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4 Critical Factors Nurses Should Consider When Thinking About Retirement

4 Critical Factors Nurses Should Consider When Thinking About Retirement

October 17, 2022

No matter how immersed you are in your nursing job amid a global pandemic, you've noticed that the economy has been on shaky ground. With uncertainties swerving around day and night, many nurses are discouraged with their current jobs and find themselves in stressful situations. Others feel pushed out by their employers because of vaccine mandates, and some are simply at retirement age.

In fact, according to the American Association of Colleges of Nursing survey, half of RNs are 50 years or older. However, retiring immediately might only be a workable choice for some nurses. Sudden retirement could lead to an even worse situation if you have yet to plan.

Here are 4-critical factors that nurses should consider when thinking about retirement:

#1 - Assessing your financial health as a nurse. 

Whether you plan to retire and relax on the beach with sandy feet kicked up or transition to a new career, you need to affirm that you are ready for this kind of move. This is done by analyzing your finances.

Here are 3-easy steps to evaluate your current financial health:

  • Determine your gross income - Gross income represents your total salary and earnings. This information is typically provided with your monthly paycheck.

  • Calculate your net income - Most of the time, your net income is calculated for you. This is the amount you take minus taxes and other deductions (like HSA, 401(k), dues, and so on). This is the amount you see on your paycheck. To establish the amount you will need annually, you should calculate your net worth for a minimum of 12 months.

  • Estimate your total monthly expenses - Your monthly expenses can be calculated by adding your fixed and flexible payments. Everyday fixed payments include insurance, rent, and loan installments. Things like food expenses, the cost of recreational activities, and credit card payments – things that tend to vary each month – are referred to as flexible expenses.

Now What?

If the difference between your annual income and expenses is a positive number, then you should move forward with pursuing a nursing retirement plan. However, remember to calculate your cash savings and retirement benefits thoughtfully before leaving the nursing profession permanently. You could also be penalized if you take out retirement funds early.

You shouldn't retire immediately if the difference between your net income and expenses remains negative for multiple months.

#2 - Estimate your nursing retirement benefits.

Assessing your current financial health is simply a part of a workable nursing retirement plan. It would help if you also estimated your retirement benefits offered by your employer, including 401(k) and 403(b), in addition to your current finances.

In addition to your current finances, you should also estimate retirement benefits offered by your employer, including pension, 401(k), and 403(b).

Your plans, such as IRA, HSA, and personal savings, could also be handy when managing your post-retirement finances. Remember that it's never too late to start saving for your future, even if you have yet to invest in a retirement plan.

Some popular retirement plans include 401(k) and 403(b), pension, individual retirement account, health savings account, and Social Security benefits.

Here's a brief summary of some popular retirement plans:

  • 401(k) and 403(b) – These retirement plans are a great way to save for retirement while you're still working. Your employer automatically deducts monthly installments from your gross salary, so it's easy and convenient! But there are some drawbacks: if you take our money before age 59 1/2 years old or withdraw over $18K in total during all periods under employment with them—you will have to pay the penalty.

  • Pension - A pension is a savings fund your employer pays over the length of your career. You don't have to settle into a pension – this is solely the employer's responsibility. When you retire, the allowance is paid out monthly.

  • Individual Retirement Account (IRA) - An individual retirement account (IRA) is a savings account that allows you to save money for your post-retirement life. An IRA gives you certain tax advantages and is governed by your bank instead of your employer.

  • Health Savings Account - A health savings account (HSA) is used to pay for qualified healthcare expenses. This offers you certain tax advantages. You can use it to cover copayments, deductibles, and coinsurance. But this is only available if you have a High Deductible Health Plan (HDHP).

  • Social Security Benefits - If you wait until retirement age, you will receive a percentage of your income, though there are limits. Make sure to estimate your Social Security payments when you retire.

#3 - Explore advanced nursing career opportunities.

If you are a nurse considering retirement, but your salary needs to be higher, you can enhance your nursing skill set and explore better career opportunities. Earning a specialty certificate and/or continuing education credits can significantly improve your chances of securing a more advanced nursing role.

Advanced specialty roles, such as a Certified Registered Nurse Anesthetist, Nursing Administrator, Nurse Practitioner, Certified Nurse-Midwife, Nurse Instructor, and other advanced practice nursing roles, receive the highest pay of nursing jobs.

Another option may be finding a job in a higher-paying region, as the average nurse salaries can vary substantially in different parts of the country. But remember to factor in the difference in the cost of living between regions to make a better-informed decision.

#4 - Post-retirement nursing jobs.

The picture of life after retirement varies from person to person. Some people have been planning to fill their post-retirement life with fun activities for years, while others don't plan for life after retirement and find themselves easily bored. Some even wish to return to work and get back to a routine.

The good news is there are industry-related job options for retired nurses, such as a nurse bill auditor, freelance nursing writer, nurse teacher or educator, and nursing licensure exams reviewer, to name a few.

Wrap Up

For nurses considering retirement can be overwhelming to think about. Leaving your current career is never easy and should be taken seriously, especially considering retirement. However, if you plan, it can certainly be a great option.

A retirement plan is more than forecasting lifetime expenses, maximizing Social Security, and building an investment strategy. It requires careful coordination of income, investment, tax, insurance, and legacy planning strategy. If any one of those components is inefficient, it's costing you money and hurting your ability to retire with confidence. And that's where Prosperity Financial Solutions can help.

We are passionate about helping nurses achieve holistic financial health through comprehensive planning. Our focus on developing genuine, personal, and enduring relationships with our clients allows us to get to know you intimately and create a customized financial plan based on your unique needs and desires.

We are an independent Wealth Management firm, which means our obligation and commitment as a fiduciary* is to protect our client's best interests, making recommendations based solely on the best fit and suitability for you and your unique situation and financial objectives. This allows us to provide tailored advice to nurses without any outside influence. This also gives us the independence to be creative with investment solutions to help nurses meet their long-term goals.

We appreciate your dedication to nursing and want you to know that we are here for you. You work daily to care for others, and it's time someone took care of you.

Book your complimentary call or appointment today if you're ready to discuss your retirement goals. We can't wait to help you plan for the future you deserve.

*Registered Investment Advisors and Investment Advisor Representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interests of our clients and to make full disclosure of any conflicts of interests, if any exist. Please refer to our firm brochure, the ADV 2A item 4, for additional information.