When Mary Beth Winkeljohn became a family nurse practitioner, she also had to navigate some big financial decisions. Part of her compensation included funds to allocate toward health insurance, disability and retirement. With help from a financial professional, she made selections that had a lasting impact on her future financial security.
Many nurses, she says, face similar choices, but might not feel prepared for them because nursing programs don’t generally include classes on business, personal finance or economics. “Nurses might be at a disadvantage when it comes to making long-term investment and financial decisions,” says Winkeljohn, who resides near Baltimore, Maryland.
That sentiment is also reflected in a recent survey of 356 nurses by Fidelity, the largest provider of workplace retirement savings plans to not-for-profit health care organizations. More than half of the nurses surveyed (56 percent) said they “lack confidence in making financial decisions,” and 4 out of 10 attributed that to having too little time to focus on their finances.
“They’re so busy taking care of everyone else except themselves,” says Kerry Sweeney, vice president at Fidelity Investments. “We want to ask them to pause and make sure they’re taking care of themselves.”
The news isn’t all bad, however. Most nurses (84 percent) are saving for their futures, and their average total savings rate, after accounting for employer matches, is 12 percent, which is close to Fidelity’s suggested 15-percent rate. (The average rate for all Americans is around 10.5 percent, according to Fidelity’s data, so nurses are doing better than average.) Most nurses invest through age-base asset allocation choices, which shift into more conservative securities as the professionals approach retirement — another smart choice.
“They are motivated to learn about financial planning, but they are just so busy,” Sweeney says. That’s why she encourages nurses to take advantages of the financial planning resources available to them through their workplaces. Even if they have just 20 minutes, they could call a financial professional available through their workplace savings plan and review their account and investment selections. The website fidelity.com/nurses is also designed to provide nurses with easy – to use – guidance.
Hospitals could make it easier for nurses by bringing in a financial advisor to work with nurses on the night shift, which often gets overlooked, says Alexandra Robbins, author of the newly-published book, “The Nurses: A Year of Secrets, Drama, and Miracles with the Heroes of the Hospital.” First-year nurses and nurses new to the facility could also benefit from the services of a hospital-assigned financial advisor, she adds. Many nurses told her they were unaware of the workplace resources that could help them manage their finances and retirement savings.
Another challenge that Robbins observed as she reported her book was the costs associated with nursing jobs. “Nurses typically have to pay for their own uniforms, which means they’re spending about $300 every six months, on top of [buying] a nursing jacket, stethoscope, nursing shoes, student loans, [and covering] gas and transportation costs. Some hospitals charge nurses to park at work while they don’t charge physicians, techs and other staff members,” she says.
Here are three more ways nurses can give their finances a boost:
Take advantage of workplace help. Contributing to a retirement account to receive any available matching benefits can help nurses achieve their retirement savings goals, as can attending any available on-site seminars or webinars about money management. The most important step is just to set aside time to check in on your finances and make any necessary adjustments, Sweeney says. Fidelity’s survey found that around 17 percent of nurses currently take advantage of in-person, phone or online guidance offered through their employer.
Prioritize retirement savings. Many hospitals have had to reduce or eliminate their retirement programs due to budgeting constraints, Winkeljohn says, and it’s hard for nurses to save more on their own. “Nurses may feel their income has to be split too many ways without enough left over for aggressive retirement contributions,” she says. Still, increasing savings by even small amounts over time can add up.
Don’t borrow against yourself. Sweeney says that according to Fidelity’s data, a rising number of people are taking out loans against their retirement, which can come with fees as well as deplete those savings. Almost 20 percent of nurses currently have an outstanding retirement account loan, Fidelity found, compared to 14 percent in 2012. “Be careful about touching your retirement savings,” she says. “It’s there for a reason.”
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A Financial Check-Up for Nurses originally appeared on usnews.com
