Are you ready to get your retirement plans in order? Even the most motivated nurse will find a few roadblocks when planning for retirement, but never let those roadblocks detract you from your goal. Trying to determine how much money you’ll need to live years or decades down the road can seem like an impossible task. And even if you’re putting some money away, you might wonder if it’s going to be enough.
According to Elliot Dole, CFP®, EA, AEP®, CExP™, CAP®, a Wealth Advisor with Buckingham Strategic Wealth, there’s plenty nurses can do to ensure they are on a good track for retirement planning and savings.
One of the easiest options is to use any employer-provided retirement benefits such as contributions, matching funds or even free financial advice from professionals as an employee benefit. Using pre-tax benefits or options like a Health Savings Account can save you tax dollars and help pay for healthcare-related costs. Ideally, every salary increase or bonus will be rolled into your savings process as well. These kinds of small steps will help your nest egg grow quickly without feeling too much of a pinch in your wallet.
But it helps to have an idea of how much you’re going to need for retirement, rather than just saving money and hoping for the best.
According to Dole, nurses can ask some hard questions to determine how much is enough to retire. Looking at the end, rather than the current day, will give you a more accurate frame of reference.
As no two people feel the same about retirement, you’ll need to decide what retirement means for you. Think about these questions:
- What is most important–retirement date or retirement spending?
- What retirement activities are important to you?
- Do you plan to retire in a different location? Do you know where?
- Do you see yourself working at other jobs past your official retirement?
- When do you plan to begin Social Security?
As you ask those questions, you’ll be able to narrow down the amounts you’ll need to have the retirement you want. Consider these questions to give you a starting point:
- How much do you want to be able to spend in retirement?
- How much do you want to leave to loved ones or charity when you’re gone?
- What gap exists between monthly social security, pension, or other retirement income that needs to be funded by your retirement portfolio?
- What are the odds of success given your current and future savings and expected investment returns?
- How does a spouse’s or partner’s financial circumstances factor into this?
It also is important to examine the emotions that surround retirement planning, he says. It’s easy to feel discouraged if you aren’t on track for saving enough. But until you know the real amounts you’re working with, you could be unnecessarily stressed (or, alternately, feeling relief that’s not based in reality).
Because the nursing industry offers varied employment options, nurses who work part time or on a per-diem basis might not have the same benefits available to them as full-time employees. “Nurses on a per diem basis may benefit from establishing IRAs and Individual 401(k)s,” says Dole.
Working with a professional can help you establish a solid foundation to build on and will continue your financial education so you can work in partnership on your retirement plan. Continue to learn more by reading, listening to financial podcasts, or taking classes in personal financial management. Remember that while retirement planning takes effort, once you’ve established how much you want to save and you’ve started a plan to get there, your work will decrease.
“The key is to get good strategic help related to your unique circumstances and goals,” says Dole. “Then live your life and let your plan work for you.”