Financial Wellness

Retirement Planning for Healthcare Professionals: Mapping Your Path to Financial Independence

Brittany Greaves, RN
March 21, 2024
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Mounting financial stress can quickly lead to burnout and poor outcomes, personally and professionally. That's why Trusted Health partnered with Ky Arnold, nurse and co-founder of InvestHealth, to bring our community actionable strategies to achieve financial security. Through automating your finances, improving your savings rate, and calculating your retirement number you can prioritize your financial education, safeguard your mental health and show up as your full self for both your patients and family! 

If you missed the webinar, don’t worry! You can catch the recording for common calculation comparisons, helpful resources, and insightful questions from our audience. We’ve summarized the highlights from the event below. 

Alarming Financial Statistics 

Did You Know:

  • 73% of professionals say their #1 source of stress is finances 
  • 95% of millennials are saving less than recommended
  • 67% of households have less than $1000 in savings and
  • 72% of household do not have a financial plan

So know this: you are not alone. You have the power to change your life and your families trajectories, by shifting your focus to empower and educate yourself to become financially independent and secure. 

Why Financial Planning is Important for Healthcare Professionals

What is your why? This is a personal exercise that will define your financial plan. Taking the time to reflect and define your ‘Why’ can establish a clear goal and frame of reference for your financial journey. You can ask yourself questions such as: “What would I do if I were financially independent or able to retire earlier than you originally planned?” and “What motivates me to take control of my finances?” Take some time to think and write down your reasons, inspirations, and passions. 

Key Strategies for Your Financial Plan

  1. Master Your Savings Rate

Financial advisors recommend a savings rate between 20-25% of your total income. 

  • Compound Interest in the following methods:
    • Savings Account: National average interest rate is 0.46% APY
    • High Yield Savings Account: Help you grow your savings faster than average accounts with an average of  5%
    • Stock Market: Utilizes compound interest rates with an average of 10%
  1. Automate Your Finances 

After receiving your paycheck, follow these steps:

  • Add to your 401k up to company match
  • 1st: Pay yourself first/Invest in your future self some text
    • High Yield Savings Account: Emergency Fund or Short Term Needs
    • Personal Investments: Roth IRA, Brokerage Account, Crypto, and/or Real Estate
  • 2nd: Take Care of Expenses
    • Credit Card Expenses: Subscriptions, Groceries, Cell Phone
    • Not on Credit Card: Mortgage, Property Tax, Student Loans
  • 3rd: Personal Spending
    • Anything you wish!
  1. Limit Your Spending

Cutting back on your purchases is a great way to help you achieve your financial goals. Before making a purchase, ask yourself these questions to become more intentional about spending:

  • What is my reason for buying this?
  • Is this a want or a need?
  • Can I borrow, find a less expensive option, or wait until its a true need?
  • How long will this purchase make me happy? Does it align with what I value?
  • Will my short and long term goals remain intact?
  1. Calculate Your Net Worth

Assets - Liabilities = Net Worth

  • Assets (Makes you money): Cash, Checking Accounts, High Yield Savings, 401k, 403b, IRA, Taxable Brokerage, Crypto, Investments, Business, Boat, Jewelry, Art, etc. 
  • Liabilities (Costs you money): Credit Cards, Student Loans, Auto Loans, Lines of Credit

Calculating Your Financial Independence Number (Based off the Trinity Study or 4% rule)

Total Yearly Expenses  x 25 = Financial Independence Number (Amount of money you need to have invested in order to be financially independent)

  • You should assess what you’d like your quality of life to be like at retirement to accurately save/invest adequately 

Wrapping Up: Your Journey to Retirement

As healthcare professionals, your dedication to your patients is unwavering. However, it’s crucial to remember to prioritize your own financial well-being to ensure a stable financial future for yourself and your loved ones. By implementing the strategies discussed in this webinar, you’re taking proactive steps towards financial freedom. Remember, your financial journey is unique, and every small step you take today brings you closer to a more secure tomorrow.

Never underestimate the power of financial education and empowerment. We want to support you along your financial journey so feel free to check out our other financial wellness resources. Together, we can break the cycle of financial stress and pave the way for a brighter, more prosperous future for healthcare professionals everywhere. 

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