Don’t let your pets eat your nest egg «

    Don’t let your pets eat your nest egg

    Many people fear that an expensive health crisis could derail their retirement plans. Fewer of us realize that the crisis might involve, say, a corgi or a short-haired Abyssinian. But financial adviser Richard Rosso, writing in MarketWatch’s Retirement Weekly newsletter, argues that pet-related money problems are surprisingly common among his older clients—and that owners of dogs, cats, pot-bellied pigs and other animal companions should plan accordingly.

    Shutterstock.comIf they aren’t feeling well, they’ll eat your savings.Like (human) health-care costs, pet-care expenses have risen considerably faster than inflation since the turn of the century. Quirky coincidence: They each increased by 87% between 2001 and 2012, according to statistics from the American Pet Products Association and the federal Centers for Medicare and Medicaid Services. (Spending on health care, of course, is many times greater than what we spend on pets.)

    In the case of pet spending, which topped $55 billion last year, much of the increase is driven by owners’ willingness to pamper their animals with the likes of Hermès dog beds and free-range, cruelty-free kibble. Rosso, a Houston-area financial practitioner and self-confessed chihuahua owner, says that empty-nest boomers are particularly prone to indulging their surrogate kids from the animal kingdom. Owners have also grown more willing to spend on intensive medical care for their pet companions; Rosso says catastrophic-care pet bills of $3,000 to $5,000 per incident have become relatively routine.

    Rosso’s advice, in a nutshell: Build your pet expenses into your budget, and set aside money for their care in the same automatic way that you sock it away for retirement. That might include budgeting $40 a month or so for veterinary insurance premiums (though, as MarketWatch’s Jeanette Pavini has pointed out, many pet-insurance policies are riddled with exemptions that restrict your coverage); an alternative could be to set aside money each month in a pet emergency fund so you can self-insure.

    Keep in mind, too, that in one sense, your pets may pay you back as you age: Ownership of pets in general and of dogs in particular has been associated with better heart health, lower blood pressure and anxiety reduction.

    Retirement Weekly is a paid subscription service edited by MarketWatch columnist Robert Powell; to find out more about it, click here.