Nurse Pensions in the U.S.: What Healthcare Workers Need to Know in 2025

Do U.S. Nurses Have Pensions? Why Retirement Planning Matters More Than Ever for Healthcare Workers

For decades, a pension was the quiet promise behind long shifts and endless night calls. Work hard, show up, and when your career was done, you’d retire with a steady check for life.

But if you’re a nurse—or anyone working in healthcare today—you’ve probably noticed: things have changed.

In fact, as of 2025, most nurses in the U.S. won’t retire with a traditional pension at all. And many don’t realize it until it’s too late.

That’s the reality facing the nearly 4.1 million Americans turning 65 this year, including thousands of registered nurses and healthcare workers who’ve dedicated their lives to caring for others (American Association of Colleges of Nursing, 2025).

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Do Nurses in the U.S. Get Pensions? The Honest Answer

If you’re working in a government-run hospital, a VA facility, or military healthcare, chances are good you’ll still have a defined benefit pension—that old-school promise of lifetime monthly payments.

But for the majority of nurses in private hospitals, for-profit clinics, or even some nonprofit systems?

The pension is gone.

In its place:

401(k) plans (for private employers)
403(b) plans (for nonprofit hospitals and public health systems)
And increasingly, the responsibility to build your retirement savings falls directly on you.

Why This Shift Matters More Than You Think

Many nurses assume that because they have a retirement plan, they’re safe. But unlike pensions, defined contribution plans like 401(k)s and 403(b)s don’t guarantee a specific income after retirement. Instead, your retirement depends on:

How much you save.
Whether your employer contributes.
How your investments perform.

In other words: The security once guaranteed by a pension now depends on your planning. See the Finance Monthly 401(k) Explained Guide: The Only Retirement Guide You’ll Ever Need

What Exactly Is a Pension? (And Why You Probably Don’t Have One)

A pension—formally called a defined benefit plan—is simple in theory:

You work a certain number of years.
Your employer guarantees monthly payments when you retire, often for life.

But as costs climbed, many healthcare employers phased pensions out in favor of defined contribution plans like 401(k)s.

Why? Pensions are expensive for employers. 401(k)s are cheaper—and shift the financial risk to the employee.

Maria’s Story: A Nurse Without a Pension

Consider Maria, a registered nurse from Ohio who spent 30 years in the same hospital. She assumed, like her mother (also a nurse), that she’d retire with a pension.

Instead, she discovered her hospital had switched to a 403(b) plan years earlier. Her savings? Roughly $310,000 at age 65. Enough? Not really.

At a 4% withdrawal rate, Maria’s retirement account would give her about $12,400 per year.

“I thought I was safe,” she admits. “No one explained the difference.”

What Retirement Options Do Nurses Have in 2025?

How much should you save for retirement? Whether you’re an RN, LPN, or working in home health, here’s what you need to know:

1. 403(b) or 401(k) Plans

These are the most common retirement plans in healthcare today:

403(b): Offered by nonprofit hospitals.
401(k): Offered by private hospitals and clinics.

With both:

You contribute pre-tax income.
Your employer might offer a match.
Your money grows tax-deferred until you retire.

➡️ If your employer offers a match—contribute at least enough to get it. That’s free money.

2. Individual Retirement Accounts (IRAs)

Want more control? IRAs let you save outside your employer plan:

Traditional IRA: Pre-tax contributions, taxed at withdrawal.
Roth IRA: After-tax contributions, tax-free withdrawals.

Roth IRAs can be game-changers for healthcare workers needing flexibility later in life.

3. Cash Balance Plans (Rare but Worth Knowing)

Some hospitals still offer cash balance plans, a modern twist on pensions:

Employers contribute a set percentage of your salary.
Your account grows at a guaranteed interest rate.

Not common—but if you’re lucky enough to have one, understand how it works.

4. Deferred Compensation Plans (457(b))

For higher-earning nurses and healthcare managers:

Defer part of your salary now.
Pay tax on it later—likely in a lower bracket after retirement.

5. Social Security

Most nurses qualify for Social Security—but it’s unlikely to cover all expenses. It should be viewed as a foundation, not a solution.

How Much Should Nurses Save for Retirement?

Here’s a simple benchmark from Bank of America’s Financial Wellness Tracker:

By age 30: Save at least 50% of your annual salary.
By age 40: 2 times your salary.
By age 50: 4 to 5 times your salary.
By age 65: 8 to 10 times your salary.

Your savings will likely need to replace at least 40% of your pre-retirement income. Social Security helps, but you’ll still need your savings to fill the gap.

A Hard Truth for Healthcare Heroes

Many healthcare workers assume they’ll be taken care of in retirement. But unless you’re working for the government or a strongly unionized nonprofit, the pension safety net probably isn’t waiting for you.

Your future will depend on:

How much you save.
How consistently you invest.
Whether you plan early.

Final Takeaway: Caring for Others Is Your Job—Caring for Your Future Is Yours Too

Nurses spend careers caring for patients—but far too often neglect their own financial health.

Now’s the time to ask yourself:

What does my retirement plan actually look like?
Am I relying on benefits that don’t exist anymore?
What can I do today to protect my future?

Because after decades of night shifts and caregiving, you deserve a retirement that takes care of you.

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Nurse Pensions Frequently Asked Questions

Do nurses get pensions in the U.S.?
Some nurses in public or unionized roles still receive pensions. Most, however, now rely on 401(k) or 403(b) plans.

How much should a nurse save for retirement?
Experts suggest saving 8–10 times your final salary by age 65.

What is a 403(b) plan for nurses?
A retirement savings plan typically offered by nonprofit hospitals. Nurses contribute pre-tax income, and employers often match part of their contributions.

Is Social Security enough for retired nurses?
Unlikely. Social Security can help, but most nurses need personal savings to fund a comfortable retirement.

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