Financial Planning Through the Stages of a Veterinary Career – Part 3 – Years Six Through Ten

As a veterinarian, you've already made it through the first five years of your career, which can be a challenging time financially. But as you approach years six to ten, there are new financial challenges and opportunities to consider. Whether you're starting a family, blending assets with a new spouse, or exploring buying a practice, it's important to take a goals-based approach to your financial planning.

Here are some key considerations for veterinarians in years six to ten of their careers:

Blending Assets with a New Spouse

If you're blending assets with a new spouse, it's important to have an open and honest conversation about your finances. Consider creating a joint budget and reviewing your debts and assets together. You may want to work with a financial planner to help you navigate this process and ensure that you're both on the same page when it comes to your financial goals.

Starting a Family

If you're starting a family, congratulations! It's an exciting time, but it can also be a costly one. You'll need to plan for expenses such as prenatal care, childbirth, and childcare. Consider setting up a separate savings account specifically for these expenses. You may also want to review your health insurance coverage to make sure it will cover the cost of childbirth and any necessary medical care for your newborn.

Getting a Will

No one likes to think about their own mortality, but it's important to have a will in place, especially if you have children. A will can ensure that your assets are distributed according to your wishes and that your children are taken care of if something happens to you and your spouse. Consider working with an estate planning attorney to help you create a will that meets your needs.

Planning for Your Children's Education

If you have children, and one of your goals is to financially assist them if they go to college, you'll want to start saving for their education as soon as possible. Consider opening a 529 college savings plan, which allows your savings to grow tax-free and can be used for qualified education expenses. Tax deductions for contributions to 529 plans are unique to each state.  Research the 529 plans available in your state that are eligible for a tax deduction, or work with your financial advisor to determine the best plan for your goals.

Paying Down Student Loans

If you're making progress on paying down your student loans, keep up the good work! Now is a good time to review your repayment options to determine your final payoff strategy and to determine if any of your loans may qualify for loan forgiveness.

Retirement Savings

By this point in your career, your income has likely increased, and you should have more budget flexibility for retirement savings.  While everyone’s retirement goals and savings rates are different, a good goal for a retirement savings rate at this stage of your career is 10% to 15% of your income, including any eligible employer contribution to your retirement plan.  In addition, if you've changed clinics since you started your career, you may have balances in your former clinics' retirement plans. If this is the case, you will want to explore your options for these accounts for consolidation purposes and to ensure they are properly managed to meet your goals.

Pre-Retirement Financial Goals

While retirement savings should be a priority, you may also have other financial goals to consider, such as buying a house, starting or buying a veterinary practice, or making major purchases such as vehicles and vacations.  In addition to retirement savings, building liquid assets in non-retirement accounts will be helpful to help you achieve your pre-retirement financial goals.

If you are exploring buying a practice, going into solo practice, or going into relief work, you'll also need to be building savings for initial capital needs and exploring bank financing options to make sure your financials are in order. 

Financial planning in years six to ten of a veterinarian’s career takes on a very goals-based focus. Whether you're starting a family, blending assets with a new spouse, or exploring buying a practice, it's important to have a plan in place that meets your unique goals. As your career progresses, and you start setting goals for your life and career, your financial plan also becomes more complex.  At this point, if you haven’t already, it may be beneficial to engage the services of a financial advisor to educate you on your options, help you clarify your goals, and work with you to navigate the path to achieving your goals.