Despite having one of the highest-paying occupations, some medical professionals are struggling to save enough for a comfortable retirement due to competing priorities.
A new report out by the TIAA Institute, “Retirement Readiness in the Healthcare Sector,” found that while 91% of hospital and healthcare system employees are saving in employer-sponsored plans, 45% are saving less because of debt, including student loans. Eighty-five percent of medial professionals say they are currently in debt.
As a result, 34% do not believe they are saving an adequate amount, and 28% do not think they will have saved enough to live comfortably throughout retirement. Another 24% are not sure they’re investing their savings properly.
“We know that student loan debt affects retirement confidence because paying off loans gets in the way of saving. And those with debt are more likely to tap into their savings before retiring, creating a vicious circle,” said Surya Kolluri, head of TIAA Institute.
TIAA’s research found that within the last two years, 51% of medical professionals have sought out professional retirement planning advice, a move that has changed confidence levels for some. Of those who received advice, 26% say they are “very confident” in their ability to live comfortably in retirement, and 47% of those who have followed all of their advisor’s guidance reported feeling more assured.
These respondents were also likelier to annuitize their savings, with 58% of healthcare employees stating their likeliness to use guaranteed lifetime income products. Among those unlikely to annuitize, 67% rated “not outliving financial assets” as a high financial priority for retirement, signaling a potential change in attitude in the future, finds TIAA.
“In-plan annuities can be a real confidence booster for retirement savers,” added Jim Mullery, head of institutional relationship management at TIAA. “They are a great option for creating a source of guaranteed income to protect against retirement risks such as longevity risk, cognitive risk, and market volatility.”
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.