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 401(k) and 403(b) 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 Fidelity.2
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.
About Fidelity Investments
Fidelity Investments is one of the
world’s largest providers of financial services, with custodied assets of $3.0
trillion, including managed assets of more than $1.4 trillion as of March 31,
2007. Fidelity offers investment management, retirement planning, brokerage,
and human resources and benefits outsourcing services to more than 23 million
individuals and institutions as well as through 5,500 financial intermediary
firms. The firm is the largest mutual fund company in the United States, the
No. 1 provider of workplace retirement savings plans, one of the largest mutual
fund supermarkets and a leading online brokerage firm. For more information
about Fidelity Investments, visit www.fidelity.com.
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