Planning for what lies ahead.
- According to the American Nurses Association, 500,000 experienced RNs are projected to retire by 2022.
- Retirement is a major life transition that can lead to opportunity and self-satisfaction but shouldn’t be viewed as a one-size-fits-all model.
- Many nurses choose to work past retirement age as the new extended work life model encourages a transition period of planning at the end of a long career rather than responding to a date on the calendar.
Approximately 1 million nurses will retire or contemplate retirement in the next 5 to 10 years. According to the National Council of State Boards of Nursing, the average age of working U.S. nurses is 51 with about 50% over 50. Some nurses who choose to retire will launch second careers, engage in volunteer work, or work part-time. Others plan fastidiously and count down until the moment they’re liberated from work responsibilities so they can travel, relish leisure time, seek self-fulfillment, and cultivate friendships outside of professional networks.
If you’re one of these nurses considering retirement, you may experience some conflicting emotions. Focusing on financial planning is important, but preparing psychologically and emotionally is just as crucial and ultimately can guide how you use your retirement assets. Retirement is no longer an abrupt transition from full- to part-time work or to full-time leisure. It’s a major transition to a new phase of life and offers the opportunity for each individual to transition into the “third age” with fulfillment and meaning.
As with most things in life, there is no “typical” way to retire and no one-size-fits-all, evidence-based, best-practice plan. In the past, many people entered the workforce in early adulthood and stayed with one employer for the duration of their career. A retirement party occurred around age 65, and the retiree was handed a gold watch or equivalent gift along with a company pension.
Today, a “flexible career” consisting of integrated work, education, family leave, and career advancement that’s staggered and overlapped recognizes that life transitions don’t occur for everyone or in the same order. Flexible careers offer the opportunity to meet the needs and goals of the individual as life circumstances evolve, reflecting the values and priorities of each person throughout their career.
Extended work life
According to the Organization for Economic Co-operation and Development, the average 65-year-old man can expect to live another 18.1 years and the average 65-year-old woman another 20.7 years. The Social Security Administration reports that one out of three 65-year-olds will live to at least age 90 and one of seven will live to at least 95. Longer lives have resulted in a relatively new phenomenon called extended work life, prompting study and discussion of the implications for workers, employers, and society at large.
The fortunate nurse approaching retirement age has accumulated many beneficial psychological traits, including increased acceptance and self-understanding, less reliance on the approval of others, increased coping skills, and enhanced creativity and confidence. This privileged situation can result from having an educational degree, a significant work history, a stable family life, and an income that’s increased over a lifetime. However, even nurses in this situation may face challenges. Retirement from a lifelong career of caring, commitment, and service to others may lead to higher self-expectations and a continuing need to find meaning. As a result, many nurses who have the financial resources to retire may choose to work beyond retirement age.
Savvy employers use and maximize the skills of mature nurses by providing career options, seamless transitions, and supportive practice environments—including flexible hours, shorter shifts, wellness programs, and a range of benefits—during all stages of their careers. Keeping older nurses in the workplace can help address insufficient staffing, which can impact job satisfaction and cause other nurses to change professions or leave jobs at a time when skilled nurses are critically needed to provide care for patients with complex needs.
Some older nurses stay on the job for financial reasons while others continue to work out of preference, enjoying high levels of job satisfaction and the social relationships they’ve developed with colleagues. Others may fear losing status or the title that allows them to shape the future of their organization through leadership and mentorship. Most nurses who continue to work past retirement age find meaning in their work, using their commitment to their jobs to enrich and fulfill their life’s purpose.
Those confronted with forced or semi-forced retirement as a result of failing health, organizational downsizing, or family caregiver responsibilities, may have to make some quick decisions. Age discrimination and forced retirement policies may mandate that some nurses withdraw from work-related roles, accelerating the process of disengagement with little time for adjustment. Bell suggests that evidence-based education for employers about the benefits of the extensive knowledge and experience older nurses bring to the workplace can inform the development of retirement policies and procedures that ensure ongoing employment, regardless of age, for nurses who wish to continue their careers.
For nurses with time to plan, the prospect of an early or timely retirement with a properly sized financial portfolio and social security benefits appeals to them when they reach the current full retirement age of about 67 years or even before at 62 years (without full social security benefits). A certified financial planner can help determine retirement portfolio size to support a nurse’s desired lifestyle. The 4% rule suggests that 4% of retirement assets can be withdrawn the first year of retirement and then adjusted yearly for inflation, changes in health, downsizing, loss of a spouse or partner, or other significant lifestyle events. Healthcare costs in retirement can be significant. Even with Medicare, co-pays, premiums, out-of-pocket expenses, and coverage exclusions can mount up. Vanguard projects that an average 65-year-old woman should plan to spend about $5,200 annually on healthcare throughout her retirement. (See Strategic planning.)
Many nurses continue to work into their 70s and 80s, although they’re financially secure enough to retire, because they enjoy their jobs and interactions with their coworkers. The larger pool of older workers may explain the 30.2% labor force participation rates for individuals between 65 and 74, with most working full-time. Many mature nurses continue to contribute to society in their professional careers and have served in a variety of roles, including direct care, administration, research, and education. Some, despite their chronologic age, will say, “I’m too young to retire,” recognizing that they’re at the height of their professional and personal abilities and wishing to continue to contribute within their designated roles.
As an additional incentive, even for those with adequate retirement savings, working past the traditional retirement age can improve finances by delaying the social security benefit. For each year beyond full retirement age that the benefit is not taken up to the age of 70, an additional 8% will be added to the monthly lifetime payment. For those in good health who enjoy their jobs and like being busy, continuing to work may be the best option. The institutional knowledge, wisdom, and experience of the retiring nurse can be a true loss to the healthcare system and to the new nurse or student who may have benefited from receiving sage advice, leadership, and mentorship offered by the retired nurse.
Choosing the right age to retire is important from a financial planning perspective; however, social and psychological factors also influence the decision. In preparation for retirement, consider how to balance the need for meaningful engagement with sufficient time for enjoyment, recreation, and personal fulfillment. (See Should I stay or should I go?)
Finding meaning and purpose
For those who are fortunate enough to be healthy, have established and enjoyed successful careers, and have planned financially for the future, the decision to continue to work or retire is one based on individual goals and a desire to engage in activities that bring purpose and meaning to life. Life’s uncertainty can reinforce the value and richness of each day. Carrying this perspective forward can help inform decisions related to retirement and post-retirement life choices with an ongoing sense of meaning and purpose.
Patricia A Tabloski is an associate professor at William F. Connell School of Nursing, Boston College in Boston, Massachusetts.
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