Smart Investment and Estate Planning Strategies for Vet Owners

You’ve worked hard to build a successful veterinary practice, which has likely contributed to growing your personal wealth. However, now that you’ve established financial success, it’s important to consider how you can manage and invest your funds effectively for long-term security, as well as ensure that your estate is properly planned for future generations.

Investment and Estate Planning Strategies

Here are some key strategies for investing and estate planning that can help you manage and protect your wealth.

IRA Contributions and Conversions

One way to start organizing your investments is by cleaning up your traditional IRAs. If you haven’t already, consider converting them to Roth IRAs.

Roth IRAs offer tax-free withdrawals in retirement, and this can be especially valuable if you expect to be in a higher tax bracket when you retire. By making the conversion, you pay taxes now, instead of on your retirement withdrawals.

If you have children who are doing legitimate work for your practice, consider starting IRAs for them. Contributing to their retirement early gives them the advantage of compounding interest and helps them build wealth over time.

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Invest Idle Funds

If your business has extra funds sitting in a low-interest checking account, you’re missing out on growth opportunities.

Speak with your banker about other investment options – there may be higher-yield savings accounts or money market accounts that could provide a better return without locking up your funds for extended periods. Investing these funds wisely can give you more financial flexibility in the future.

College Savings Plans

Another avenue to consider is a college savings plan, such as a 529 account. These plans offer tax advantages as long as the funds are used for qualified education expenses, and they allow your contributions to grow over time.

Given the rising costs of education, starting a 529 account early is a strategic move for any family with college-bound children.

Explore Other Retirement Account Options

Aside from IRAs, there are several other retirement account options that could be worth exploring. A SEP IRA or SIMPLE IRA may provide tax advantages and are particularly appealing if your practice employs a small team.

Exploring these options will ensure you’re making the most of available tax benefits and preparing adequately for retirement.

Estate Planning: Trusts, Wills, and More

Once you’ve built your wealth, it’s time to look at how your assets are structured. Are your assets in a trust? Trusts can help protect your wealth and ensure it’s distributed according to your wishes.

Trusts also offer tax benefits and help avoid probate. Be sure to have a will in place and consider working with an estate planning professional to make sure everything is in order.

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Keep an Eye on Changing Tax Laws

As we approach 2025, it’s important to stay aware of potential tax law changes. Some tax rates are set to sunset, which could impact your estate planning and retirement strategy.

Keep informed and work with your financial advisor so you can make timely adjustments to your plan and continue to maximize tax efficiency and protect your wealth.