Study Finds Nurses Saving More for Retirement Than Other Working Americans
BOSTON, MA, May 7, 2007 -- As National Nurses Week gets under way, new research from Fidelity Investments finds that nurses are working more hours due to a nationwide shortage and many are using the extra income to better prepare for their retirement years.
More than half (54%) of nurses surveyed reported that the income they earn from additional shifts is being used to pay down debt, and nearly one in four (22%) said they are allocating additional dollars toward their retirement savings.
Fidelity's study also found that 90 percent of nurses reported participating in their employer-sponsored workplace savings plan, and despite longer working hours, many (44%) are making the time to actively manage their plan's investments on an annual basis or more.
Nurses reported higher savings levels in 401k and 403b plans than their peers across the tax-exempt (e.g., hospitals, non-profits, religious and higher education institutions) and corporate sectors. On average, nurses have $64,000 in their workplace savings plans, compared to average balances of $48,000 among all workers in tax-exempt sector plans and $62,500 among all workers in corporate sector plans. The combination of higher earnings and higher deferral rates into workplace savings plans (9% deferral rate for nurses vs. 6.9% for most Americans) is likely driving the higher balances.1
"The percentage of nurses who are participating in workplace savings plans, taking advantage of their company match and planning to increase their contributions over the next 12 months is growing," said John Begley, executive vice president, Fidelity Employer Services Company. "Still, more than half of nurses recognize they are not saving enough for retirement and not surprisingly, the majority of nurses are concerned about the cost of retiree healthcare."
Awareness of Rising Retiree Health Care Costs
Almost all nurses surveyed (90%) report being concerned about the affordability of medical costs in retirement. And, when asked how much a typical 65-year old couple retiring today would need to cover health care costs in retirement, many nurses gave fairly reasonable estimates. Nurses estimated $185,000 -- just 16 percent less than the $215,000 estimated by Fidelity2 .
Despite citing many challenges in their profession, such as staffing shortages, longer working hours, high stress levels and an inability to focus sufficiently on patient needs, half of nurses (53%) said they plan to work either part-time or full-time in their retirement years. Almost all of these nurses (89%) report they want to work to stay busy and two-thirds (65%) love their job too much to leave it.
Still many will continue to work because they will need the employer-sponsored health insurance (63%) and the income to cover basic living expenses during their retirement years (65%). Three-quarters (78%) of nurses are concerned about their retiree health coverage being reduced or eliminated and more than two in three (69%) worry they may have to retire early due to health issues.
Widespread Access to a Workplace Plan, But Some Still Are Not Participating
Despite the prevalence of employer-sponsored retirement plans, 10 percent of nurses with access to plans still do not participate. Fidelity found these nurses, together with those who do not have a workplace savings plan, tend to be younger and less experienced and most admit they are not saving enough for retirement. Not surprisingly, only half expect a comfortable lifestyle in retirement, while three-quarters of nurses who do participate in their plans anticipate a somewhat or comfortable lifestyle in retirement.
"The good news is that younger nurses have time on their side," said Begley. "By participating in a plan today, and leveraging the tools Fidelity offers, we can help nurses retire with more confidence about their retirement years and future lifestyle."
About the Study
The Fidelity Investments Nurses Study was designed to measure retirement savings behaviors among nurses and their awareness of retiree health care costs, and also shed some light on the impact the nationwide nursing shortage is having on the profession. An online survey of a national sample of 300 full-time and part-time practicing nurses was conducted by Northstar Research Partners, an independent research firm, during the week of April 16, 2007.
About Fidelity Employer Services Company
Fidelity Employer Services Company (FESCo) is a division of Fidelity Investments. FESCo provides defined contribution and defined benefit retirement services, employer benefits and human resources administration, and payroll services to more than 20 million participants in the United States as of March 31, 2007.
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