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Registered Nurse’s Guide to Retirement

NurseJournal Staff
Updated February 22, 2024
It’s never too early for a registered nurse to begin thinking about retirement. Check out this guide to learn about the different retirement plans available to RNs.
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Wherever you are in your nursing career, it is never too soon to start planning for retirement. Thinking about saving for retirement can be daunting, especially for RNs early in their career already dealing with student loans, housing costs, childcare expenses, and other responsibilities. However, the earlier you get started, the better your chances for achieving a healthy financial future. Read on to learn more about setting your savings goals and choosing the right retirement plan to achieve a healthy financial future.

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When Nurses Should Start Saving for Retirement

The earlier you start investing in your retirement, the more options you will have when you are ready to retire. The panel of financial advisors who spoke with NurseJournal.org, Jim Crider, Melissa Cox, and Robert Riedl, all agree that RNs should start planning and saving for retirement early in their careers, even as soon as their very first nursing job.

Many nurses regret that they did not start planning earlier for retirement. Some RNs decide to postpone retirement because of financial insecurity. Nurses who must keep working despite dealing with stress and burnout not only harm themselves but also the quality of patient care. Consequently, early retirement planning has become a profession-wide concern.

Nurses at the early stages of their careers need to take time to understand the retirement plan options available through their employers or unions. Building a solid financial nest egg, based on the compounding growth of the money you invest over the years, ensures that you can retire when you want with enough income to meet your personal needs.

How To Set Saving Goals for Retirement

When considering how much to save toward retirement, Jim Crider, a financial planner and specialist in early financial independence reminds us that “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.” Planning for retirement in your twenties or thirties may not seem like a priority, given your daily expenses and immediate priorities. However, putting aside money for retirement can easily integrate into your current financial situation and personal needs with some planning.

Crider suggests saving 10-15% of your gross monthly income toward retirement, based on average retirement age (approximately 65), and average lifestyle goals. While that figure represents a general rule of thumb, several factors influence just how much you need to start saving. Make sure to consider your current expenses and spending habits, family obligations, and what you envision for your future lifestyle options. Learn about any retirement plans offered through your employer or union and when and how much you can contribute.

When setting up your long-term financial goals, consider including other sources of income that may be available to you in the future, such as Social Security benefits, trusts, or other savings accounts. Some nurses choose to consult with a financial advisor to help determine how much to put aside toward retirement.

Choosing Between Retirement Plans

Compensation for nurses consists of more than just salaries. Employee benefits, including RN retirement plans, help recruit and keep nurses by demonstrating that healthcare companies have invested in their health and well-being. According to the Bureau of Labor Statistics Employee Benefits Survey, approximately 90% of nurses receive retirement benefits from their employees, compared to 71% of workers in other fields.

Given the variety of plans available, RNs may find it difficult to choose the best plan to fit their needs. As Crier points out, “there are loads of types of investing accounts available, and keeping up with what they are, let alone which one(s) to use can be overwhelming.”

When deciding on participating in an RN retirement plan, your top considerations should be whether your employer matches your contribution, the intended use of the savings account, and the specific tax advantages associated with the plan. Additionally, some types of retirement accounts do not allow early access or will charge you a penalty if you need to withdraw funds before you reach the age of 59 and a half.

Retirement Plans
Retirement PlanPro(s)Con(s)
401k and 403b

Employers often match your contributions as part of your employment package.

Most employers set up contributions automatically deducted from your paycheck.

You have no control over how the plan determines investment and distribution rules.

You may only make contributions through your employer after working for a specific period of time.

You will have to pay a penalty if you access your funds early.

Roth IRAs

Because these plans are not governed by employer rules, you can make contributions anytime and choose where to hold the account and what kinds of investments to include.

You can withdraw your initial contribution anytime, without taxes or penalties.

The maximum contribution is lower than for the 401K or 403b.

Withdrawals beyond the initial contribution before the age of 59 1/2 may be subject to taxes and penalties.

Traditional IRAs

Traditional IRAs are tax-deferred retirement plans that you control, independent of your employer, similar to Roth IRAs.

You receive a tax deduction on your contributions every year.

These plans have contribution limits, usually $6,000 per year, or $7,000 if 55 or older.

You will have to pay a 10% early withdrawal penalty in addition to income tax if you take out funds before the age of 59 1/2.


Health Savings Accounts are not subject to income tax and earnings in the account grow tax-free.

Unspent funds roll over at the end of the year, available for future healthcare expenses.

You must carry a high-deductible healthcare plan to qualify for an HSA which may lead to a financial burden if you face an expensive medical procedure.

You will have to pay a 20% early withdrawal penalty in addition to income tax if you take out funds before the age of 65. After 65, you still must pay taxes but not the penalty.


Pensions guarantee payments throughout your life after retirement, without having to use up your other savings.

Most employers deduct your pension contribution before deducting taxes, giving you a tax break.

You cannot begin withdrawing money until retirement age.

Inflation may outpace your fixed pension income.

Types of Pension Retirement for Nurses

Traditional defined-benefit pension plans that guarantee a fixed income in retirement have become less common for nurses employed in the private sector. Robert Riedl, a family wealth management executive, attributes the demise of nursing pensions to cost-saving efforts by employers. He argues that “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 to the employee.”

Despite this trend in healthcare, pensions remain a common option for nurses employed by the state or federal government or large healthcare organizations. Nurses may become participants in their union’s pension fund if their bargaining unit has negotiated a contract with their employer. Currently, 42% of RNs participate in pension plans, especially those who work in hospitals.

Pensions with matching employer contributions provide nurses with a relatively easy way to begin saving for retirement. However, financial advisors caution against counting on your pension alone. Melissa Ann Cox, a family-oriented financial planner, reminds RNs that “the amount of the benefit is based on a myriad of factors including the employee’s age, years of service, and salary while employed.” As a rule, nurses should always include other kinds of investments or sources of income in their retirement planning.

Pension benefits may not escape the effects of inflation, since many do not adjust for increases in the cost of living. Some state-system employers offer pensions in place of paying into Social Security. In these cases, your pension reduces or entirely replaces Social Security benefits unless you meet specific qualifications. Unlike traditional or Roth IRAs, some pension plans do not offer a survivor benefit option that allows your funds to go to a family member or other designated beneficiary in the event of your death.

Budgeting Tips for Nursing Retirement Goals

All three of the NurseJournal.org financial consultants interviewed for this guide stress the importance of constructing a budget that reflects your current priorities but allows for flexibility.

For many nurses, saving for retirement takes a backseat to other pressing obligations, like paying off student loans and daily living expenses. Nurses can get on track for retirement planning by establishing a realistic budget that includes fixed expenses (e.g., loan payments, housing, food) and variable expenses (e.g., clothes, hobbies, dining out, other fun activities). Once you begin tracking your actual expenses, you can better determine how many dollars to allocate to retirement savings.

Crider, Cox, and Riedl all agree on the value of seeking advice from a financial advisor. These professionals can help you understand the options available to you and avoid obstacles so that you invest your money wisely and make accommodations as your needs change.

Frequently Asked Questions: RN Retirement Plans

What is the best retirement plan for a nurse?

No one retirement plan fits the needs of all RNs. Nurses early in their career will have different priorities than those who have worked for several years. RNs need to do their research about pensions, employer-sponsored 401k or 403b plans with matching benefits, and other independently controlled options such as Traditional or Roth IRAs.

At what age do most RNs retire?

The average retirement age for all Americans is 62, although some RNs can manage to retire in their fifties while others work well into their seventies. According to the American Association of Colleges of Nursing, 40% of RNs are over the age of 50, with a significant number planning to retire within 15 years.

Do registered nurses get retirement benefits?

RNs have access to several types of retirement plans; some they control and contribute to on their own and some administered through their employer. While 401k and 403b plans have grown in popularity along with Traditional and Roth IRAs, many nurses continue to participate in pension plans through their employer or professional associations.

What is the average pension for a nurse?

The pension benefit a nurse receives is based on several factors, including the number of years employed, contribution amounts, and how the pension has been invested. While some pensions do not pay enough to cover expected living expenses during retirement, others may provide a fixed income of thousands of dollars a month.

Related Resources

Reviewed by:

Portrait of Shrilekha Deshaies, MSN, CCRN, RN

Shrilekha Deshaies, MSN, CCRN, RN

Shri Deshaies is a nurse educator with over 20 years of experience teaching in hospital, nursing school, and community settings. Deshaies’ clinical area of expertise is critical care nursing and she is a certified critical care nurse. She has worked in various surgical ICUs throughout her career, including cardiovascular, trauma, and neurosurgery.

Shri Deshaies is a paid member of our Healthcare Review Partner Network. Learn more about our review partners here.

Page last reviewed November 28, 2021


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