Saving Towards Retirement 401K/403B

Updated:   Published

Specializes in ER/ER OBs.

whats-your-retirement-plan.jpg.bf017d30bf9ba3abafae752f5de53de3.jpg

Hello! I wanted to encourage nurses to take a look at their retirement plans as I run into so many who have no interest in saving for retirement at all.  At the very minimum, save enough to get your maximum 401K/403B match.  Example: My system matches 50% up to a 6% savings rate.  A 6% saving rate will receive 3% of every dollar made for free from the health system.  A 5% saving rate would receive 2.5% of every dollar made for free.  The extra 0.5% will make a drastic difference over the course of a career because of the power of compound interest.

Also take a look at the funds that your employer's plan is putting you into.  The large financial services company my health system uses offers up a portfolio balancing services that puts the employee into an asset allocation based upon their target retirement age.  While the asset allocation % between investments is in line with conventional thinking many of the funds my money was put into had VERY high expense ratios causing me to overpay in fees for years when I had better options at much lower expense ratios(lower fees).

We work so hard for our money it's worth taking some time to educate ourselves on efficient, productive ways to save for retirement.  

3
Up Vote Up Vote ×
Specializes in ER/ER OBs.

My personal preference in funds are large index funds with low expense ratios.  This allows for diversification over an asset class (US stocks, International stocks, Total US bond market fund) at a very low cost.  Keep it simple(I prefer a 3-fund portfolio consisting primarily of Total US stocks, Total International stocks and a small % of a Total US Bond Market fund)  and keep expenses low and contribute every paycheck.  

If you max out your 401K/403B for the year ($19,500 for anyone under age 50.  $26,000 for anyone over the age of 50) start contributing to a Roth IRA.  You won't be taxed on any of the growth in your Roth IRA account when you take money out in retirement.  

The actual suggested contribution plan for maximum efficiency would be to max out your companies free match, then max out a Roth IRA account for the year ($6,000/person.  You may have a Roth IRA account in your spouses name as well allowing for a total saving of $12,000/year.).  If you prefer to keep it simple than just max out your 401K/403B each year first.

 

3
Up Vote Up Vote ×
Specializes in ER/ER OBs.

I am not a retirement professional.  I'm a nurse who loves to study retirement planning in my free time and manage my own retirement so take my advice for the unprofessional advice that it is and go educate yourself.  I'm always happy to talk personal finances with anyone interested.

2
Up Vote Up Vote ×

This is an excellent subject to bring up here. Perhaps you might ask the mods to consider moving it into the general forum for more exposure. It is retirement-related but also best aimed at nurses who are not yet retired.  I'm not near retirement but the earlier the better with this stuff!

Glad you posted.

5
Up Vote Up Vote ×
Specializes in ER/ER OBs.

Hey thank you!  

1
Up Vote Up Vote ×
Specializes in Education, FP, LNC, Forensics, ED, OB.

Hello @NurseNate1,

We moved your topic (per the request - thank you @JKL33) to the General Nursing forum for more exposure.

Great topic!

1
Up Vote Up Vote ×
Specializes in Med-Surg, NICU.

 

 

3
Up Vote Up Vote ×

I contribute 8% currently.  My employer does the same as yours.  I’m on goal to retire with the income I think I need provided nothing catastrophic happens between now and then.  You always have to think of the future.  

1
Up Vote Up Vote ×
Specializes in ER/ER OBs.
On 3/23/2021 at 9:48 AM, LovingLife123 said:

I contribute 8% currently.  My employer does the same as yours.  I’m on goal to retire with the income I think I need provided nothing catastrophic happens between now and then.  You always have to think of the future.  

Hey that's great.  What calculations do you use to decide how much income your retirement savings will generate?  I use the 4% rule which states if you take 4% of your total account out each year(adjusted up each year for inflation) your savings will last atleast 30 years.  It's a very basic calculation but I find is the most commonly used tool even among professional investors.

Up Vote Up Vote ×
Specializes in ER/ER OBs.
On 3/23/2021 at 9:20 AM, ThePrincessBride said:

 

 

This is an excellent thread.  Great info and perspective on saving for retirement.  I want to spend my late 50's and on hiking outside, not arguing with the patient seeking narcs that the doctor has cut off.  Nursing shouldn't be our life.  Family, friends and fun is life, use nursing to get there.

Up Vote Up Vote ×
+ Join the Discussion