403(b) Story: Money Fit Nurses Study
by Kelton Global for Fidelity Investments
92% Motivated to Get More Financially Engaged but Cite Lack of Time as Challenge
BOSTON — Nursing is recognized as one of the nation's most demanding professions, complete with long work shifts, ongoing regulatory changes and the need for a constant focus while making critical decisions regarding the health of patients. Given such a challenging work environment, personal matters are often sacrificed or take a back seat. Finances are a perfect example: according to Fidelity Investments® Money FIT Nurses Study, more than half of nurses surveyed (56 percent) say they lack confidence in making financial decisions—and four in 10 (41 percent) attribute this to the fact they don’t have enough time to focus on them.
While an overwhelming majority of nurses–92 percent–say they want to learn more about financial planning, this struggle for time continues to be a challenge that has implications on retirement readiness. With this in mind, Fidelity Investments, the leading provider of workplace retirement plans for not-for-profit health care institutions, is launching an awareness campaign during National Nurses Week (May 6-12) to encourage nurses to take the time to focus on their own financial wellness.
The good news: despite their lack of financial confidence, the study suggests many nurses are taking positive steps with their money. For instance, 84 percent of nurses are proactively saving for the future; furthermore, an analysis of Fidelity business data examining the retirement savings behaviors of more than 38,000 nurses supports this finding, showing nurses are diligent savers with a total savings rate (employer plus employee contribution to a workplace savings plan) of 12 percent—close to matching Fidelity's suggested rate of 15 percent.
In addition, according to the study, more than two-thirds (67 percent) of nurses are making smart choices with how they invest their money and have an age-based asset allocation. While these behaviors provide a strong financial foundation, there's still opportunity for nurses to bolster their retirement savings even further, according to Fidelity.
Nurses Motivated to Learn about Financial Planning, but Often Overlook Workplace Resources
For many, the workplace is an easy entry point to learn more about financial planning, as most retirement savings plan providers offer free retirement guidance. Surprisingly, this accessible resource is not commonly used–62 percent of nurses who have access to retirement guidance at work don't take advantage. Again, the biggest obstacle is time, with one-third (33 percent) citing a lack of it as a barrier.
"Health care employees work in a unique environment, with long work shifts and heavy demands on their schedules," said Alexandra Taussig, senior vice president, Fidelity Investments. "Nurses Week honors our nurses for their compassion and expertise, and is also a time to remind these dedicated caretakers to get a 'retirement plan checkup' and focus on their financial future. Whether attending a workshop or speaking to a professional, taking a pulse-check on retirement savings at least once a year can help nurses feel more in control of their financial health."
While retirement guidance in the workplace may be underutilized, the study also finds that 85 percent of those who don't take advantage of it would be motivated to do so if they were given options that enhanced accessibility. For example, four in 10 (41 percent) of these nurses would be motivated to participate if their employer provided a class during work hours or had experts available to walk them through retirement plan options–either in person or on the phone.
Adjusting workplace guidance to match employee needs can be a powerful way to help nurses better understand their financial plan, and more importantly, encourage them to get engaged. Fidelity data finds that 35 percent of nurses take action4 after receiving guidance. Of those nurses, 69 percent of nurses increased their retirement savings contribution within 90 days of completing a guidance interaction by phone, in person or online.
How to Financially Empower Nurses
Given the lack of awareness around the availability of workplace retirement guidance, health care institutions can use Nurses Week as an occasion to call attention to this free benefit, which is available to employees as part of their overall retirement savings program. Other suggestions for employers include:
- Implement automatic annual increase programs and set the default deferral rate to at least six percent in automatic enrollment programs to encourage increased savings rates.
- Read "Financial Checkup on Nurses Retirement Readiness," which provides a snapshot of nurses' retirement readiness and offers suggestions on how they – and their employers – can take action to address their financial future.
- Read "Empowering Women to Take Control of Their Retirement," the first of a series of reports on the key differences and unique strengths of female employees.
- Offer targeted financial workshops that address specific needs of the nursing population.
About the Fidelity Investments Money FIT Nurses Study
The online survey was conducted by Kelton between October 6th and October 30th, 2014 among 356 nurses (Registered Nurse, Advanced Registered Nurse, Licensed Practical Nurse, Nursing Management, Certified Registered Nurse, Certified Nurse Anesthetist) ages 18+ who are employed or retired and have a qualifying retirement plan (401(k), 401(a), 403(b), 457, 457 (b), or 457(f)). Fidelity and Kelton are not affiliated. More information