You’ve been here before. It’s late December, and you’re thinking about the New Year and the resolutions you’re going to make.
Working as a travel nurse is rewarding and exciting. You earn good money and get to experience new places every few months.
But remember, you most likely won’t be a travel nurse forever! You may not be ready to settle down yet, but you will probably be on a different path one day.
Now is the time to prepare for your future — put some of the money you make into good use and start saving for your golden years.
Don’t wait until it is too late. Plan, so you have everything you need when retirement comes.
Continue reading to learn more about creating your travel nurse retirement plan. This article is full of tips to give you peace of mind when the time comes to retire.
Table of Contents
- Retirement Plans for Travel Nurses: It’s Never Too Early To Begin
- What Retirement Plans Are Available to Traveling Nurses?
- Can You Have a 401(k) as a Travel Nurse?
- 3 Options for Travel Nurse Retirement Plans
- #1: Traditional 401(k)
- #2: Traditional IRA
- #3: Roth IRA
- Tips for Managing Multiple Travel Nurse Retirement Plans
- Trusted Nurse Staffing Helps You Get on Track for Retirement With a Matching 401(k)
Retirement Plans for Travel Nurses: It’s Never Too Early To Begin
There is no age limit when it comes to figuring out the best retirement plans for travel nurses. Although it may seem like the perfect job for nurses under 30 who don’t have children, there are many travel nurses over 40.
No matter what your age, it is never too early to start saving. As a travel nurse, it is no secret that some cities pay more than others. The US Bureau of Labor Statistics states that registered nurses average $39 an hour, while travel nurses can earn between $37-$82 an hour.
You can do it all as a travel nurse:
- Explore a new city
- Work with new patients
- Connect with new people
- Earn a good salary
- Advance in your career
- Save money for retirement
Retirement experts often suggest saving ten times your pre-retirement salary so that you can live on 80% of your pre-retirement annual income.”
Have you ever heard about the 4% rule?
The 4% rule is based on planning to withdraw 4% of the total you have saved each year to live comfortably. This percentage is figured to cover 30 years of living expenses while retired.
What Retirement Plans Are Available to Travel Nurses?
Every agency offers different retirement plans and resources.
Here we will discuss a 401(k) and individual retirement accounts (an IRA).
Your best bet is to contact Trusted Nurse Staffing to learn more about the specific retirement plans available. Trusted Nurse Staffing makes finding a new opportunity with great benefits easy.
Can You Have a 401(k) as a Travel Nurse?
You can have a 401(k) as a travel nurse. Many travel nurse agencies offer traditional 401(k) plans. The contributions to this plan are tax-deferred. You will only pay tax when it is time to withdraw your funds for retirement.
3 Options for Travel Nurse Retirement Plans
Your regular income is taxed between 10 to 37%. This percentage fluctuates depending on the amount of your taxable income and filing status. After paying taxes, consider your earnings and decide how much you can allot to your future.
Being prepared is always the best option.
#1: Traditional 401(k)
A 401(k) is a defined contribution plan, meaning employers can make a specific contribution annually.
For example, your employer may give you a 4% return on your investment. Risk-free investments are always worth it!
Weigh the pros and the cons when deciding on opening a 401(k).
There are always limitations, but the most crucial factor is to learn about your options.
Advantages of a Traditional 401(k)
These plans allow the employer and employee to make tax-deferred contributions, so you do not need to pay income tax until you withdraw your funds.
You don’t pay taxes immediately on the money you contribute to your 401(k). For example, if you make $60,000 in a year and contribute $7,000, your taxable income would be $53,000, not including any other deductions or adjustments.
This option is one way to end up in a lower tax bracket if you have a high tax burden. This investment can help you reduce your taxable income.
Some agencies will match your 401(k), meaning they match the employee’s contributions up to a certain amount.
This option is something you want to take advantage of! Think of it as FREE MONEY. However, you often need to have worked a set amount of time for the company before this opportunity is available — it is usually a year or more!
Having your employer match a percentage of your investment is undoubtedly an advantage. Maybe you earn 15 cents on every dollar you contribute. That amount sure will add up over time.
Disadvantages of a Traditional 401(k)
If you have a higher salary when you retire than when you contributed to your 401(K), you will owe more for being in a higher tax bracket.
Additionally, most times, you must work for an employer full-time for over a year before they match your contributions.
Travel nurses often struggle to meet these vesting requirements as they usually move from company to company looking for new opportunities. However, once you stay with one agency, like Trusted Nurse Staffing, your 401(k) can add up across multiple assignments.
Bouncing around to different jobs without the support Trusted Nurse Staffing can provide makes saving for your future more challenging. Create a free profile today to learn more about the benefits of working with us.
#2: Traditional IRA
Another option is to move your money to an IRA to have more decisions about the investment option you desire. Also, diversifying your retirement portfolio is always a good idea.
If you don’t have a significant income tax burden, not paying taxes on the part of your income may not matter, and therefore, you may choose an IRA.
Many travel nurses receive a large amount of their pay from tax-free stipends and therefore have lower taxable incomes. In addition, frequently, travel nurses have other deductibles making their taxable income lower. In these situations, investing in an IRA may be even more advantageous.
Advantages of a Traditional IRA
The one thing you need to remember is that IRA contributions add to your savings for retirement, even if they are not tax deductible.
The good news is that you avoid paying taxes when you do a direct rollover to transfer your money.
In 2023, you can contribute up to $22,500 a year if you’re under 50. Those 50 and older can contribute $30,000.
Disadvantages of a Traditional IRA
Unfortunately, there are high tax penalties when you withdraw funds before retirement age. You may have to pay up to a 10% tax penalty.
#3: Roth IRA
A Roth IRA is a particular individual retirement account.
Advantages of a Roth IRA
With a Roth IRA:
- Your investment can grow tax-free
- You can withdraw your contribution tax-free at any time
- You can contribute up to $6,500 in 2023
- If you are 50 or older, your limit will be $7,500 in 2023
- Once you are 59.6 years old, withdrawals will be taxed as current income
These contributions are not tax-deductible. However, since you pay taxes on the money you put into your Roth IRA, you don’t have to pay when you withdraw the fund.
Disadvantages of a Roth IRA
On the downside, you can not withdraw your earnings anytime with a Roth IRA.
However, there are some exceptions. Once you reach 59.5 years old, are disabled, or need funds to buy a first-time home, you can withdraw earnings tax-free.
Furthermore, there are contribution limits depending on your income level. Roth IRA income limits for the 2023 tax year will be $153,000 for single filers and $228,000 for married couples who file jointly.
Tips for Managing Multiple Travel Nurse Retirement Plans
Sometimes, you end up with multiple retirement plans, which is better than not having options. However, the more plans you have, the more confusing it can be.
Here are some tips for more ease when saving for retirement.
- Having money in multiple accounts is OK. Therefore, leaving the money where it is may be your best bet. You are good if your employer allows you to stay in your current plan.
- Sometimes, you can move money into a new employer’s plan. Check with your advisors to see if transferring the money into the new account is possible.
- Choose an IRA account. You may transfer your money using a direct rollover to avoid being taxed on the money.
- Take the money as a distribution by cashing out. Often there are penalties if you withdraw the money before retirement age, but it is up to you to decide if the penalties are worth it.
Trusted Nurse Staffing Helps You Get on Track for Retirement With a Matching 401(k)
There are many benefits to working with Trusted Nurse Staffing.
For example, we offer:
- High paying options
- Weekly paychecks
- Housing, meal, and travel stipends
- Rental car options
- Guardian dental and vision insurance
- Referral bonus program; and
- Much more
Additionally, our 401(K) plan has a 4% match after 1,000 hours and a year of employment. There is that FREE money we were talking about earlier.
Trusted Nurse Staffing can help you figure out how to best prepare for your retirement. We are a small company that prides itself on working closely with our recruited nurses.
We pick up the phone when you call. Contact us today at 1 (877) 853-5010. We can’t wait to work with you to help you find the best opportunities for your skill set.
Is it time to start a new chapter in your life?
If you are ready, you can do it in three easy steps!
- Apply today.
- Find your dream job.
- Start your adventure.
Create your free profile today. We are waiting to assist you!