Nursing is tough. When you become a nurse, the monetary benefits remain the least of your priorities. But it’s not unusual for you to wonder about the pension schemes you should get at the end of your term being a nurse.
Pretty much everywhere in the world, there is a shortage of nurses right now. Nursing schools are trying hard to keep the nurses they have while inspiring other young people to join the career path. Nurses are continuing to work way past their age of retirement due to the shortage and recession.
Nursing can be stressful but has its monetary perks nonetheless. Often we see young nurses not thinking about retirement and the schemes they are eligible to get, which causes them to take ignorant financial decisions. If you are still young, not getting a percentage of your salary every month may seem like a Faustian bargain, but it’s not.
Do Nurses Get Pensions:
The latest statistics conclude that 42% of registered nurses receive pensions by the time they retire. If you are a registered nurse working directly for the government or government hospitals, you are likely to get a pension, like any other government employee.
Nursing is a versatile career, and no two nursing job is the same. So diverse are the pension packages. If your nurse friend got a pension, that doesn’t necessarily mean you will get one too. nursing pensions depend on the demographics of your workplace and the authority you are working for.
According to US news, government jobs have 80% higher pension disbursement than private jobs. While nursing at a private place is lucrative, the perks of government jobs are much higher.
Joining a nursing union or working for a relatively big company can pave the way for your pension.
How do Pension Schemes Work:
Pension is like a variety of retirement plans, where the employer and/or employee contribute predefined money to the pension funds periodically, which is later paid to the employee monthly after retirement.
The longer you work for a company, the more will be the pension. When you keep contributing, the funds keep increasing from the contribution and the bonuses provided by the vendor.
At the end of your service, a percentage of your latest salary is multiplied by the years of service to get 60-70% value of your salary to be given to you as pension.
What Happens if you leave Your Job?
We may be presented with three options upon leaving,
- You take a lump sum amount from the pension fund you built.
- An annuity, which gives the person the option to receive money at a later date as monthly income.
- A combination of the two, if your company is generous.
If you are given an option, take it. Some hospitals or agencies don’t even care if you lose your job before you retire.
What is Good About Pension:
The biggest benefit of having a pension fund is that your employer contributes an equal or similar amount to the fund as you.
Pension accounts leave you with the safety of regular income even after you stop going to work. You don’t need to rely on the savings you have for you to sustain a comfortable life after retirement. For those with an active pension plan, your payments are guaranteed to reach you after you retire.
Most authorities deduct the amount you contributed to the pension fund before calculating the tax. That leaves you with less tax payment, which is a good thing.
Some of the financial planners might consult you to contribute more to pension funds to reduce your taxes even more.
You are Forced to Save:
Only 16% of the Americans have more than enough saved for their retirement, others are still way behind their financial planning to sustain a comfortable future.
With a pension plan, you are forced to contribute a certain amount to the fund every month along with your employer. While for some – who have financials to fall back on – this may feel like a counterproductive approach, this has proven to be the best option for retirement.
Do School Nurses Get Pension:
Hospital nurses, in general, get better salaries than school nurses, but the pension scheme is often better for school nurses.
When you are a school nurse, you are working for the government directly, which means you are being paid by the taxpayers. But due to the same reason, your pension plans get better with each passing month as the government is contributing a generous amount every month to your pension fund.
Depending on the location, your pension varies by the last salary or the average of three months and the age when you decided to retire. Taking frequent over time can also increase the chances of you getting a better pension according to your local rules.
Some Important Tips:
- Start planning as early as possible. Go through the details with a financial planner, or study the packages yourself.
- Experts vouch for saving at least 15% of your income.
- Choose your pension plan wisely, don’t get overwhelmed with the fine prints.
- Make sure you have an active backup plan after retirement, don’t just rely on the pension.
The Bottom Line:
If you are considering nursing as a career option, along with job satisfaction, you are to get a handsome salary and pension as per your state rules. The job itself can be tricky but has the potential to bring you up the ladder.
If you can stay on the job till retirement, you may also find yourself as financially stable as to live a comfortable life. By far, the calculation of pension is dependant on the years of service, if you have decided to apply for the nursing job, don’t delay anymore.
Companies go for 401Ks instead of pension plans, which allows the benefited to reduce their contribution as low as 0%, talk to your financial planner for more details before investing.