Registered Nurse's Guide To Retirement

More than one in four registered nurses plan to retire or leave the profession within five years, according to the 2022 National Nursing Workforce Study. Whether you're close to retirement or early in your career, plan ahead. Understanding your savings options, pensions, and employer benefits is what sets up financial freedom later.

When to Start Saving

As soon as possible. The earlier you start, the longer your money compounds and the more options you have when you stop working. That said, it's never too late. At every career stage, know what your employer or union offers and contribute what you can.

Setting Savings Goals

Financial planner Jim Crider frames it as a series of tradeoffs: "Everything in life requires a decision, mandates tradeoffs, and has an opportunity cost. If you choose one thing, you are, intentionally or unintentionally, giving up another."

Crider suggests saving 10% to 15% of your gross monthly income, based on an average retirement age near 65 and average lifestyle goals. That's a rule of thumb. Your real number depends on your current expenses, spending habits, family obligations, and the lifestyle you want. Factor in other future income too, such as Social Security, trusts, or other savings accounts, and learn the contribution rules for any plan your employer or union offers.

Choosing a Retirement Plan

Nurse compensation is more than salary. As of March 2023, 91% of RNs received employer retirement benefits, compared with 73% of workers in other fields, according to the U.S. Bureau of Labor Statistics.

The range of options can be overwhelming. "There are loads of types of investing accounts available, and keeping up with what they are, let alone which one to use, can be overwhelming," Crider says. When you choose, weigh three things: whether your employer matches contributions, what you intend to use the money for, and the plan's tax treatment. Note that some accounts penalize withdrawals before age 59.5. Your HR department can spell out the specific options and matching policies.

Pensions for Nurses

Traditional pensions, which guarantee fixed retirement income, have grown rare in the private sector. Family wealth executive Robert Riedl ties this to cost cutting: "Pension plans are going away because the employer liability and cost of funding a future defined pension payment plan for employees is more expensive than just funding a current year retirement contribution."

Pensions remain common for nurses at state or federal agencies and large healthcare organizations, and union nurses may participate in a negotiated pension fund. A pension with employer matching is an easy way to start saving, but don't count on it alone. As planner Melissa Ann Cox notes, the benefit "is based on a myriad of factors, including the employee's age, years of service, and salary while employed." Always layer in other investments or income sources.

Pensions carry real limits. Many don't adjust for inflation. Some state-system employers offer a pension in place of Social Security, which can reduce or replace your Social Security benefits unless you meet specific qualifications. And unlike traditional or Roth IRAs, some pensions offer no survivor benefit to pass funds to a beneficiary.

Budgeting for Retirement

All three advisors interviewed for this guide stress building a budget that reflects your current priorities but stays flexible. For many nurses, retirement saving competes with student loans and daily expenses. Get on track by separating fixed costs (loan payments, housing, food) from variable ones (dining out, hobbies, clothes), then tracking what you actually spend. Once you see the real numbers, you can decide how much to route toward retirement. All three advisors agree on the value of a financial professional who can explain your options and adjust the plan as your needs change.

FAQ: Nursing Retirement

What's the best retirement plan for nurses?

It depends on your employer's benefits. An employer match jumpstarts your savings, and a pension is another solid foundation when one is available.

When do most people retire?

Americans retire at age 62 on average, according to a 2024 MassMutual survey. Some nurses retire earlier, which is one more reason to start planning now.

Do RNs get retirement benefits?

Most do. In 2023, 91% of RNs received employer-sponsored retirement benefits, compared with 73% of all workers, per the Bureau of Labor Statistics.

What's the average nurse pension?

It varies by plan and years of service. Nurses with a pension can still supplement it with other accounts, such as a Roth IRA.