When Should Healthcare Workers Start Saving For Retirement?

healthcare workers saving for retirement

You may feel as though you have years before you even need to start thinking about retirement.

The truth is you need to start planning now.

As a healthcare worker, planning for retirement won’t be the most exciting thing you do all day, but it is important for your future.

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When Should a Healthcare Worker Start Retirement Planning?

Right now. Ideally, you should have started saving in your 20’s so your money has more time to grow. Ideal scenarios don’t always happen in life so the next best thing is to start saving TODAY.

If you’re reading this, it means you’re thinking about retirement.

If you’re aware enough to think about retirement, you are at a point where you can consider your retirement options and start investing.

Find a Finacial Planner!

Retirement planning can be very difficult, not to mention complicated. If you don’t want to deal with it, you need to hire a financial advisor you can trust to help guide you on the journey.

How to Manage Your Existing Debt

One of the mistakes people make is thinking they have to pay off all of their debt before they begin saving for retirement.

Depending on the amount of debt you have, that could put off retirement savings indefinitely.

You could use a plan to pay off debt in stages before retiring. You could also make a plan to pay off debt and save for retirement at the same time.

At a minimum, you should try to take advantage of any employer-sponsored retirement savings plan as soon as you are eligible.

Some employers automatically contribute. Most offer a matching contribution plan.

Strive to contribute up to the amount your employer offers to match, even if you have looming debt.

Pro-Tip
There’s no true consensus among financial experts on how to tackle something like this.

Some gurus think you should save for retirement before paying off debt, while others (like Dave Ramsey) advocate for being debt-free and then saving for retirement.

The best thing to do is find a plan (or guru) you trust and follow their system. Mixing and matching plans isn’t ideal if you don’t know what you’re doing.

Starting a Retirement Plan Early

Ideally, you should be able to start saving for retirement as soon as you’re eligible.

The earlier you start, the smaller your contributions will be. You can use a retirement calculator to determine how much you need to save in order to have the amount of retirement dollars you need.

For Example

For example, a registered nurse can expect to make about $65,000 annually beginning their first year on the job.

If the RN begins working at age 23 and they save 10 percent of their income with the plan to retire at age 72, they will have more than $3 million by the time they retire.

A 45-year-old with the same metrics would have only $500,000. That sounds like a decent amount until you consider the high cost of living in old age.

Theoretically, that $500,000 would run out after about five years. It is much better to start saving earlier if at all possible.

The Late Retirement Planner

A friend of mine decided to become a nurse when she turned 50. She already had a degree but had to return to school to become an RN.

At age 52 she had her first healthcare job and no retirement savings whatsoever. Now, 15 years later, she is happily retired. How?

My friend contributed the maximum amount available to her 401k and used catch-up contributions to increase the amount she could save.

She also maximized her IRAs each year. Notably, she has a partner who also began saving for retirement around the same time.

The two combined incomes allowed them to put aside well over $1 million in 15 years.

It is not ideal to start this late but if you have a two-income household and the ability to put aside about 1/3 of your income, you should be able to retirement with relative ease.

Key Takeaways

Saving for retirement needs to start as soon as you are able to set money aside.

Even if it is just a small amount, you will be glad you started earlier rather than later. Do you agree or disagree? Tell us in the comments!

Find a Finacial Planner!

Retirement planning can be very difficult, not to mention complicated. If you don’t want to deal with it, you need to hire a financial advisor you can trust to help guide you on the journey.

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