Nurse Retirement: Income Sources - The Gypsy Nurse

By Honza Hroch – CreativeNurse

April 14, 2019

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Income Sources Available for Nurses During Retirement

nurse RetirementThroughout you career as a nurse, chances are that you’ll probably have the opportunity to partake in a variety of retirement plans either by setting up one yourself or by working for different employers.

Some of the major areas capable of creating income for you when you retire will be discussed in detail:

401(k)

This is a plan established by your employer which enables you to have some money removed from your salary automatically and put into the plan. Many travel nurse agencies will match a percentage of the amount you deposit. This makes a 401K a great option for nurse retirement income as travelers.

401(k) plans permit you to put off paying your taxes pending when you begin to make withdrawals except if your employers offer a Roth option in which taxes are paid up front. In addition, some 401(k) plans allow you borrow funds from your plan assets however, you must wait to clock 59.5 years before you will be granted access to the money. If for any reason you wish to make some withdrawals before the age of 59.5, there are additional tax penalties that must be paid. Understanding the plan fully is very vital as well as knowing that taxes are only deferred to the future when not paid up front.

Pension

Luckily for some employees, employers set up a pension for you where money is paid in monthly.  A pension provides an income stream in retirement and is also a wonderful addition to every account you own.  A pension account is hugely beneficial but only a few companies still provide pensions, most of them don’t. There are lots of decisions to make prior to getting your pension.  More often than not, you must decide if this income stream will last throughout your lifetime only or if you’d like to include your spouse in the plan. Unfortunately for travel nurses, pensions aren’t a viable option for nurse retirement income.

IRA

This is an individual retirement account which can be created and you get to deposit funds into it provided that you earn an income.  There are limits on income which determines if you qualify to put in a contribution that is deductible.  The IRA is very similar to 401(k) in that it has a Roth option which allows you deposit money into the plan after taxes have been paid and then grants you access to withdrawals that are free from being taxed in the future.

Social Security

Here’s how social security works; while working, you are paying money into the collection of funds continuously which entitles you to receive funds from the program every month when you retire. The age at which you can begin your social security income varies and the later you begin to withdraw, the higher you can earn. The standard age of retirement to earn benefits from social security is 66 years however, withdrawals can be made as early as 62 years or as late as 70.

Annuities

Annuities are very similar to pension and also a great means of generating a lifetime income stream for those without pensions.  This comprises an accumulation and distribution phase where money grows and an amount is paid out monthly to the annuitant on the plan. The sum of money paid out is dependent on the amount of money accumulated inside of the plan and also on annuitant’s age.

Real estate

Real estate can also serve as another source of income when the income gotten from rent is more than the mortgage paid or if the mortgage has been paid off completely.   This income stream will keep bringing in money for you and your family pending when you make a decision to sell off the property.  Real estate that generates income is great provided that you’ve got the energy required to care for the property or you can employ somebody to help manage it for you.

Regular investment account

Having a regular investment account in addition to IRA and 401(k) can be of huge benefits. A general investment account is not affected by tax rules and is built in the conventional retirement plans.  When you have some money invested outside of the plans that qualify for tax, it makes it possible for you to withdraw money before age 59.5 with no tax penalty. It will also provide you more flexibility around planning your tax and around when you are ready to retire.

Cash Value inside of life insurance

In addition to the death benefit, several permanent life insurance policies have a cash accumulation account which grows with time. The cash accumulation inside of life insurance policies grows on a tax postponed basis and although its growth is not as quick as money invested in the stock market, it’ll make a wonderful addition to your retirement plan.  The assurances behind some of these policies give one the confidence that no market corrections will happen within the policies and so we can establish a more predictable future.

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Variable annuities and their underlying variable investment options are sold by prospectus only. Investors should consider the investment objectives, risks, charges and expenses carefully before investing. This and other information are contained in the prospectus or summary prospectus, if available, which may be obtained from your investment professional.  Please read it before you invest or send money.

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