The Behaviors of Saving

Temperature Check: Nearly Two in Three Nurses Are Concerned They Will Never Be Able to Retire

A Prescription to Help Strengthen Financial Health in Retirement?

Second in a series of articles focusing on specific professional demographic markets and the planning challenges facing members of these groups

May 06, 2014- BOSTON–(BUSINESS WIRE)–With the health care system seemingly in a state of constant change, two things remain constant: the number of caregivers is increasing, as the registered nurse is the country’s fastest growing occupation1; and nurses are at the frontline, helping to provide patients, families and physicians with premium medical care.

Despite this, many nurses fail to give the same level of attention to their own financial well-being. In fact, according to a report2 from Fidelity Investments®, the financial health of nurses’ retirement savings is in need of urgent care, as they are on track to replace only 59 percent of their ending income in retirement, a 26 percentage point gap from Fidelity’s suggested income replacement goal of 85 percent3.

This finding is from the latest report of Fidelity’s Defining Excellence series, which examined the savings behaviors of nearly 28,000 nurses enrolled in Fidelity workplace retirement plans across the United States. The report, based on proprietary business data, suggests many nurses are well aware that they face a retirement shortfall, with two-thirds (63 percent) concerned they will never be able to fully retire—and 4 out of 5 wanting help to better prepare for retirement4. The findings, released to coincide with National Nurses Week, which recognizes the critical role nurses play in the health of the country, also reveal opportunities for them to save more for retirement:

  • Encouragingly, nurses’ total savings rates (employer plus employee contributions) are at 12.9 percent, which is within Fidelity’s suggested range of 10-15 percent. However, younger nurses (ages 20-29) have a savings rate below this, at 9.6 percent and should consider deferring more. At a minimum, nurses of all ages should defer enough to take advantage of their employer’s matching contribution.
  • Despite their desire to prepare for retirement, only 14 percent of nurses take advantage of financial guidance. That number drops to 9 percent for younger nurses. However, findings show that guidance leads to positive action.
  • Simply increasing one’s savings rate by 1 percent could translate into an additional $180 of monthly retirement income5.

“Nurses are constantly making personal sacrifices to ensure all of the other people in their lives are getting proper care. It’s part of what makes them so special. While this is admirable, nurses deserve the time and resources to ensure the stability of their own financial future,” said Kathleen A. Murphy, president of Personal Investing at Fidelity Investments. “Nurses should feel empowered not just when they are caring for their patients and families, but also when considering their lifestyle in retirement, and National Nurses Week is a perfect time for this dedicated group to take a few minutes to tend to their retirement readiness and financial health.”

Health Care Employers Can Make a Difference: In-Person, One-on-One Meetings Most Helpful

For nurses who have received guidance, one third (33 percent) report taking positive action6, such as increasing their contributions to their retirement savings. Understanding the power of financial guidance, health care employers can play an important role in addressing the retirement readiness of their nursing workforce, and Fidelity’s Defining Excellence: Nurses’ Savings Behaviors and Retirement Readiness report offers the following suggestions that can help make a difference:

  • Given the unique working environment of nurses, which often lacks a designated work and computer space and variable floor shifts, many nurses find it challenging to properly address their finances. Thus, effective engagement for nurses may mean less email and more on-site guidance, coupled with paper-based mailings. Employers can also consider experimenting with mobile-based communications.
  • Promote on-site and phone-based guidance opportunities—and connect them to nurse-specific programs such as National Nurses Week.
  • Implement automatic annual increase programs and increase the default deferral rate to 6 percent in automatic enrollment programs, which are effective ways to promote increased savings rates.
  • To help improve the savings rates among younger nurses, make enrollment easy. Encourage engagement from the start of one’s career with new-hire orientation materials that emphasize the company’s retirement program benefits and the power of saving early.

In addition to employer assistance, there are many resources available that nurses can access to help improve their retirement health. To schedule a free retirement planning consultation, nurses can call 1-800-997-7815, or visit to access a wealth of material, including retirement planning tools and a Caring for Nurses’ Finances webinar.

Fidelity’s Services for the Tax-Exempt Market

Fidelity serves more than 4 million plan participants in more than 2,000 workplace savings plans across the not-for-profit market, including health care, higher education, research, foundations, faith-based, K-12 and other not-for-profit organizations. Fidelity’s comprehensive suite of 403(b) retirement services includes plan design resources, recordkeeping services, consulting and participant communication, education and guidance. With retirement planning professionals and an array of tools and resources to educate plan sponsors, Fidelity helps employers in the tax-exempt market maximize retirement benefits plans and increase employee retirement readiness.





About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $4.7 trillion, including managed assets of $2.0 trillion, as of March 31, 2014. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit

Investing involves risk, including the risk of loss.

Guidance provided by Fidelity is educational in nature, is not individualized, and is not intended to serve as the primary or sole basis for your investment or tax planning decisions.

Fidelity Investments and Fidelity are registered service marks of FMR LLC.

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© 2014 FMR LLC. All rights reserved

1 Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2014-15 Edition, Registered Nurses, April 2014

2 Fidelity Investments, “Defining Excellence: Nurses’ Savings Behaviors and Retirement Readiness,” April 2014

3 For the Projected Income Replacement Figure, the following methodology was used:

Workplace data for each individual participant in the dataset was projected to retirement age of 67 and then in retirement to age 93 using Monte Carlo simulations
250 Monte Carlo simulations were used for the projections for each participant. Monte Carlo simulations are based on historical index performance and were utilized to project asset growth until age 93, assuming consistent contributions through age 67, and also assuming no loans or withdrawals before retirement.
Projected asset allocation for each individual was based on their asset allocation as of 12/31/13, modeled with a static asset allocation mirroring their current holdings. All other participants with 100% target date fund holdings were rebalanced annually following the Fidelity Equity Glidepath.
Monte Carlo analyses were conservatively conducted on workplace plan data using a 90% confidence level, where 90% of the simulations fell above the estimates shown in Figure 6, and 10% of simulations fell below the estimates. The projections are hypothetical in nature, do not reflect actual investment results, and are not a guarantee of future results. Results may vary with each modeling projection and confidence level chosen and as assumptions and actual results and behaviors change over time.
Workplace retirement plan contributions were based on contributions made in the past 12 months and assumed to be made each year until the year of retirement, with withdrawals then commencing for each year through the year of assumed end of life, which is 93 years old for planning purposes.
All workplace plan data were projected to be withdrawn from throughout retirement using a systematic withdrawal program (SWP). SWP modelling is based on the projected account balance at age 67, and models equal monthly payments over 27 years (to 93 years old). An algorithm is used to create equal monthly payments for 27 years such that at the time of the final payout, each account balance is projected to reach $0.
Each individual’s salary is projected to grow at a real rate (net of inflation) at 1.5% per year. This is the net effect of inflation‐adjusted promotions and salary increases over a lifetime of work.
To arrive at a percentage of income replacement, the annual retirement income (from the SWP) for each individual is divided by the projected age 67 salary. These calculations are averaged for all nurses in the dataset.
4 Fidelity Investments, “2013 Nurses Retirement Study,” December 2013

5 Assuming a nurse is 35 years old and earning $60,000. With a balanced asset mix, it is assumed the nurse’s portfolio generates 5.5% hypothetical annual nominal returns. By the time the nurse retires at 67, extra $50 in monthly savings generates a potential $180 a month more in retirement income, which is $2,160 a year, and $54,000 over 25 years.

6 Taking positive action within 90 days after receiving guidance – either representative-led or self-directed. Positive actions include: increased deferral rates, made an exchange, consolidated assets, opened a retail IRA