The 10-Step Pre-Retirement Checklist for CRNAs and Nurse Practitioners
Most CRNAs and nurse practitioners spend their careers focused on the accumulation phase, which involves saving as much as possible in 403(b) or 401(k) accounts. However, as you approach the five-year mark before your target retirement date, the strategy becomes more important than the savings rate. This window is the most critical period for your financial future. Use these 10 steps to help set you up for a happy retirement.
1. Set a Specific Target Retirement Date
Sometime in your early sixties is a goal, but it is not a plan. You need a specific date because every other piece of the puzzle, such as Roth conversions, health insurance, and Social Security, depends on this timeline.
2. Identify Your True Retirement Spending
You do not need to replace your entire income; you need to replace your spending. Costs like 403(b) contributions, payroll taxes, and perhaps your mortgage will disappear. Use a budgeting app for 12 months to find your foundation number.
3. Take a Full Account Inventory
Organize your assets by tax type, including tax-deferred accounts like a Traditional IRA or 403(b), tax-free accounts like a Roth, and taxable brokerage accounts. Many high-earning CRNAs and NPs find that 80% or more of their wealth is trapped in tax-deferred accounts, which creates a significant future tax liability.
4. Solve the Pre-Medicare Health Insurance Gap
If you retire before age 65, you do not qualify for Medicare yet. You must have a plan for health insurance, with options including COBRA, your spouse’s plan, or the Health Insurance Marketplace. Researching these costs early prevents a price shock in your first year of retirement.
5. Understand IRMAA and Medicare Costs
High-earning nurses often face Income-Related Monthly Adjustment Amount (IRMAA) surcharges if their income is too high. Because Medicare premiums are based on your income from two years prior, a high salary at age 63 can lead to hundreds of dollars in extra monthly costs at age 65.
6. Optimize Your Social Security Timeline
Every year you delay Social Security past your full retirement age, your benefit increases by a guaranteed 8% per year. For many clinicians, waiting until age 70 can result in a monthly benefit that is 24% higher than taking it at age 67, providing better protection for a surviving spouse.
7. Leverage the Golden Years for Roth Conversions
The gap years between stopping work and starting Social Security are ideal for Roth conversions. Moving money to a Roth account now can reduce future Required Minimum Distributions (RMDs) and prevent you from being pushed into higher tax brackets later in life.
8. Build a Strategic Withdrawal Plan
The traditional advice to spend taxable accounts first is often wrong for high-earning CRNAs and NPs. A smarter approach involves pulling strategically from different accounts each year to stay within lower tax brackets and avoid IRMAA thresholds.
9. Consolidate and Simplify
Retirement is complex enough without managing accounts at five different institutions. Consolidating old 401(k)s and simplifying your portfolio into a few low-cost index funds makes rebalancing and tax management much easier.
10. Update Your Estate and Beneficiary Designations
The beneficiary designation on your retirement account overrides what is written in your will. If you have an ex-spouse named on an old account, they will receive that money regardless of your will. Reviewing your primary and contingent beneficiaries with an advisor ensures your wishes are current.
Retirement Planning for CRNAs and NPs
The five-year window is a precious opportunity to move from saving to planning. By addressing these ten areas, you can retire with the confidence that your healthcare, taxes, and income are fully optimized. Don’t leave your retirement to chance; it’s time to secure the lifestyle you’ve worked so hard to build.
Ready to see how Oak Capital Advisors can turn retirement planning questions into answers? Schedule a meeting.
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