Written By Caitlin See
Updated on September 24, 2025
What’s one of the most common and costly mistakes veterinarians make when planning for retirement? Contributing to a traditional IRA thinking it’ll lower their taxable income and, in turn, reduce their federal student loan payments.
On paper, the logic makes sense. After all, traditional IRAs are touted for their upfront tax benefits. But most veterinarians (unknowingly) earn too much to qualify for the tax deduction. As a result, they don’t get the tax break they were counting on, their student loan payments stay the same, and their money is locked away until retirement age.
Let’s break down why most veterinarians should avoid contributing to a traditional IRA — and when it might make sense for some.
The problem with traditional IRAs for veterinarian retirement planning
Let’s say you earn $200,000 and decide to contribute the maximum $7,000 to a traditional IRA. You might expect this strategy to reduce your taxable income to $193,000, lowering both your tax liability and your monthly student loan payment under an income-driven repayment (IDR) plan. But there’s a critical piece missing from the equation: Traditional IRA deductions are subject to income limits.
Unlike Roth IRAs, which outright prohibit contributions past certain income levels, traditional IRAs allow anyone to contribute regardless of income. However, whether that contribution is tax-deductible depends on three key factors:
- Your tax filing status.
- Your modified adjusted gross income (MAGI).
- Whether you (or your spouse) are covered by a retirement plan at work, such as a 401(k).
Here’s where many veterinarians get tripped up. If you’re covered by a workplace retirement plan — and most full-time veterinarians are — you begin to lose deduction eligibility as your income rises. For example, the traditional IRA deduction for tax year 2024 starts phasing out at $77,000 for single filers and disappears completely at $87,000.
In other words, if you earn above the IRA deduction limits, contributions to a traditional IRA won’t reduce your taxable income — meaning no upfront tax benefit and no reduction to your student loan payments. Despite not receiving a tax advantage, your money will also be locked away until age 59½ (unless you want to pay early withdrawal penalties), and your distributions will be taxed as ordinary income come retirement age.
What are the deduction limits for traditional IRAs?
The IRS sets income thresholds to determine whether you can take a full deduction, a partial deduction or no deduction at all based on your MAGI, tax filing status and whether you (or your spouse) are covered by a retirement plan at work.
If you’re single and aren’t covered by a retirement plan at work, you can take the full deduction up to the amount of your contribution limit. The same applies if you’re married filing jointly or separately and neither you or your spouse have access to a workplace retirement plan.
But if either you or your spouse are covered by a retirement plan at work, then your income will come into play.
If you are covered by a retirement plan at work (2024)
Here’s a breakdown of deduction eligibility if you’re covered by a workplace retirement plan:
| Filing status | Full deduction | Partial deduction | No deduction |
|---|---|---|---|
| Single | $77,000 or less | More than $77,000 but less than $87,000 | $87,000 or more |
| Married filing jointly | $123,000 or less | More than $123,000 but less than $143,000 | $143,000 or more |
| Married filing separately | N/A | Less than $10,000 | $10,000 or more |
If you aren’t covered by a retirement plan at work but your spouse is (2024)
Note that there are different income limits if your spouse has access to a workplace retirement plan, even if you don’t. In which case, IRA deduction limits are as follows:
| Filing status | Full deduction | Partial deduction | No deduction |
|---|---|---|---|
| Married filing jointly | $230,000 or less | More than $230,000 but less than $240,000 | $240,000 or more |
| Married filing separately | N/A | Less than $10,000 | $10,000 or more |
Why contributing to a traditional IRA doesn’t make sense for most veterinarian retirement planning
Most veterinarians earn $100,000 to $200,000 annually, well beyond the $77,000 full deduction limit for single filers. Small animal general practitioners, specialty vets, practice owners and even relief vets — depending on workload and location — easily bring in six figures or more. That said, there are outliers that might fall under the threshold, such as some large animal vets or veterinarians in less populated areas of the country.
Given that the vast majority of veterinarians earn $100,000 or more, those who are putting money into a traditional IRA are getting no immediate tax benefit and locking up their funds for decades.
Let’s look at some specific scenarios where contributing to a traditional IRA isn’t the most strategic choice for veterinarian retirement planning.
Scenario 1: Single veterinarian with no retirement plan at work
If you’re single and covered by a workplace retirement plan, your ability to deduct traditional IRA contributions begins to phase out at $77,000. If you’re earning more than $87,000, which again most veterinarians are, you get zero deduction.
Scenario 2: Single veterinarian with no retirement plan at work who does 1099 relief work on the side
Technically, you can deduct a traditional IRA contribution if you’re not covered by a retirement plan at work. But let’s say you do some relief work and, therefore, have 1099 income. You now have a better veterinarian retirement option: a solo 401(k).
Not only does a solo 401(k) allow for much higher contribution limits (e.g., up to $70,000 in 2025 if you include profit-sharing contributions), but it also won’t interfere with any future backdoor Roth conversions the way a traditional IRA might.
Scenario 3: Married veterinarian who has a retirement plan at work
If you’re married filing jointly and covered by retirement at work, your IRA deduction phases out between $123,000 and $143,000 in combined household income. Many veterinarians earn more than that on their own, meaning they’re already over the deduction limit before factoring in their spouse’s income. However, if your spouse stays at home without income, you might fall below the threshold depending on your actual income.
Scenario 4: Married veterinarian filing separately with a retirement plan at work
This scenario is especially painful. If you file taxes separately and are covered by a retirement plan at work, you’d have to make less than $10,000 a year to claim a partial deduction for traditional IRA contributions. Since every practicing veterinarian earns more than that, you get no deduction when married filing separately — full stop.
Unfortunately, a lot of veterinarians fall into this scenario because many are filing separately as part of their student loan repayment strategy and unknowingly not reaping the benefit they’re hoping for.
Scenario 5: Married veterinarian with no work retirement plan, but they have 1099 income and their spouse is covered
Now we’re in even more specific scenario territory. If your spouse is covered by a retirement plan but you aren’t, your IRA deduction phases out between $230,000 and $240,000. So, if your household income exceeds $240,000, you’re out of luck on the deduction again.
If you have 1099 income from relief work or other side gigs, a solo 401(k) can give you far more bang for your buck with higher contribution limits and more favorable veterinarian retirement planning opportunities.
Scenario 6: Married veterinarian filing separately with a spouse who is covered at work
We’re back to the $10,000 income limit. If you’re in this category of MFS with a spouse who has a retirement plan at work, there are always better options than contributing to a traditional IRA.
When it might make sense for a veterinarian to consider a traditional IRA
While traditional IRAs don’t make sense for most veterinarians, there are a few rare scenarios where they could be beneficial:
- You’re a single veterinarian with no retirement plan at work and no 1099 income. If you don’t have retirement at work and aren’t doing any relief work, you might qualify for the full IRA deduction depending on your income.
- You’re married filing jointly and neither of you has a workplace plan or 1099 income. In this needle-in-a-haystack scenario, both spouses lack employer retirement plans and independent contractor income. In which case, you’d be eligible for the full IRA deduction.
- You’re married filing jointly with no retirement plan at work (but your spouse is covered) and no 1099 income. Depending on what your spouse does for work, you might be able to claim a full or partial deduction if they have more limited income.
These particular situations are fairly rare considering the average veterinarian salary. And even then, a traditional IRA isn’t always the best choice for veterinarian retirement planning purposes.
Get veterinarian retirement guidance
For most veterinarians, contributing to a traditional IRA offers no tax benefit — especially if you or your spouse has a retirement plan at work and earns over the IRS deduction limits. So, what are some better alternatives? Consider maxing out your 401(k) or investing the funds into a taxable brokerage account to maintain flexibility and benefit from long-term capital gains treatment. If you do relief work or have other 1099 income, a solo 401(k) can open the door to much higher contribution limits and more control over your veterinarian retirement savings.
Already contributed to a traditional IRA without the tax deduction? You’re not alone. It’s a common mistake we see regularly. What to do next is a more nuanced discussion that our SLP Wealth team can absolutely help with.
The right veterinarian retirement strategy starts with knowing the rules and planning around them. SLP Wealth offers veterinary-specific financial planning services to help you reach your retirement goals faster.
