Each stage of a veterinarian’s career brings unique financial planning considerations, with each stage building on the last.
These stages start in school when you’re considering the right specialty, choosing rotations and externships, and eventually negotiating your first employment contracts.
Upon graduation, you start your career and are faced with your first set of financial planning milestones. How should you handle your student debt? Will you consider owning a practice in the future? Are you going to start a family? How do you manage your finances to get started on the right financial track? Your financial planning is primarily focused on debt reduction, building emergency savings, and starting your retirement savings.
After a few years in practice, you are becoming established and making larger life decisions. You have started to accumulate some savings, income has increased, debt has started to reduce and it’s time to enter the next phase of your financial planning. You may now be married and are considering having or have started having children. You may be looking to purchase a home. You may have also experienced a job transition and changed clinics. You are gaining experience and moving forward in your financial life. Your planning focus transitions from the basics to goals-based planning and lifestyle considerations through your professional career.
As you approach your 40’s, your career is in full swing. You’re in your prime. Student loan debt is closer to being paid off. If you aspired towards practice ownership, the planning you started in your early career may now be coming to fruition. You may buy into a practice group, decide to be a sole owner, or may even decide to be a solo practitioner or relief veterinarian. The kids are growing up and planning for their education becomes a consideration. You, and possibly your spouse, have started to accumulate savings, retirement and other investments and need more help in managing those assets. Your financial plan progresses to a long-term holistic approach as the many parts of your financial life come together to paint a larger picture.
Entering into your 50’s, things should be coming together. Your assets and income continue to grow. The kids are near or in college and the funds you may have set aside for their education are starting to pay out. If you own a practice, it has hopefully continued to grow and become a substantial asset on your personal balance sheet. You may be maximizing your retirement savings as the kids are coming off the household payroll and you have more flexibility in your own savings and spending. You are also likely starting on envision what retirement may look like and may begin to plan your exit strategy. You may even start taking extended time off as “test” or mini-retirements. Planning is now focused on wealth accumulation, and you are starting to consider topics like long-term care planning.
As you move closer to your 60’s, the thought of retirement becomes primary. What does retirement look and feel like? Will you continue to work either full or part-time? Do you want to scale back your hours and responsibilities? If you own a practice, what’s the succession and exit strategy? Will you sell to an associate, to a larger entity, or close shop? Can you generate income from leasing back your clinic to the new owner? What will you do in retirement? Travel? Pursue your hobbies? Teach? Mentor? Volunteer? What about retirement pitfalls like health care and long-term care costs? Your career long planning is entering the final stage, where you can start to enjoy the fruits of your labor. Your financial plan now emphasizes career exit strategies, business succession, retirement income strategies, and legacy planning.
Sometimes navigating the myriad of planning options through the stages of your career can seem daunting. However, with the right guidance and education, you can empower yourself with greater financial freedom, stress reduction and confidence. That’s what we’ll explore in this series of articles, “Financial Planning Through the Stages of a Veterinary Career”. In them we will look at the financial considerations of each stage of your carers and provide insight that we hope will help you navigate the options, and avoid some of the speed bumps and roadblocks along the way.