With careers full of complicated calculations and split-second decisions, nurses often don’t want to tackle the complexities of financial planning in their spare time. But like physical health, financial health is essential to a secure and comfortable future. A 2011 Fidelity Investments Nurses Study revealed that although 79% of nurses interviewed feel secure in their jobs and their financial futures, 71% do not think they are saving enough to fund their retirements.1

Like any skill, financial planning takes time and effort. “In health care, we speak healthcare and others don’t understand it,” says Cassandra Chandler, the RN Money Coach and author of The Retirement Game for Nurses. “Finance is a whole other language, too.”

For many nurses, tackling financial issues is one more thing on a long to-do list. “It can be so complicated,” says Jorge Prada, RN, an obstetrics nurse in New York City. “The jobs are so draining and so tiring and you don’t have time for that. But financial health is very important.”

And for some minority populations, simply talking about financial matters can be a challenge. If money and investing were not topics of conversation growing up, it can be difficult to overcome the barriers to discussing something many see as very personal, says Lee Baker, a certified financial planner and founder of Apex Financial Services, Inc., in Tucker, Georgia. “When talking to clients who are minorities, the issue you have a lot of times is the comfort level,” he says. People are often more comfortable discussing just about anything except their finances, he says, especially if they are unfamiliar with the terms and concepts.

But just like health issues, it only helps to overcome the hesitation and look at the big picture. You can make some big mistakes without a solid financial plan, and doing nothing at all is one of the biggest. “You have to know what you have, and you have to know what you need,” says Chandler, who recommends envisioning what you want from your retirement. “It takes a little work.”

Baker notes that one person’s idea of retirement may not be the same as what is often portrayed as ideal. “There are things that are seen as ‘normal’ in the US that don’t resonate culturally with everyone,” says Baker. For many cultures, the typical image of a carefree retirement is not something that matches their desires. “For some, that imagery comes across as being selfish,” he says, because they prefer to help family members. “Don’t assume what you see applies to you.”

So it is essential to differentiate what you want to do from what society expects you to do when you retire. Think about what you want to accomplish in the near future and in later years. Now answer the following questions:

  • What does retirement mean to you?
  • Are you planning to return to school?
  • Will you be helping children pay for college?
  • Do you want to travel?
  • Do you want to move somewhere else?
  • Do you want to be mortgage-free?
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Once you identify personal goals, you need to accurately estimate how much you will need and decide how to fund those plans. “It is worth it to make sure you are saving enough,” says retirement expert Robert Brokamp, Editor of The Motley Fool’s Rule Your Retirement newsletter and author of several books on financial health. “Seventy-five percent of people approaching retirement have less than $30,000 saved.” And there is no backup plan for retirement. “If you do not have enough when you reach retirement, you cannot get a loan,” says Brokamp.

What makes financial planning so daunting? For starters, your financial needs fluctuate constantly and different cultures have varied priorities. A 2012 Retirement Report commissioned by the ING Retirement Research Institute showed differences in the ways minorities approach financial planning and retirement goals. Of the 4,050 respondents (including 500 African Americans, 500 Hispanics, and 350 Asian Americans), only 29% said they have a formal investment plan, but African Americans reported being most likely to have one at 32%. And respondents reported that life’s roadblocks such as debt (for African Americans) or lack of information (for Hispanics) stood in their way of saving enough.

That lack of planning shows in the end. While the Retirement Report showed only one in four Asian Americans have one month or less of savings for an emergency fund, 47% of Hispanics and 50% of African Americans reported having no emergency fund at all. But African American respondents have larger life insurance policies, and 70% of them indicated they are likely to leave the proceeds to their heirs (versus 53% of the total respondents).

It helps to realize that each life stage requires a flexible approach. For recent graduates, student loan payments and day-to-day expenses can eat up a big chunk of your salary. But as life progresses, a mortgage, children, additional schooling, or even caring for aging parents will change your financial outlook.

So where do you start? Decide if you want to do everything yourself or hire someone to help you. Either choice requires familiarity with some financial planning basics. “You have to know enough to know whether you are getting good advice,” says Brokamp. “Money is boring [and] complicated, but we spend the majority of our waking hours making money, so it is worth it.”

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Familiarizing yourself with the lingo will make you more comfortable talking about finances, advises Cindy Hounsell, JD, President of the Women’s Institute for a Secure Retirement (WISER). Her organization pairs with the American Nurses Association to offer classes in which nurse educators teach nurses about financial planning and investing. The classes offer sound advice from trusted leaders, says Hounsell.

A 2008 WISER survey revealed that only about 6% of nurses thought they had a strong grasp of financial planning issues, but nearly all thought understanding the information was important.2 These classes offer a place to begin. “[Nurses] need to know to start and to not give up,” says Hounsell. “If you don’t start, that puts you in trouble.”

If you choose to do everything yourself, you should plan to devote at least one weekend annually to financial matters. Examine all your accounts, benefits, and insurance to make sure everything is up to date including beneficiaries. Use Quicken or Excel to track details such as goals, account numbers, amounts, and relevant dates. Creating an organized and effective plan requires only basic methods, says Brokamp.

If you choose to hire help, a fee-based planner is a great place to start. Fee-based planners do not work on commission so they stand nothing to gain by recommending anything. By paying the adviser for time instead of products, any conflict of interest is removed.

Nurses, who are used to doing everything themselves, can find it tough to hire a financial planner, and they want someone they trust. But if you are not making progress on your own, hiring someone will help. “Nurses are very good at taking care of people,” says Prada, who hires financial help. “And there are people who are good at taking care of money. You have to give them credit for that. They can give you advice you have never heard before.”

While there are many ways to save money, through individual accounts such as an Individual Retirement Account (IRA), an employer-sponsored 401(k) or 403(b), or a personal savings account, it all requires the money getting there. Everyone would like to deposit large amounts, but don’t be discouraged if you can only save $10 a week. It will add up. Have it automatically deposited each week or each month so you do not even see it.

No matter which type of account you have, all experts agree that it’s necessary to have an emergency fund so you can pay your bills during financially tight times. Plan to tuck away 3 to 6 months’ worth of your income into an easily accessible fund like a CD for this purpose. However, if your income fluctuates or if there is a chance you could have difficulty securing a job if you are laid off, you need to have a larger emergency fund.

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Save for Retirement Before All Else

Nurses have to change the way they view retirement savings. While you might think that funding a child’s education should come before saving for retirement, it should never come first—and that is for the benefit of your children as well. Your retirement affects your quality of life. You can always receive a loan or have your child apply for scholarships and grants to help fund higher education, but banks won’t help you stretch your retirement funds when you fall short. And if you do not save enough, you might become a financial burden to the very children you were helping out financially years ago. Making retirement savings a priority will protect your children from having to support you later.

For retirement, many nurses use a company 403(b) plan (not-for-profit institutions) or a 401(k) plan (for-profit institutions) to save. With 2012 maximum contributions set at $17,000 annually for 401(k) or 403(b) accounts and $5,000 for an IRA, the amounts are significant. But if you work as a contractor, you can still investigate individual 401(k) plans. These will let you put away more money than a traditional plan to make up for the lack of employer-matched funds.

Target retirement funds, which are based on your estimated retirement year, are gaining in popularity as well, says Brokamp. Fund companies like Vanguard, for instance, allocate your funds into a mix of options that change in risk as your retirement nears. “It is easy,” says Brokamp of target funds, but not fool proof. The funds are not a magic potion for savings. You still have to calculate how much you are saving and make sure you will have enough when you retire. But for the person looking for a one-stop option, he says, this concept is worth considering.

How do you know if you will have enough to retire when you want? There are many retirement calculators on the Internet that are easy to use, and you can also pay a fee-only consultant to help you. Expect to pay somewhere around $200 for the service, but consider it money well spent.

Benefits Are More Than Just Perks

Salary is often a big motivator for changing jobs, but take the time to weigh the benefits package as well. Consider the options in dollar amounts, not as perks. For nurses who appreciate the flexibility of moving in and out of the workplace in many capacities, job benefits can make a big difference in retirement savings. Many young nurses change jobs to find the right career fit. “It can be good for a career, but bad for financial planning,” says Mary Aleksiewicz, recently retired Vice President of Nursing at Fairlawn Rehabilitation Hospital in Worcester, Massachusetts. Employer-sponsored matching programs could potentially add thousands of dollars to the total benefits package. “If you don’t add to that, you are throwing money away,” says Aleksiewicz.

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If you work on a contract basis that offers a higher hourly rate but no benefits, you have to put extra money aside for retirement because you have no employer-matching options. “Benefits include retirement,” says Teresa Haller, RN, MSN, MBA, NEA-BC, of patient care services at the University of Virginia Health System. “So [contract work] comes at a cost.”

At the very least, a job should have a retirement plan and decent health insurance. Many companies offer several kinds of insurance as well. Short-term or long-term disability and life insurance will help keep your family financially secure if anything happens to you. Some employers will even provide opportunities to speak with financial planners or with lawyers who can draft a simple will, a service that can be worth hundreds of dollars and is invaluable to your family’s financial health.

Haller says nurses must know what benefits are left behind at each job as well. “When nurses leave, they lose track of what might be coming to them,” she says. “They may be eligible for benefits from their employers if they worked there long enough.”

If you are a recent graduate, begin tracking retirement benefits from each employer. Or if you are several years into your career and do not have this information, call any previous employers’ benefits office and ask them to look it up. Then remember to call them when you retire, says Haller, because they are not going to call you.

How Can You Save?

You know the basics, but just how can you put enough money away? The younger you are, the easier it is to save, say many experts. But for young nurses, just paying off loans and possibly gaining a mortgage or paying rent makes it tough to save anything. But the sooner you start, even with a small amount, the more likely you are to reach a comfortable retirement goal. And for women especially, the importance of saving enough cannot be overstated. “Minority women tend to fall into that spot of women living in poverty later in life,” says Haller, noting that single minority women are most at risk in older age.

“Budget based on your salary, and not on overtime and your total salary,” recommends Jose Alejandro, PhD(c), RN-BC, MBA, CCM, FACHE, President of the National Association of Hispanic Nurses. Nurses can run into financial trouble when overtime stops and they have become dependent on that income to live. And Alejandro knows what happens when nurses neglect retirement plans. “I have seen nurses who would love to retire but cannot,” says Alejandro. In fact, the 2011 Fidelity study revealed that 42% of nurses believe they will never fully retire, primarily because they think they will need the money for living expenses. “One thing I always tell students who are graduating is that your first meeting should be with a financial planner,” says Alejandro. “And then start putting something away.”

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Experienced nurses who know the value of retirement savings or even those who have learned the hard way are often great resources for colleagues. Monica Garcia, MSN, RN, FNP, who works in student health services at the University of California at San Diego, says the sage advice she received as a young nurse made a huge impact. “When I first started nursing, I didn’t even think about [saving],” she says. “Luckily, I worked with a nurse who asked me if I was contributing to my 401(k).” Her colleague encouraged her to save anything at all, even if it amounted to just 2% of her income.

When Garcia went back to grad school, she continued to contribute to her retirement, but the amount was minimal. Now she is playing catch up, she says, adding more to the funds to make up for the lean years. And Garcia, who has always worked as a full-time nurse, takes on per diem jobs to help fund extras such as travel. The extra money is not part of her normal budget but helps her keep a lifestyle she wants. And it might just be a good option for you if you want a similar lifestyle.

Financial health is not just socking away money and paying off debt. It really is about your life plan.

Prada agrees: “Financial freedom is about what is important to you.”

Julia Quinn-Szcesuil is a freelance writer based in Bolton, Massachusetts.


  1. Fidelity Investments, “Fidelity® Survey Finds Nurses Feeling Secure About Their Jobs, But Many Reveal Economy Has Impacted Their Retirement Plans,” (2011). Accessed 2012.
  2. J. Osborne, “Final Report: Nurse Investor Education Survey, A Joint Project of the Center for American Nurses and WISER, the Women’s Institute for a Secure Retirement,” (2009). Accessed 2012. www.wiserwomen.org/images/imagefiles/wiserNurseSurvey.single%20page%20la….

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