Travel nurses should start preparing for their retirement soon after getting employed. Saving early allows their money to grow from compound interest. Regardless of how long they will be working, planning early guarantees nurses an enjoyable life once they retire. If you are a travel nurse, here are eight ways you can use to save money for your retirement.
Start saving now
Travel nurses who have just started saving for their retirement should start saving, setting aside as much as they can afford. Suppose a 25-year-old nurse starts saving approximately $75 monthly. They will have accumulated more money by the age of 60 than someone who invested $100 monthly at 35 years of age, even though they will have invested a shorter period. Investing a small amount over a long time frame can significantly impact your investment results than investing large amounts for a shorter period.
Contribute to the 401(K)
Some travel nurse agencies provide traditional employer-sponsored plans. Contributions made on the plan are tax-deferred, meaning nurses are only taxed once they withdraw their retirement savings. This approach cuts down the taxable income each year contributed. 401(k)s have more contribution limit annually than other retirement options. Further, some employers often match the contribution benefit. Adopting this benefit allows you to receive free money, which increases your savings.
Match your employer’s contribution
Suppose your employer agrees to match your plan contributions to ensure your contribution is enough to enjoy comprehensive benefits. For instance, assuming an employer opts to match 50% of an employee contribution to 5% of their travel nursing salaries. In this case, assuming the nurse earns $500,000 annually and saves $2,500, their employer may add $1,250 free money.
Launch an IRA
Travel nurses may choose to open an IRA (individual retirement account). Here, they can choose between a traditional IRA and a Roth IRA. The former option could be ideal for a travel nurse based on whether they or their spouse already have a workplace retirement plan. Traditional IRA contributions could be tax-deductible, and the investment revenue may be tax-deferred until nurses withdraw their money after retirement. The Roth IRA plan may be ideal for travel nurses that meet the terminated income limits that depend on their federal tax filing.
Consider automating your savings
Some financial experts always advocate for the paying yourself first concept. Travel nurses can automate their retirement contributions monthly and get an opportunity to grow their savings without noticing it. Various financial institutions today allow nurses to automate their contributions directly to their retirement plans with ease. Nurses can automate their retirement contributions with their ideal financial institution based on their needs.
Watch your budget. Consider various ways of cutting costs, such as carrying lunch to work or negotiating a lower rate for their car insurance. Some financial institutions provide travel nurses with a cash flow personal digital assistant. The system is designed to help them determine where they are spending the most cash. They can also rely on the system to reduce spending to increase their investment or savings in their retirement plan.
Save all your extra earnings
If you earn extra money, consider saving it all. Whenever you get a salary raise, consider increasing your retirement package contribution as well. Invest at least half the extra amount in your retirement plan. While you may be tempted to spend your salary bonus or tax refund, it’s always advisable to fight the temptation. Instead, consider giving yourself a small treat and investing the remaining amount towards your retirement goal.
Delay social security as you near retirement
According to experts, travel nurses may defer their social security payment until they attain 70 years. By doing so, they increase the amount they receive in the future. The earliest nurses can start receiving their social security help is by the age of 62. However, for each year they defer, they will increase their benefit and earn extra income. Pushing the retirement back for a single year can make a big difference. Further, it can increase survivor earnings for your spouse.
Travel nurses should understand the importance of investing in their retirement plans. Knowing the amount they want to save and determining methods of increasing their contributions is ideal. Some RNs start thinking about their retirement way too late. Start now and have something to smile about during your retirement days.