US nurses often have better retirement plan options than they realize. Nonprofit hospitals usually offer a 403(b), for-profit employers offer a 401(k), and many government and some nonprofit hospitals also offer a 457(b). Used well, these can set you up for a very comfortable retirement.
2026 contribution limits
| Plan | Employee limit | Age 50+ catch-up | Ages 60–63 catch-up |
|---|---|---|---|
| 401(k) | $24,500 | $8,000 | $11,250 |
| 403(b) | $24,500 | $8,000 | $11,250 |
| Governmental 457(b) | $24,500 | $8,000 | $11,250 |
| IRA (Traditional or Roth) | $7,500 | $1,100 | Not applicable |
The ages 60–63 catch-up replaces the regular $8,000 catch-up for those ages.
The 457(b) superpower
Here's what many nurses miss: the 457(b) limit is separate from the 401(k)/403(b) limit. If your employer offers both a 403(b) and a 457(b), you may be able to contribute the full amount to each, potentially $49,000 in 2026 before catch-ups.
Another perk: money in a governmental 457(b) can generally be withdrawn after you leave that employer without the usual 10% early withdrawal penalty, even before age 59½. That makes it useful for nurses who might retire early or step back from bedside work.
Watch out: a non-governmental 457(b) (offered by some nonprofits) works differently. The money technically belongs to your employer until it's paid out, and it can be at risk if the employer has financial trouble. Read your plan documents carefully.
Traditional or Roth?
- Traditional: lowers your taxable income now; you pay tax when you withdraw. Good if your income is high now, for example with lots of overtime and premiums.
- Roth: no tax break now, but qualified withdrawals are tax-free. Good early in your career or if you expect higher income later.
Many nurses use a mix. If you're aiming for PSLF, traditional contributions can also lower the income used to calculate income-driven loan payments.
A smart order of operations
- Contribute enough to get your full employer match. It's free money.
- Build an emergency fund.
- Pay off high-interest debt, like credit cards.
- Increase contributions toward the maximum, adding a 457(b) if available.
- Consider an IRA (Roth or backdoor Roth, depending on income).
Check the fees
Some hospital 403(b) plans still offer high-fee annuity products. Look for low-cost index funds or target-date funds in your plan's menu. A 1% difference in fees can cost tens of thousands of dollars over a career.
The bottom line
Grab your match, check for a 457(b), keep fees low and increase your contributions every time you get a raise or a big overtime month.
Planning your contributions around overtime? Estimate your pay with the free Nurse Shift Pay Calculator.
This article is for general education and isn't financial or tax advice. Limits are IRS figures for 2026; check your plan documents for your employer's rules.