Planning for retirement may not feel urgent when you’re working long shifts, managing patient care, or balancing family life. But even small steps now can make a significant difference down the line. In this blog, we’ll explore how much nurses should contribute to retirement, highlight your plan options, and include specific considerations for your profession. đź©ş It is important to take care of yourself financially, so that your finances don’t add to the daily stress.
Why Retirement Planning Matters for Nurses
Your job is demanding, with irregular schedules, high stress, and constant change. That’s all the more reason to plan ahead for retirement.
- Starting early, even with just 1 to 2 percent of each paycheck, allows your savings to grow over time through compound interest. Even just $10 a week, the amount many spend on coffee, can grow to more than $70,000 over 40 years if invested consistently.
- Many nurses shift to part-time or reduced hours later in their careers. A strong retirement fund offers flexibility.
- Nurses often face burnout, and having a financial cushion makes early or phased retirement more realistic.
How Much Should Nurses Contribute?
Here are general savings benchmarks that apply well to nurses.
- Begin with your employer match. If your workplace offers a 3 to 5 percent match, contribute at least that amount.
- Aim for 10 to 15 percent total contributions, including employer match.
- Start small and increase yearly. Many plans allow automatic increases. A raise or certification bonus is a great time to boost contributions.
Which Retirement Plans Are Available to Nurses?
Most nurses have access to these options through employers.
- 403(b): Offered by nonprofit hospitals, schools, and healthcare organizations. Similar to a 401(k), this plan is common for nurses.
- 401(k) or Roth 401(k): Found in private hospitals and clinics. Choose based on whether you prefer to pay taxes now or in retirement.
- Traditional or Roth IRA: Use these in addition to your workplace plan or if you’re self-employed or doing per diem work.
Roth vs. Traditional: What Should Nurses Choose?
Roth accounts involve paying taxes when you contribute. Your withdrawals in retirement are tax-free. This can be beneficial if you expect your tax rate to be higher in the future or want flexibility in retirement.
Traditional accounts involve contributing pre-tax money. You’ll pay taxes when you withdraw. This is helpful if you want to lower your taxable income today.
For example, if you’re a younger nurse just starting out, a Roth IRA or Roth 401(k) may make more sense. If you’re mid-career and want a tax break now, traditional contributions may be the better route.
How Nurses Can Stay on Track
- Automate contributions so you never forget.
- Use any planning tools your employer provides to track progress.
- Review your plan once a year, especially after major life or income changes.
- Consider speaking with a financial advisor. Many workplace plans include access at no extra cost.
Nurse-Specific Retirement Considerations
- Health Savings Accounts (HSAs)
If your workplace offers one, consider using it to grow savings for healthcare expenses in retirement. HSAs have tax advantages and can function like a retirement account. - Insurance and Long-Term Care Planning
Nurses understand the risks of long-term health issues. Planning for additional health or disability insurance can protect your savings. - Rising Healthcare Costs
Medical expenses increase faster than other costs. Factor this into your retirement planning, especially if you plan to retire before qualifying for Medicare. - Flexible Retirement Paths
Many nurses move into per diem, travel, or part-time roles as they approach retirement. Choose retirement accounts that allow continued contributions during these shifts. - Avoiding Burnout
Long-term financial planning reduces the pressure to pick up extra shifts or stay in a role that’s no longer sustainable. Having savings means more options.
How Salarly Can Support Retirement Planning for Nurses
If high-interest debt is keeping you from saving, Salarly can help. With payroll linked loans, you can pay off debt more predictably and free up space in your budget to focus on the future.
Borrowing through Salarly means repayments are automatically deducted from your paycheck, which removes stress and helps you plan more confidently. Whether you’re contributing 1 percent now or working toward 15 percent later, the most important thing is to begin. With a bit of structure and the right tools, your retirement plan can evolve with your nursing career.
FAQs: Retirement Planning for Nurses and Salarly
How much should I save for retirement if I’m just starting out?
Start with what you can. Even 1% or 2% of your paycheck makes a difference, especially if your employer offers a match. If finances are an issue, look for simple, fast, trustworthy and online solutions at Salarly.
What’s the difference between a 401(k) and a Roth 401(k)?
A 401(k) uses pre-tax income and is taxed when you withdraw. A Roth 401(k) uses after-tax income and withdrawals are tax-free.
Can I have a 401(k) and an IRA?
Yes! You can contribute to both, though income limits apply for tax-deductible IRA contributions if you also have a 401(k).
What if I need to pause my contributions?
That’s okay—just don’t stop forever. Resume as soon as you can and consider gradually increasing over time. Leverage tools, such as Salarly’s payroll linked loans, to help you get back on track with your financial wellness journey.
Does Salarly offer retirement planning tools?
Salarly doesn’t manage retirement plans, but we can help free up income for savings by offering streamlined payroll linked loans that keep your finances steady!
