This article originally appeared in the Fall 2024 issue of EquiManagement. Sign up here for a FREE subscription to EquiManagement’s quarterly digital or print magazine and any special issues.
It’s easy to become so caught up in the unrelenting responsibilities of veterinary practice and family that attending to your financial future gets left behind. However, making your money work for you is more important than ever in a climate of inflation, high interest rates, and a career with a high rate of injury.
Disability and Life Insurance for Equine Practitioners
One of the most important ways to safeguard your financial future is to be sure you have adequate disability insurance. Equine practice is dangerous, and a significant number of veterinarians are seriously injured each year. Some practitioners that are horse owners get injured while riding or competing during their off hours, but no matter how the injury occurs, it can impact a person’s financial security and that of their family. If a veterinarian is permanently disabled, their earning power is often markedly affected. Some, like Andy Clark, DVM, MBA, who suffered a life-threatening injury during his career as a sports medicine practitioner, retool their future with additional education. Clark earned his MBA and achieved great success in many business roles within the veterinary industry, including heading the AVMA Life Trust, a leading provider of veterinary disability insurance.
In other cases, an injury might be fatal, and a family might be left without a primary breadwinner. Life insurance can make a huge difference for the family’s future. A level term life insurance policy is a necessity for anyone who has others depending on their income.
Retirement Savings for Equine Veterinarians
Retirement savings are another form of security, in this case for your old age. Social Security can only provide a portion of the funds you’ll need when you stop working, which, depending on the injuries you accumulate over your career, could be sooner than you had hoped. The earlier you begin saving, the more your funds will grow. According to Mass Mutual, to have a retirement nest egg of roughly $2.38 million by age 67, assuming an average annualized return of 8%, you’ll need to save $475 per month if you start saving at age 22 and $2,515 if you start at 42. There can be significant tax savings with a traditional retirement account, but saving for retirement with a Roth IRA that you contribute after-tax dollars to can be even more beneficial, because you won’t need to pay taxes on the money you withdraw in retirement.
The federal government offers inflation indexed savings bonds that are great for investing up to $10,000 per year, the allowed limit. Series I bonds give investors a return plus inflation protection on their purchasing power and are considered low-risk investments. Unlike traditional savings bonds, I bonds earn interest through a combination of a fixed rate, which remains constant throughout the life of the bond, and a variable inflation rate that is adjusted twice a year based on the Consumer Price Index.
Importance of Paying off Loans
With interest rates higher than they’ve been in a decade, paying off high-interest loans and avoiding credit card debt are smart money moves. Even an extra $100 per month on a mortgage or personal loan can make an appreciable difference in the total interest you pay. With educational loans, analyze the best payment strategy carefully. You can find help at vin.com/studentdebtcenter.
Keeping an Emergency Fund
Everyone should have an emergency fund that is easily accessible for unforeseen expenses. Usually, experts recommend having three months of expenses saved in this account. High-yield savings accounts are the place for these funds. You can explore those with the highest rates at nerdwallet.com/m/banking/standout-online-savings-accounts.
Final Thoughts
Seeking a certified financial advisor’s services early in your career is one of the wisest moves you can make. These professionals can give you excellent advice on how to manage your earnings, minimize your taxes, and save for your future.
Although life is chaotic and busy sometimes, don’t leave your financial future to chance. It deserves your attention.
Related Reading
- Strategies for New Veterinarians to Pay Off Student Debt
- Business Briefs: The Importance of Capturing Revenue
- The Business of Practice: Changing the Equine Practice Business Model
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