As a nurse, you come home from working your 3rd 12-hour shift in a row. You’re tired. You feel like you haven’t sat down in days. The shift never slowed down.
When you finally get home, the last thing on your mind is planning for your retirement.
Being a nurse is both physically and mentally challenging. You’re constantly on your feet and doing a lot of lifting or assisting patients. Most nurses find it hard to envision themselves doing all of this as they get older.
This is exactly why you should be thinking about your retirement.
There is no better time than right now. The more proactive you are with your retirement, the better off you’ll be. Here is your 5 step guide to start your retirement planning.
1. Understand What Retirement Plans Are Available To You
You chose to be a nurse for a reason. Helping people is what you’re passionate about. Most likely, the thought of financial and retirement planning stresses you out simply because its foreign territory from your medical background.
But don’t let unfamiliarity cause you to neglect or procrastinate it. Educating yourself and understanding your options is a great first step. Does your hospital or medical office offer a 401k, 403b, pension plan etc.? Figure out what type of benefits you have, the investment options and how to enroll or participate in it. Gaining this understanding will provide the clarity you need to begin.
2. Changed Hospitals? Here’s what to do!
One of the greatest aspects of the nursing field is the transfer ability of skills. Nurses are needed every where, giving you the option to relocate or change employers throughout your career. If you have transitioned to a different hospital and left a retirement plan behind, you may be wondering what to do. Consolidating or rolling over old, inactive retirement plans provides benefits to you.
First, its much less complicated to have your retirement located in a few accounts versus five or eight. We could all use some simplicity in life.
Secondly, if you only worked for an employer for a short period of time, it’s likely you didn’t accumulate a large retirement savings. Combining and consolidating your retirement funds allows your money to work together better for you. The “snow balling” effect magnitude increases when your money is working together.
Lastly, if you’re not impressed by the investment choices available in your previous company’s plan, roll over old retirement plans into a personal retirement plan. This gives you and your investment advisor the ability to choose what funds your money is invested in.
Before doing any of this, be mindful that there are legal restrictions with rollovers. It is always best to consult your financial advisor to discuss your options.
3. Understand Your Pension Benefits
Defined benefit plans like pensions are becoming less common. Employers are offering other retirement benefits like a 401k instead. However, if you are fortunate enough to have a pension benefit, make sure you understand it. Understanding the logistics of a pension and payout options will be crucial in determining retirement income.
This benefit will be an additional source of income that is separate from your personal retirement savings and other company plans. Because pensions have many different details, consult your benefits department or financial advisor to help you do this.
4. Make the Most of Your Income Stream
Nurses typically earn a good living, especially in WNY. Take advantage of this by making the most of your income stream. Build outside savings in an investment account by working an overtime or extra shift each month. Putting that additional income into an open investment account will help build your savings outside of your retirement plan.
Set this money aside with the intention of investing it to earn interest and grow. This allows you to continue to contribute to your retirement plan through your payroll deductions, while still feeling comfortable that you have savings not tied up in a retirement account.
For example, if a medical emergency arrives, you will have money set aside that doesn’t incur the significant withdrawal penalties that retirement plans do. Best case scenario, you leave that money alone and allow it to grow into a nice savings nest that can be carried with you into retirement.
5. Don’t Go At It Alone
Retirement and financial planning can be far from the anatomy and physiology you studied in college. Just as it is unwise to self diagnose and treat yourself, don’t go at this alone. Reach out to your HR department and see what resources are available to you. They may have online education or individuals specifically appointed to answer any questions you may have about retirement benefits.
Or, better yet, consider using a financial advisor if you haven’t already. Financial advisors can take a look at your entire financial picture, needs and goals to guide you into retirement confidently. A financial plan that is unique to you and your specific situation is important. They will also be able to help clarify any investment related questions and “How much should I contribute?” questions.
Whatever you decide, the most important part about retirement planning is to start. The sooner you can begin to save, the more time you have to let money grow. If you don’t start at all, you could be risking your retirement.
If you’d like help with your retirement plans or are looking for clarity, give us a call at 716-662-4470. We’ve helped many nurses in the Buffalo, WNY area already and would love to do the same for you!
Chelsea Maderer is a Financial, Investment and Tax Advisor in the Buffalo-WNY region. She helps individuals and families to Clarify their needs and goals, Solve their problems, and Simplify their life to avoid the common mistakes that get in the way of enjoying life and retirement.
For more information please visit: http://SFTAweb.com.