Saving for Retirement: Options for Travel Nurses to Consider
Written by Rose Torrento on Thursday, April 22, 2021 Posted in Education & Career Advancement
These days, it can seem difficult to scrape by on monthly expenses, let alone put anything away for the future. Fortunately, travel nurses have the benefit of being in demand, which not only equates to job security but also tends to mean more competitive pay. If you’re earning a few extra dollars each month and want to do something beneficial with it, it’s time to start looking at retirement options. The earlier you start saving, the more you’ll have when you hang up your scrubs for good someday.
Start thinking about retirement now
Most people know that saving for retirement is important, but it’s easier said than done. Even though you might have uses for that extra cash now, saving it in a retirement fund will help you solidify a comfortable future.
Younger travel nurses, especially, should begin planning for retirement as soon as possible. Saving early ultimately means having that much more money down the road thanks to compound interest. You might be working for the next 30 years of your life, but you need to plan now to ensure you enjoy the years after that!
Explore your retirement saving options
There are plenty of options when it comes to investing for retirement. Some plans might be accessible to you through your travel nursing agency, while others require pursuit on your own. Here are just a few of the main choices for travel nurses:
- Traditional 401(k): Many travel nurse agencies offer employer-sponsored traditional 401(k) plans. The contributions you make to this plan are tax-deferred, meaning you don’t pay taxes on the funds until you withdraw them in retirement. This reduces your taxable income each year you contribute. 401(k)s generally have a higher annual contribution limit compared to other plan types. Additionally, some employers will offer a matching contribution benefit — taking advantage of this benefit essentially gives you “free money” and could greatly increase your savings.
- Traditional IRA: Individual retirement accounts (IRAs) are retirement savings plans you can set up on your own, without an employer. The contribution limits for IRAs tend to be lower than 401(k)s. A traditional IRA is similar to a traditional 401(k) — you make tax-deferred contributions to the account and pay taxes when you withdraw in retirement.
- Roth IRA: A Roth IRA is similar to a traditional IRA. However, this account allows you to contribute after-tax dollars now and enjoy tax-free withdrawals later. IRAs also offer a wide range of investment options.
Make a retirement savings plan and stick with it
The best way to save for retirement as a travel nurse is to build contributions into your monthly budget and stick with it. Calculate how much you should be saving each month to secure your financial future.
You might feel as though your money is better used immediately or saved in a different account, but remember that retirement accounts offer immense returns on investment. Your account will generate compounding interest as it’s invested, meaning you should end up with much more money than you put in.
As a travel nurse, you work hard and have a demanding job. You deserve to have something for yourself when it’s time to retire. Planning now will ensure financial security for future you!
About the Author
Rosemarie Torrento has worked in health care for more than 26 years, beginning as a registered nurse in 1988. Early in her nursing career, Torrento worked as a freelance contract nurse before accepting a position in nursing administration. During her 17-year tenure in that role, she oversaw nursing employment and travel nurse contracting at a Level 1 Trauma Hospital in Michigan. Understanding the challenges travel nurses faced, Torrento founded Health Providers Choice Inc. (HPC) in 2003. Through Torrento’s extensive experience and her role as President and CEO, HPC provides travel placement of registered nurses and allied health professionals to hospital systems nationally.