What to Do If You’re Nearing Retirement with Less Savings Than Expected: A Guide for Healthcare Workers

If you’re a healthcare worker approaching retirement and find your savings lower than expected, you're not alone. Many face similar challenges as retirement costs continue to rise. But don’t lose hope—there are ways to improve your retirement outlook.

The Reality for Many Americans: Retirement Savings Shortfalls

According to the 2023 Protected Retirement Income and Planning (PRIP) study, 51% of those aged 45-75 feel they don’t have enough saved for retirement. For many, covering monthly expenses in retirement remains a concern, with 32% worried about having enough to cover even the basics. If you’re in healthcare, you know the importance of planning and preparation; the same approach can make a significant impact on your retirement savings too.

Here are steps that can help you get back on track.

1. Assess Your Financial Situation

Take a comprehensive look at your current finances. Inventory your savings, assets, and income streams, including Social Security and any pension plans. For most healthcare professionals, Social Security will replace only a portion of pre-retirement income—about 39% for someone retiring in 2024.

Consider your ideal retirement lifestyle. What’s the gap between your current savings and your goals? Being realistic now can help you develop a plan to bridge the difference.

2. Adjust Your Retirement Expectations

Once you have a clear picture of your finances, it may be necessary to adjust your expectations. For example, consider delaying retirement to increase savings and Social Security benefits. This could be especially beneficial for healthcare workers accustomed to active roles—part-time work may provide needed income and help ease the transition to full retirement.

3. Maximize Contributions and Catch-Up Options

To boost retirement savings, ensure you’re maximizing your contributions, especially if your employer offers a 401(k) match. Also, make use of catch-up contributions available to those 50 and older. In 2024, workers can contribute up to $30,500 to their 401(k) accounts, allowing you to strengthen your retirement savings substantially.

4. Reduce Living Expenses

Consider small adjustments in your daily spending now to benefit your future. Reducing unnecessary expenses, such as cutting subscriptions or dining out less, can free up funds to invest in your retirement. Some may find that downsizing their home or relocating to a lower-cost area can make a significant impact on their retirement years.

5. Explore Additional Income Streams

Healthcare workers possess a unique set of skills that can translate into freelance or part-time work, even in retirement. Look into opportunities to monetize your expertise or hobbies, or consider investment income options like rental properties.

6. Reevaluate Your Investment Strategy

With less time to save, reassessing your investment approach can help make the most of your remaining working years. Finding the right balance between growth and stability is key. Consulting with a financial advisor can provide tailored strategies to optimize your savings while managing risk.

7. Plan for Healthcare Costs

Healthcare costs are a major concern, especially in retirement. Fidelity’s recent estimate suggests an individual retiring at 65 can expect to spend $157,500 on healthcare throughout retirement. Consider insurance options like Medicare and any necessary supplemental plans to manage these anticipated costs and set aside an emergency fund for unexpected expenses.

Get Support in Managing Your Retirement Goals

Just as healthcare is your area of expertise, retirement planning is ours. Working with a financial advisor can provide the tailored support you need to maximize savings and minimize risk. With careful planning and professional guidance, you can feel confident about the future.

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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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