An example
For a 55-year-old relief veterinarian who sold her practice and now works as a 1099 contractor, the 2026 figures work out like this:
- Cash balance plan, first year
- $245,000
- Solo 401(k) alongside
- $0
- Both plans
- $245,000
- A Solo 401(k) on its own
- $80,000
- Federal income tax saved
- $26,900
Federal income tax only, compared with making no retirement contributions. State tax saved depends on where you live: see savings by state. An illustration from the same calculation as the estimate, not a quote.
Veterinarians are generally a specified service business for the 20% qualified business income deduction. Above the income threshold that deduction phases out, and a contribution that brings taxable income back down can restore part of it. How the deduction interacts with contributions
Relief work is the natural fit
Relief veterinarians bill clinics for shifts and coverage, usually as sole proprietors or through a single-member LLC. The income is self-employment income, there is no employer plan attached to it, and a vet working for several clinics can earn enough to use the higher limits of a cash balance plan. See sole proprietors and single-member LLCs.
The label on the arrangement is not what decides it. If one clinic sets your schedule, supplies everything and directs how you work, the IRS may see you as that clinic's employee, and the income would then be wages that cannot support your own plan. Working for several clinics on your own terms is the clearer case.
Some relief vets also keep a part-time W-2 position at one clinic. That salary belongs to the clinic's plans, and 401(k) deferrals made there share one per-person limit with a Solo 401(k). See a W-2 job and a side business.
After selling a practice
A common path is to sell a practice, often to a corporate group, and keep working as a relief vet. The money from the two is treated very differently.
- Sale proceeds, including payment for goodwill, are not earned income and cannot support a contribution, however large they make that year's return.
- Salary as the buyer's employee under a transition agreement belongs to the buyer's plans, not yours.
- Relief work through your own business after the transition is self-employment income and can support a plan.
If the practice you sold had a defined benefit plan of its own, mention it when a new plan is designed. Earlier benefits in the same or a related business can reduce what a new plan may provide.
Relief work after a sale is often part-time or seasonal by choice. The plan's minimum contribution is a yearly commitment, so it helps to size the plan to the relief income you expect to keep, not to a peak year.
Clinic owners and ownership stakes
A clinic with technicians, assistants or receptionists has employees, and a plan covering only the owner would fail the coverage rules once they meet the plan's age and service conditions. The same can apply if you own 80% or more of a clinic with staff, or a share of an emergency or specialty hospital that, combined with family or co-owners, reaches the controlled group thresholds. A mobile practice with a hired assistant is in the same position. See who can have a solo cash balance plan.
Veterinary work and the QBI deduction
Treasury regulations name veterinarians in the definition of the health field, so a veterinary business is a specified service. The deduction phases out between $403,500 to $553,500 of taxable income for a married couple filing jointly, and $201,750 to $276,750 for a single filer. A contribution lowers qualified business income as well as taxable income, which changes how much the deduction is worth; see the QBI deduction and retirement contributions.