Nurses’–now and future–financial needs

Study gains insights into nurses’ overall confidence and outlook towards retirement.
By Melanie Wolkoff Wachsman

When it comes to nurses and retirement there’s both good news and bad news. The good news is that one quarter (26 percent) of all nurses with a workplace retirement savings plan have accumulated more than $100,000 in assets, up from 18 percent in 2011.

The bad news is that savings rates, especially among younger generations are less than optimal. For example, Fidelity Investments recommends employees save 10 to 15 percent of their salaries from both employer and employee savings. A new online study conducted by Versta Research on behalf of Fidelity Investments showed that Gen Y and Gen X nurses are saving a median of 5 percent and 6 percent, respectively, compared to Boomers who are saving 10 percent.

The 2013 Fidelity Investments Nurses Retirement Study, which was designed to gain insights into nurses’ overall financial confidence and outlook towards retirement, surveyed 536 practicing U.S. nurses. Most of the nurses surveyed (62 percent) were employed by not-for-profit organizations; 38 percent of nurses are employed by for-profit organizations. Four out of five (80 percent) were fulltime. The average (median) tenure with employers was seven years.

No Participation

Despite the fact that nine in ten nurses report having a workplace retirement savings plan available to them, whether it is a 401 (K), 403 (b) or similar plan, 15 percent of nurses are not participating in workplace retirement plans. For those who have plans available to them, this represents a lost opportunity to save and qualify for the company match offered by many healthcare institutions.

Among those not participating in their workplace retirement savings plans, inertia and needing help figuring out how to begin are as important as not having enough money. Other reasons include:
• Don’t have enough funds to save (32 percent)
• Already save in other ways (29 percent)
• Have not gotten around to it (29 percent)
• Don’t know where or how to begin (22 percent)
• Overwhelmed by the amount needed (15 percent)

In addition to any workplace retirement benefits available to them, just more than half of the nurses surveyed are saving for retirement through an IRA—a number that has not changed significantly since the first nurses’ survey in 2007.

Further, less than one-half of nurses (44 percent) believe they will never fully retire. Six out of ten will continue to work, in part, because they need the health insurance.

Worries about Industry and G
overnment Changes
The study also revealed that many nurses worry about industry and government changes that are outside of their control, including consolidation and reduced benefits. Four in ten nurses (42 percent) have experienced a consolidation (merger or acquisition of their employer), up from 29 percent two years ago. One-half anticipate more hospital consolidation over the next five to ten years (up from 39 percent) two years ago.

In regard to the impact on their jobs, nurses report negative outcomes caused by consolidation by a ratio of four to one. These include more stress, lower morale, fewer staff and cuts to benefits.

What do nurses anticipate as adjustments to their profession specifically from healthcare changes? Again, more than anything else, they see more work, more stress, fewer available nurses and lower levels of care. When it comes to changes that will most affect them personally, nurses focus on stress, reduced benefits and increased responsibilities.

Gen X Nurses Concerned about
Retirement Security
Gen X nurses express the strongest concerns about their financial future in retirement, and Boomers express the least. More than half of Gen X (55 percent) and 48 percent of Gen Y are not confident they will have enough money to retire, compared to 55 percent of Boomers. Further, more 76 percent of Gen X nurses are concerned they will never be able to retire compared to 53 percent of Boomers.

Roughly one in five (19 percent) nurses expect Social Security to be their primary source of retirement income. Gen Y and Gen X nurses put less faith in the program, with only 8 percent and 16 percent, respectively citing Social Security as primary source.


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number of nurses who report having a defined benefit pension plan has dropped from 48 percent in 2011 to 39 percent in 2013. Among Boomer nurses, 44 percent have access to a defined benefit plan. Similarly, the numbers who expect to rely primarily on a defined benefit pension plan for retirement income is down from 18 percent six years ago to 7 percent in 2013.

Relying on Employer Resources
Bottom-line 62 percent of nurses acknowledge that they are not saving enough for retirement. A majority of nurses admit needing more help planning financially for retirement, especially Gen Y and Gen X nurses.

However, needing help does not always lead to action. Among those who say they are not saving enough, just one in four (27 percent) will seek retirement planning and guidance over the next 12 months to help them save more.

When it comes to tools and resources that nurses use to learn about and manage their workplace retirement plans, one-third (34 percent) say that they rely on educational resources from their employers. Among the employer resources that nurses find most helpful are individual in-person meetings and mailed materials. Individual consultations, either in-person or by phone, are increasingly important.

Beyond one-on-one employer resources, nurses increasingly look to general online resources and family for help:
Online tools (relied on by 40 percent, up from 31 percent in 2011).
Family and friends (relied on by 41 percent, up from 31 percent in 2011).
Online educational sites (relied on by 32 percent, up from 23 percent in 2011).
Financial publications (relied on by 16 percent).