Managing a healthcare workforce comes with unique challenges—including how to help employees plan for retirement. New data paints an interesting story about how healthcare workers feel about retirement, how ready they are, and what can be done to maximize their engagement.
Q&A with Alexandra Taussig, Senior Vice President, Fidelity Investments
A > Healthcare jobs are demanding, often requiring long hours and emotionally draining tasks of employees. Workers are not thinking about themselves or their money while at work, but about patients, which can translate to lower engagement in retirement programs and resources. Fidelity's Money FIT Nursing study found that 62% of nurses who have access to free retirement guidance at work do not take advantage, with 33% citing a lack of time as their biggest obstacle.
Increased accessibility to retirement resources helps healthcare workers better understand their financial positions. One-on-one sessions offered on the hospital floor are the best way to reach nurses, in our experience.
A > In our 2015 “Decision to Retire” survey, 75% of healthcare workers said they want to retire before turning 67, but only 59% think they will do so. Almost a quarter of healthcare employees said they do not feel at all financially prepared to retire. However, when we analyzed their savings against their estimated expenses in retirement, 8 out of 10 were actually on track to meet their retirement income goals. The perception doesn't necessarily match the numbers, which is something that can be solved through education.
Some interesting reasons why healthcare workers choose not to retire: 55% said work keeps them intellectually challenged, and 30% said they have financially dependent children they feel responsible to support. (This is a growing sect, according to our data, as people become parents later in life.)
A > Nurses as a group are excellent savers, especially in the Baby Boomer generation. Though they are often unsure of their retirement position, as a result of company mergers, job changes or a lack of knowledge about investing, which leads to feeling of anxiety or unpreparedness. Sixty-eight percent of nurses are at least a little confused about navigating their financial path for the future, and said they could use more knowledge to enable them to make smart financial decisions.
Surprisingly, physicians are not as financially prepared for retirement as many may think. Social Security covers about a third of an average worker's retirement income, but because physicians are so highly compensated, it covers only 12% to 15% of their retirement income. While they too are good savers, only half are putting aside our recommended savings rate of 15%. Non-qualified retirement plans, such as a 457(b), represent a greatly untapped resource for physicians and healthcare executives to save beyond the company-sponsored qualified plan. 71% of physicians are not currently contributing to their company's nonqualified retirement plan.
A > Your retirement plan provider should be able to analyze your work force by certain demographics— geography, part-time vs. full-time, gender, occupation type, and more. These types of analyses can help employers identify which groups are vulnerable, and develop focused programs to improve their employees' financial position, retirement readiness, and ultimately, workplace satisfaction.
Modern Healthcare and Fidelity Investments are independent entities and are not legally affiliated. This Q&A was conducted by Modern Healthcare Custom Media as part of the supplement. Views expressed are as of publication date and may change based on market and other conditions.