Secrets to retiring securely-for every stage in your veterinary career

Do you want to buy a boat? Do you want to have kids? Do you want to be able to afford a vacation home in Tahiti? What does any of this have to do with your career? Everything, says Dr. Karen Felsted, CPA, MS, CVPM, president of Felsted Veterinary Consultants in Dallas, Texas. "You have to make sure that the choices you make will help you accomplish your goals not just professionally, but personally, too," she says.

This means first and foremost figuring out what your top priorities are (e.g., owning a practice, getting married, buying a house, retiring to Hawaii, and so on.) Once you figure out your end goals, take a look at what these expert veterinary consultants and financial advisors suggest to secure a successful future in veterinary medicine—no matter where you are in your journey.

3 ways to get your veterinary school debt down

New graduates

If you're a veterinary student right out of college, ears up and tail wagging, Veterinary Economics Editorial Advisory Board member Dr. Karl Salzsieder, JD, of Salzsieder Consulting and Legal Services in Longview, Wash., has two main pieces of advice to secure your future financial success:

1. Get a job that may not offer the highest pay, but gives you the most experience with a good mentor.

2. Negotiate your contact.

Once you've scored the job offer with a practice that meets your requirements, he suggests saying something like, "Doctor, this offer may not be the highest salary in the marketplace, but I like your practice. I'll take the pay or production compensation—whichever is greater."

Dr. Salzsieder warns that there will be employers who resist production compensation because they're concerned about the employee competition or they think that they shouldn't offer production compensation in the first year. He can't get behind either excuse.

"What difference does it make to give new employees base pay, that may not be as high as it could be, or the production? Other than the extra bookkeeping, it's no big deal," Dr. Salzsieder says. "It's win-win to help the student get more compensation if they earn it."

Nervous to make that counter-offer? Don't be, Dr. Salzsieder says. It shows an employer that you're thinking about finances, which is a huge plus in a long-term employee. It's a good sign that you're an associate who's more likely to comply with fee schedules and less likely to give away veterinary services.

"Look for a job that has enough patients coming through the door, so you're notfighting over five patients a day, and the financial rewards will come," Dr. Salzsieder says.

Another important skill to master at this stage is budgeting for personal finances, says Gary Glassman, CPA, another Veterinary Economics Editorial Advisory Board member and partner with Burzenski & Co. in East Haven, Conn. Recent grads are faced with large expenses right off the bat—furniture, houses, cars, marriages and so on. These expenses, along with managing school debt, mean you need to budget all of your funds accordingly so you don't slip farther into debt.

"The best way to do this is by planning ahead and living within your means," Glassman says. "Sometimes that means prioritizing purchases and holding off on some."

However, don't hold off on securing life and disability insurance at this point, he says. Glassman explains that insurance fills a void of necessary funds to take care of obligations. Not to mention, purchases of these products are also at their cheapest price when veterinarians are young.

Experienced associates

In this next stage of your veterinary career, you may not be the biggest dog on the block, but it certainly isn't the first time you've been let off of your leash. Glassman refers to this middle stage as your wealth-building years and says it's the time to set money aside for retirement, to start college savings accounts for children and to consider practice ownership.

"There are very few ways to build the wealth necessary to retire comfortably without considering practice ownership," Glassman says.

And don't let that school debt burst your dreams of owning. Glassman says most veterinary lenders realize this debt exists and can still offer loans for practice ownership. One of the biggest roadblocks for veterinarians is scrounging up the practice down payment, but he says veterinary lenders are accustomed to lending with these restrictions and understand them.

Pre-retirement doctor

At this point you probably don't run as fast or jump as high as you used to, and after decades of hard work you're ready to curl up by the fireplace and retire. But what if, in the end, you found out your practice wasn't worth what you thought it was and you'd have to work three more years to retire securely?

Unfortunately, Dr. Salzsieder says this isn't a rare situation. He appraises practices that are bringing in more than $1 million gross income a year, and the practice owners are counting on selling out between $750,000 and $1 million. Then Dr. Salzsieder appraises the practice, finds a discrepancy in what they thought were practice earnings and all of a sudden it's only worth $300,000.

"We brokers see this all the time. Veterinarians go into a state of shock, 'I wanted to sell, but now I have to keep working,'" Dr. Salzsieder says.

This is why he says it's so important to hire an appraiser early on, even if you're not ready to retire for another 10 years. The sooner you realize where the discrepancies lie in your practice's finances, the sooner you can correct them and get back on track.

Glassman agrees. He says hiring a financial planner is a must to review assets and ensure that there are enough funds to last through the expected retirement. Few veterinarians are aware of the asset base necessary to supply an income stream for the rest of their lives.

After you're qualified to get enough cash to retire, then Dr. Salzsieder says you have some decisions to make. Are you still going to collect some money from renting the building and get some long-term return on investment? Or are you going to coach your associates and hold off selling for a few more years and still collect some profits?

"I bought a practice in '05, and I visit every three to six weeks for half a day, but otherwise I'm an absentee guy. I just collect my return on investment," Dr. Salzsieder says. "You can decide if you want to model it that way or if you want to sell the practice and negotiate a building lease."

He says that in the veterinary profession it's common that associates don't like to let nonpracticing veterinarians get a return on investment if they don't sell the practice. Dr. Salzsieder finds this trend disturbing.

"Associates commonly say, 'You're retiring, you're out of here,'" Dr. Salzsieder says. "We're shooting our own profession in the foot because we don't let our senior veterinarians draw a return on investment."

One possible solution? Change the shareholders agreement and adjust it so the nonworking veterinarian has less management authority or less votes when it comes decision time, Dr. Salzsieder says.

"Why can't they own shares in a veterinary hospital just like they own shares in Microsoft?" Dr. Salzsieder says. "We can get around the fairness power game and still help veterinarians retire."