Life as a CRNA

It’s an amazing feeling, isn’t it? You’re finally done with school. You passed boards and now you’re working your first job as a CRNA. After two weeks, you get that first paycheck and it feels great. All that time and energy you put into school has paid off and now you just want to party. Well, that’s fine and dandy and of course, you should be able to celebrate. However, I would exercise caution because if you still have student loans and/or other pre-existing debt to deal with, whatever pay you’re receiving now as a newly minted CRNA will quickly dwindle because of these bills.

Add to the equation the need to save for retirement and you’ll quickly realize how little you really have. The funny thing about doubling your salary from an RN to a CRNA is how you realize how little you actually knew about personal finance. I will be the first to admit that my knowledge about finances was nil when I first started out as a CRNA.

It’s easy to forget about retirement, but trust me, it’ll arrive a lot sooner than you realize. You’re now in the top 10% on income earners in the US. This post is meant demonstrate how you’re actually saving money when you decide to max out your contributions to your retirement plan whether it’s the 401(k), 403(b), and/or 457(b).

Say you only have 1 retirement plan, the 401(k). At the very least, you should be maxing out this plan. At $18,000 a year, you should be able to set aside $1,500 month to your 401(k). For the purpose of this discussion, let’s keep the math simple and make some assumptions. I’ll show you how you’re saving $6,000 a year by maxing out your 401(k) contribution.

Example 1
Annual Salary: $180,000
401(k) Contribution: $0
Taxable Income: $180,000

Example 2
Annual Salary: $180,000
401(k) Contribution: $18,000
Taxable Income: $162,000

As you can from Example 1, the total income tax amount is $62,224. That’s if you’re making $180,000 and decide to not contribute to your retirement. However, in Example 2, if you decide to max out your contributions at $18,000, your total income tax liability is $55,979.

Notice the income after tax amounts with both examples. By not choosing to maximize your retirement, you’re actually taking home LESS money. In Example 1, your take home pay is $117,776. In Example 2, your take home pay is $124,021 AFTER you’ve contributed $18,000 to your 401(k). Additionally, you’re pocketing $6,245.

You’ve effectively taken one step closer to securing a decent retirement while also taking home MORE money at the present moment! So, moral of the story, it pays to save for retirement…in more ways than one!