We all know that travel nursing offers a unique career path that offers flexibility, adventure, and making difference in the healthcare industry. However, figuring out how to build financial security after retirement is important. Whether you are an independent contractor or working for a large healthcare system there are many retirement options tailored to your unique career path. In this blog, we will dive deep into different travel nurse retirement plans including 401k and more.
Top Travel Nurse Retirement Plans
Travel nursing is a unique career experience where you travel to new places, gain experience, work with diverse people, and grow personally and professionally. but when it is time to hang your scrubs it is important to make sure that you are financially secure. Sometimes it is overwhelming for travel nurses to choose their retirement plan because of the nature of their job. But no worries as there are many retirement options for travel nurses with the help of which you can achieve your financial goals. Here in this blog, we will guide you to the top retirement plans for travel nurses and which one will suit you. So, let us get started.
401(k)
It is a retirement plan for travel nurses offered by employers to save and invest for retirement. 401(k) retirement plan allows you to contribute a portion of your wages into an account. It is tax-deferred which means taxes are not paid until the money is withdrawn from an account.
Best for: This retirement plan is best for independent contractors or for those who work with agencies that do not offer retirement plans.
How it works:
- Travel nurses can choose how much to contribute.
- Employers can also contribute to an account.
- You can invest your 401(k) funds in stocks bonds or other options.
- Contributions are made pre-tax reducing your taxable income for the year.
Pros of 401(k):
- Reduce your taxable income for the year.
- Employers matching contributions can help boost you are your retirement savings.
- Contribution limits are higher and that will help you save more for retirement.
- A variety of investment options are available.
Cons 401(k):
- Penalties for early withdrawal
- High administrative fees.
- Contribution limits may not be sufficient for some travel nurses.
Individual retirement account (IRA)
IRA is another retirement plan for travel nurses that allows you to make tax-deferred investments to provide financial security once you retire from your job. There are two types of IRA (Individual Retirement Account).
- Traditional IRA
- Roth IRA
Best for: Travel nurses who are looking for a simple retirement savings plan.
Traditional IRA
An individual retirement account that allows tax-deductible contributions and tax-deferred growth until retirement withdraws.
Pros:
- Contributions are tax deductible which lowers your taxable income for the year.
- Growth of your investments without being taxed until you withdraw them.
- Wide range of investment options.
- No income limits for contributions.
- Lower fees as compared to other retirement plans.
Cons:
- Taxable withdrawals.
- The contribution limit might be lower for some individuals.
- Penalties for early withdrawals.
Roth IRA
A Roth IRA is a retirement plan that allows you to have tax-free growth and tax-free withdrawals.
Pros:
- Tax-free withdrawal.
- No RMDs which means no Required Minimum Contributions
- Flexibility in withdrawals
- No age limits for contributions.
Cons:
- Income limits for contributions.
- No immediate tax deduction
- Contributions limits are lower than other accounts.
- To withdraw your earnings tax-free, you must wait for 5 years.
- Those who have high incomes are not eligible for a Roth IRA.
- Tax rules might change in the future which is considered a risk.
Retirement options for travel nurses that they can consider
Some of the other retirement options for travel nurses that they can consider are as follows:
- Health Savings Account (HSA): Best for nurses who have high deductible health insurance plans.
- SEP IRA (Simplified Employee Pension): best for travel nurses who are independent contractors or are self-employed.
- 403(b) or 401(k): this retirement plan is best for nurses who work directly in healthcare facilities such as clinics, hospitals etc.
- Annuities: It is a financial product that provides regular income, the best for travel nurses who are looking for a predictable income stream in retirement.
- Pensions: Some healthcare facilities also offer pension plans, and it is best for nurses who are working long term with single healthcare facilities.
- Taxable Investment Accounts: another retirement plan best for nurses who want flexibility with their retirement savings.
- Real Estate Investment: Investing in real estate or rental properties is another best way for nurses to have a passive income after retirement.
Tips on how to set up a retirement savings plan
Setting up retirement saving plan is an important step for travel nurses that is a great move for their future. Here are tips on how to set up travel nurse retirement plan.
- Set clear retirement goals.
- Choose your retirement accounts such as 401(k) or IRA etc.
- Decide how much to contribute, start small if needed.
- Pick your investments such as stocks, bonds, etc.
- Set up automated contributions.
- Check your progress, review, and adjust annually.
- Avoid early withdrawals.
- Take help from professionals.
- Stay committed.
Conclusion
Travel nurses need to build a strong financial foundation for their retirement. Due to the unique nature of their job, there are many travel nurse retirement plans available such as 401(k), IRA etc. By setting clear goals, smart contributions, investing in real estate and taking help from professionals will help the travel nurses to make the best choices for their retirement plans. No matter where your travel nursing career takes you, you should be always prepared for your future.
If you are a travel nurse and looking for a job that best matches your skills and interests, then download SkillGigs app where you can find jobs of your interest.
