Disclaimer: The information provided in this article is meant for informational purposes only and should not be considered financial advice. You should consult a certified financial advisor who can advise you based on your unique financial situation.
One reason many healthcare clinicians pick travel jobs is to save for retirement—travel clinicians earn more than their permanent counterparts, meaning they can save even faster. Barton Healthcare Staffing knows this and is here to help with a 401(k) our clinicians can start contributing to on the first day of their seventh month with BHS. Our travel clinicians file taxes as W-2s and receive additional benefits such as health, dental, and vision insurance. Saving for your 401(k) makes you prepared for retirement early on, and allows your retirement savings to grow more due to interest. Read on to learn how to use your 401(k) as a travel healthcare clinician.
What is a 401(k)?
A 401(k) is a vehicle for investing toward your retirement that uses pre-tax income to build your savings. When you put money toward a 401(k) while you’re working and invest it into a retirement target fund, your money will accrue interest over time and build a nest egg for when you stop working. Be aware, since the money you’re putting into your 401(k) is pre-tax income, you cannot withdraw any money until you’re 59 1/2—take any money out prior to that and you will face a 10% tax penalty in most cases.
Why start a 401(k) as a travel healthcare clinician?
One reason many people choose to work as a travel clinician is to earn more so that they can retire faster. Putting aside money into a 401(k) is a great way to save and prevent yourself from overspending while you’re working. The earlier you start saving, the more you will gain from compound interest.
What platform does Barton use for its 401(k)?
Our pension plan partner is Empower Retirement, which you can access through its website or app. They make tracking your savings easy, and your 401(k) plan with Barton Healthcare Staffing offers you a range of investments so you can choose what’s right for you. Their retirement planner allows you to make a spending plan and learn how much you can actually save during retirement and to simulate how your plan would be impacted by a big event such as the dotcom crash or the 2008 recession.
How much can I contribute to my 401(k) plan?
The amount that you can contribute to your 401(k) depends on how much your employer allows you to contribute and how much the IRS allows you to contribute.
The maximum amount the IRS allows you to contribute changes annually due to inflation. As of 2024, the IRS allows you to contribute up to $23,000 annually to your employer’s 401(k) plan. Clinicians 50 and older can contribute what the IRS calls a “catch-up contribution” of $7,500, meaning that they can contribute a total of $30, 500.
How much should I contribute to my 401(k)?
In 2023, Americans contributed an average of almost $6,000—or 8% of their income into their 401(k)—according to Capitalize. However, the amount you contribute should vary based on your financial situation, age, and income. It’s generally a good idea to start contributing when you are debt free and have an emergency fund. As a travel allied health clinician, it may be a good idea to have a larger emergency fund than most—you might need to cover the gap between the last paycheck of your last assignment and the first paycheck of your next.
Contributing 10–20% of your income to your 401(k) is a good retirement goal for most people and the earlier you start saving for retirement, the more your fund will grow due to interest. If you are in your 40s or 50s and feel behind on your retirement savings, focus on contributing as much as you can to catch up.
Fidelity recommends having at least 6x your income in retirement savings by the time you are 50, and 10x your income by age 67. If you are currently behind on your retirement savings, it’s a good idea to save more, and take advantage of the catch-up contribution.
Find Your Next Travel Healthcare Job with BHS
Interested in taking advantage of our 401(k) plan as a travel healthcare clinician? Check out our open jobs and apply today!