5 Financial Risks Healthcare Workers Should Plan for Before Year-End

As we approach the final quarter, it’s crucial for healthcare workers to address financial risks that could significantly impact your 2024 financial goals. Whether it's unexpected tax bills, holiday expenses, or overlooked employee benefits, these risks can derail your plans. By taking proactive steps now, you can ensure you’re in a stronger financial position by year’s end.

#1 Review and Adjust Your Tax Strategy

For healthcare workers, managing taxes is essential, especially given the demanding nature of your profession. If you’ve made early withdrawals from your 401(k) and are under 59?, you might face penalties and a 20% tax on those withdrawals. Beyond 401(k) considerations, aligning your tax strategy with your financial goals is crucial.

Consulting with your CPA now can help optimize your tax strategy, whether it’s adjusting withholdings, maximizing deductions, or making charitable contributions. This proactive approach can potentially lower your tax bill come April 2025, allowing you to focus on your vital work without financial stress.

#2 Plan Now for Your Holiday Shopping Budget

The holiday season often brings added financial strain, and healthcare workers are not immune. In 2023, over a third of Americans went into debt during the holidays, with an average debt of $1,028. As the 2024 holiday season approaches, setting a realistic budget is key.

Given your demanding schedule, start planning your holiday spending now. Set a budget not only for gifts but also for travel, décor, and events. By budgeting early, you can avoid overspending and the financial stress that comes with it, allowing you to enjoy the holidays without compromising your financial health.

#3 Review and Maximize Employee Benefits

Healthcare workers often have access to valuable employee benefits, especially during open enrollment periods. Take this opportunity to review and maximize these benefits to reduce financial risks.

For example, if you’re not already contributing enough to get your employer’s 401(k) match, now is the time to start. Consider boosting your contributions to lower your taxable income. Also, don’t overlook your health savings account (HSA), which offers pre-tax savings on medical expenses—an essential benefit for healthcare workers.

Additionally, explore other benefits like discounted prescription medications, wellness programs, and mental health coverage. Fully utilizing these benefits can enhance your financial stability and well-being.

#4 Plan for the Unknown

Emergency savings are critical for everyone, but especially for healthcare workers who face unpredictable work environments. Yet, many Americans have little to no emergency savings, with a median savings of just $600.

Experts recommend having three to six months’ worth of expenses in an emergency fund. Assess your current savings and set a goal to build your fund by year’s end. By doing so, you’ll be better prepared to handle unexpected expenses, such as medical emergencies or job-related challenges, without disrupting your financial stability.

#5 Get Professional Help to Prepare for Year-End Investment Moves

As a healthcare worker, your time is precious, and managing your investments may not always be top of mind. Seeking professional help to review your investment portfolio can help you avoid financial risks as the year ends.

A financial advisor can suggest adjustments, such as rebalancing your portfolio, selling underperforming assets, or making retirement account contributions to maximize tax benefits. With expert guidance, you can approach the end of the year with confidence, knowing your financial future is in good hands.

Conclusion: By addressing these financial risks now, healthcare workers can ensure a smoother transition into the new year, with fewer surprises and more opportunities to achieve financial prosperity.

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Michael Budnick is a seasoned financial planner, coach, and author with over 25 years of experience in empowering individuals to achieve their financial goals. As the author of four groundbreaking books, including Prescriptions For Prosperity: Maximizing Investment Returns and Achieving Success in Healthcare Leadership and The Prosperous Nurse: Your Roadmap To Wealth, Health, and Happiness, Michael has made it his mission to provide valuable financial insights specifically tailored for nurses and other healthcare professionals.

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