Financial Checkup for Nurses
People have a general desire for financial independence at all stages of life. We all recognize that an increased financial independence gives us the luxury of more options and the ability to build that future for ourselves.
Where does this leave people who know they should do more for themselves but haven’t quite gotten started? Or those who have money in various financial instruments but aren’t sure if they’re choosing wisely?
Many of us would like to bring a sense of order and purpose to our financial lives. In this article, I am going to discuss some key financial concerns that will address some of these questions.
Key Financial Concerns for Nurses
Here are some key financial concerns for nurses to keep in mind:
- Income Management
- Income Protection
- Long-Term Care
Managing your finances begins as early as when you receive your first paycheck. In most scenarios, excluding some nursing contracts, you may notice money is automatically withheld or deducted to pay for federal and state taxes, Social Security, and Medicare.
From what is left over, you will probably allocate these funds to cover expenses, such as housing, groceries, and other bills. You then may have some left over for entertainment or a desired purchase. Some of us wisely make sure we allocate a portion to saving for the future as well.
What you do today will dictate your later years. Implementing effective saving and budgeting strategies will assist you on your journey to retirement. The income you will need during retirement is dependent on the lifestyle you plan to live.
- Will you be relocating or staying where you are?
- What hobbies or activities do you intend to pursue?
- Do you plan to work part-time or not at all?
All of these variables should be examined as you create your plan.
If offered, you will usually start out with your employer-sponsored retirement plan and for some nurses that may be a 403(b). Additional personal investments may also help generate retirement income. You should speak with a qualified financial professional to determine which products may work best with your risk tolerance and investment horizon.
Your single most valuable asset—assuming you’re not close to retiring—is your earning power. The ability to generate income (and this alone) allows most of us to obtain all other assets. It is the foundation of your financial independence, both now and in years to come.
However, your ability to earn an income is not guaranteed. While it is difficult for us to face our mortality or the thought of disability, planning for it and adequately transferring risk can help ease the burden you and your loved ones may have to face later on.
Disability Income Insurance is the most overlooked insurance. It’s an insurance product that provides a portion of lost income due to a covered disability from an illness or accident that would prevent you from working at your regular employment.
Life Insurance in a contract between you and an insurer that pays out a sum of money upon your death to those you designate as beneficiaries. The death benefit can cover final expenses, outstanding debt and bills, but it can also go towards future needs.
Some of those future needs can be supplementing your retirement income or paying for college expenses. There are two different types of coverage, term and permanent. Depending on your situation will dictate which type of coverage works best for you.
Some employers offer disability and life insurance policies, but their coverage may not be enough depending on your personal situation. Your employer-sponsored coverage could also end if you were to leave your job for any reason. You should always read your company’s policies carefully before making any changes.
As we age, there is an increased probability that we may eventually need assistance with the activities of daily living, such as bathing, dressing, and eating. I’m sure you’ve witnessed this caring for your elderly patients or relatives.
This type of care, regardless of whether it’s in-home or at a facility, does not come cheap. Medicare does not cover long-term care, and most of us can’t afford to pay for it out of pocket without depleting our retirement nest egg.
Though most people recognize the value of long-term care insurance, often the expense of buying a standalone policy deters them from seeking coverage. Some insurers offer riders for an additional cost that addresses this need. You should seek the guidance of a financial professional for more information.
When it comes to saving for retirement, time is of the essence. The longer your investment horizon, the more time your money has to work for you. Therefore, you shouldn’t delay any longer.
Contact a financial professional to arrange a meeting to assess your situation. From there, commit to a strategy and stick with it. Before you know it, those daydreams of retirement will no longer dissolve into anxiety and worry; you’ll feel confident that you are back on track.
What Else Can You Do?
Make sure you’re making what you deserve! Use Salary Explorer to compare nursing salaries across the country.
You can reach Morrayna on social media at @MorraynaGaskins.
Morrayna Gaskins offers securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC (Equitable Financial Advisors in MI & TN). Annuity and insurance products offered through Equitable Network, LLC. Individuals may transact business and/or respond to inquiries only in state(s) in which they are properly qualified. AGE- 158693(2/21)(Exp.2/23).