It’s no secret that a majority of Americans do not feel they are on track to retire comfortably. Between credit card, medical and student loan debt, saving for retirement can feel like an uphill battle — one that full-time healthcare professionals cannot escape.
The TIAA Institute surveyed over 1,500 healthcare workers, from physicians, surgeons and nurses to office and administrative staff, about their retirement readiness. While 91% are saving for retirement, 34% aren’t confident they’re saving enough, and 28% aren’t confident their savings are being invested effectively.
Notably, registered nurses are especially concerned, with only 14% stating they feel very confident that they will have an adequate retirement income.
Given that over 50% of Americans feel behind on their retirement savings, according to a CNBC poll, healthcare workers are actually above average when it comes to their confidence. But that doesn’t mean healthcare workers are exempt from financial worries, such as paying off debt or keeping up with inflation, notes Paul Yakoboski, senior economist with the TIAA Institute.
“It’s not surprising to hear someone say that they’re saving for retirement, but they’re not saving enough,” he says. “The reality is that every sector is dealing with a lot of financial demands.”
TIAA found that 85% of retirement savers in the healthcare sector carry debt, and 45% admit that they are saving less than they’d like because they’re contributing to debt payments. Student loans seem to be the most pressing source of debt. In fact, 45% of healthcare workers with student loan debt have taken a loan or withdrawn money from their retirement accounts to make ends meet.
“Debt holds back retirement savings,” says Yakoboski. “And this [survey] really highlights the disproportionate effect student loans have on the household finances of these professionals.”
According to the TIAA, healthcare workers are also concerned about having enough savings to cover medical expenses and long-term care in retirement. Thirty-five percent are not confident they can cover out-of-pocket medical costs like premiums, co-pays and deductibles. At the same time, 55% are not confident they can cover assisted living or nursing home costs. Given that healthcare workers have seen care costs up close, their concerns are likely more than founded.
Despite many healthcare workers feeling like they’re not on track for retirement, 51% reported receiving professional advice on planning and saving for retirement in the past two years, according to TIAA. Yakoboski questions whether the advice is specific to the employee’s stage of life or if it’s more general. He encourages employers to bring financial advisers who can help employees align their personal circumstances — like age, family and income—with a plan that addresses their needs.
“Retirement plan design revolves around contribution levels and asset allocations,” says Yakoboski. “But the context of the plan is incredibly important. That’s when those advice conversations where you can think out loud with professionals and connect dots become valuable.”