Saving for Retirement as a Traveling Nurse

Travel nursing is more than a succession of 13-week assignments. It's an opportunity to save money for the future.

Travel nurses might have had an excuse not to save in the past when travel companies rarely offered retirement benefits. But today's travel companies are emphasizing benefits packages to attract traveling nurses. Not only are many providing the investment vehicles, but some are also giving away "free money," in the form of matching contributions, to those who invest. Combine 401K contributions with another investment option, such as an IRA, and you're paving the way for a comfortable retirement, experts say.

Many Cross Country travelers also supplement their retirement savings with individual retirement accounts. With traditional IRAs, contributions are tax-deductible and earnings grow tax-deferred. A Roth IRA is an alternative to the traditional IRA vehicle. The Roth IRA is not tax-deductible, although earnings on it are tax-free. In other words, the person investing in the Roth IRA would pay taxes today but enjoy the IRA tax-free at retirement.

Travelers should take advantage of investment vehicles even if companies don't match their contributions. Employees might have investment options when making their contributions to a corporate 401K, and should focus on diversification, which could include purchasing some company stock and investing in mutual funds to offset risk. Travelers can find out more about their options by calling the "broker of record" on the plan. Using a toll-free number or the Internet, employees can often access basic plan information about where their money might be allocated. They can then — depending on their risk tolerance and goals—set up their portfolios.

IRAs are an option even if travelers are contributing to a 401K. Employees often benefit with being able to deduct the maximum allowed amount on their IRAs. And if travelers are 50 or older, they can contribute more and take advantage of the tax savings.

For most people, there are three things that will determine financial quality of life after retirement. One is the savings that people accrue throughout their lives — outside of tax deferred and other retirement vehicles. Another is retirement savings. And the third is social security.

Travelers looking to maximize their investments without assuming too much risk should begin contributing early; lower their risk using diversification; and sit tight, without getting too caught up in the ups and downs of the market.