives you another potential reason to build savings outside your retirement accounts.
However, the investment strategy deserves some attention.
Imagine you've saved a substantial down payment and plan to buy a practice in two years. If most of that money is invested in stocks, a market drop could shrink your down payment right when you need it.
You could hold conservative investments in a brokerage account. But for money you’ll need soon, a high-yield savings account or similar cash option may be the better fit.
The closer you get to the purchase, the more important it becomes to protect the money you've accumulated.
Preparing for the student loan forgiveness tax bomb
If you’re on track for income-driven repayment (IDR) forgiveness, you may have another big expense coming.
Starting in 2026, balances forgiven through IDR are generally taxed as income. Some exceptions may apply.
If you're expecting a large balance to be forgiven, that could mean a substantial tax bill.
A brokerage account can help you build the savings needed to pay it. If forgiveness is still many years away, you may have time to invest some of those savings for growth.
As the expected forgiveness date approaches, you'll want to reduce your exposure to market losses. By the time the tax payment is due, those funds should be in cash or similarly low-risk holdings.
This is a good example of why your investment strategy should change as the date you need the money gets closer.
Retiring early or taking time away from dentistry
Suppose you're 45 and financially ready to stop working. You've built substantial retirement savings, but most of your investments are in accounts that generally impose penalties on early withdrawals unless an exception applies.
You may need another source of income until you can access those funds without an early withdrawal penalty.
If you're planning to retire early, a brokerage account can serve as a bridge fund.
If you retire at 45, you could potentially use brokerage assets to cover living expenses until age 59½, when penalty-free access to many retirement accounts becomes available.
The same concept works if you'd like to take a yearlong sabbatical. Instead of pulling from retirement savings, you can build an account just for that year.
And if you change your mind about retiring early, the money remains available for another goal.
Saving for goals you haven't identified yet
Some financial goals are easy to predict. Others develop as your circumstances change.
Maybe you'll eventually want a boat, a vacation property or the ability to help a family member financially.
At SLP Wealth, some clients build what we call a “slush fund” or “financial freedom fund.” One client even calls it a “confetti account.”
The idea is to save for future opportunities without needing to know exactly what they'll be.
That can be particularly useful if you have a strong savings rate but aren't sure how you'll want to spend your money over the next 10 or 20 years.
How should you invest money in a brokerage account?
Opening the account is relatively simple. Deciding what to hold inside it requires more thought.
For money you won’t touch for at least 10 years, a mix of low-cost index funds may make sense. The same principles you use in your retirement accounts apply here.
If you'll need the money sooner, consider a more conservative allocation.
There's also a practical mistake worth avoiding. You can automate contributions to a brokerage account without automatically investing those contributions.
Depending on your account settings, new deposits may accumulate in a money market or cash position. That's useful when you're intentionally holding cash for a near-term goal. It can work against your plan when you're trying to invest for long-term growth.
Another common temptation is to treat a brokerage account as an opportunity to trade individual stocks, options or other speculative investments.
Because you can access the money whenever you want, it's easy to start making investment decisions based on short-term market movements.
If you want to dedicate a small portion to speculative investments, consider how much you could lose without affecting your financial goals. Your long-term savings shouldn't depend on those investments succeeding.
Understand the taxes before you start withdrawing
Brokerage accounts provide flexibility, but they don't offer the same tax advantages as retirement accounts.
When you sell an investment for more than you paid, the profit is a capital gain.
If you held the investment for one year or less, the gain is generally taxed as ordinary income. Investments held longer than one year typically qualify for federal long-term capital gains rates of 0%, 15%, or 20% depending on your taxable income.
For 2026, married couples filing jointly can qualify for the 0% federal long-term capital gains rate on gains that fall within the first $98,900 of taxable income.
That creates potential planning opportunities during early retirement, especially if your taxable income decreases after you stop working.
Remember that the amount you withdraw and the amount of taxable gain are different. If you sell $120,000 of investments, part of that amount may represent your original investment.
Other income also affects your capital gains tax rate. Higher earners may owe an additional 3.8% net investment income tax.
Dividends can create taxable income even when you reinvest them. That's one reason to consider the tax treatment of investments across your retirement and brokerage accounts, including opportunities for tax-loss harvesting.
Review how your brokerage account is owned
Before you accumulate a substantial balance, consider how your account is titled.
An individual brokerage account is owned in your name. You can generally designate a beneficiary to receive the assets when you die, which may help avoid probate.
Married couples can also consider joint ownership with rights of survivorship. Depending on applicable law, this may offer an additional benefit through a partial adjustment to the investments' cost basis when one spouse dies.
For example, suppose a couple owns a brokerage account worth $100,000 with an original cost basis of $50,000. Under common joint-ownership rules, the surviving spouse's basis could increase to $75,000 after the other spouse dies. Different rules can apply to community property.
If your account is large or your estate plan is complex, ask an estate planning attorney about a revocable living trust.
The important detail is making sure the account's legal ownership matches your estate plan. Creating a trust without properly transferring assets into it may leave those assets outside the trust.
Decide what your money needs to accomplish next
If you're saving more than you spend, you have options. You can prepare for a practice purchase, build the funds needed for early retirement or set aside money for a goal that may still be years away.
A brokerage account gives you flexibility to pursue those plans. How you invest within the account should reflect your timeline, your other savings and the risk you can afford to take.
If you're unsure how a brokerage account fits alongside your 401(k), student loans and other financial priorities, schedule a call with SLP Wealth. We can help you decide how much to save, where to invest it and how to prepare for the goals you want to accomplish.
