Maximizing Pension and Retirement Benefits for Richmond Healthcare Workers

Few professions require as much investment—emotionally, mentally, and especially financially—as healthcare. You likely work long days that far exceed the traditional 40-hour work week, your hours are unpredictable, and you’re regularly required to perform in a high-stress environment. This, combined with such an extended educational track, means it’s not uncommon for healthcare professionals to begin saving seriously for retirement until they’re well into their 30s, 40s, and even their 50s. 

Factor in large student loan debt and early career salaries that may lag behind the level of responsibility, and it’s easy to see how saving for retirement is put on the back burner.

That being said, Richmond-based hospital networks generally offer generous retirement benefits and incentives that may be more comprehensive than those in other fields. As an employee with access to these benefits, using them in a thoughtful, coordinated way can help you catch up on missed opportunities to save while building lasting financial security.

Navigating the Benefits of Your Richmond-Based Hospital Systems

Richmond is home to a mix of public and private healthcare systems, including VCU Health, Bon Secours, and HCA Virginia. Each system offers its blend of retirement benefits, including defined benefit pensions, 403(b) and 401(k) plans, and supplemental savings programs. Depending on your employer and whether your hospital is for-profit or nonprofit, the details of your employer-sponsored plans (and other benefits) can vary widely.

For example, public healthcare workers may be enrolled in the Virginia Retirement System (VRS), a defined benefit plan that provides a pension based on years of service and final average salary (we’ll talk more on this in a minute). Meanwhile, nonprofit systems may offer 403(b) plans with employer matching, while for-profit institutions might use traditional 401(k)s.

Understanding what your projected benefits might look like is an essential first step if you aren’t yet familiar with your employer’s offerings.

Strategy #1: Understand Your Pension Plan

Defined benefit pensions have become increasingly rare, but some Richmond-area hospital networks still offer them. If you’re one of the fortunate few with access to a pension, it’s worth learning how your benefit is calculated.

Your healthcare system uses a pension calculation formula to determine this amount. The most common formula is:

Years of service x accrual rate x final average salary = Your annual pension payout

Let’s say you work for 30 years, your accrual rate is 2.5%, and your final average salary (typically calculated based on your last three to five years of service) is $100,000. Your annual pension would be:

30 × 2.5% (0.025) × $100,000 = $75,000 per year

While you can’t change your accrual rate (the hospital network determines this), you could potentially increase your projected pension payout by boosting your final average salary or working additional years. It may be worth considering your future retirement income when negotiating future promotions or salary increases, or considering changing jobs to a new network.

Another important consideration? Review whether your hours, especially if you’re part-time, impact your pension accrual. Some systems may reduce pension benefits for those who don’t meet full-time thresholds, but that doesn’t mean part-time employees can’t still benefit from the hospital network’s pension plan. Plan eligibility varies by network, so check with your human resources department to learn more about your offerings.

It’s also worth noting that hospital systems (especially nonprofit systems) are not immune to pension freezes. If federal budget cuts or internal cost-saving measures force changes, employers may freeze their pension plans, meaning no new benefits accrue from that point forward. While your previously earned benefits are usually preserved, your projected retirement income may be affected.

Strategy #2: Participate in Supplemental Retirement Plans for Healthcare Professionals

In addition to pension benefits, most Richmond hospital networks offer 403(b) or 401(k) plans that allow you to contribute pre-tax dollars toward your retirement. These retirement plan offerings give healthcare professionals a significant opportunity to build savings beyond their pension, especially if they anticipate their pension falling short of what they’ll need to retire comfortably (which is the case for most high-earning professionals). 

Some may also offer employer matching programs, though this is less likely for those participating in a pension plan.

If your network does offer employer matching, aim to contribute at least enough to get the whole match. Remember, you may need to stay in the hospital for some time to retain all employer matching benefits. If you leave before those benefits are fully vested, you may forfeit them but still retain any amount you contributed to the account.

Catch-up contributions are also available for late-career healthcare professionals, which can be especially beneficial since so many physicians get a late start to retirement savings (thanks to high student loan debt and lower initial earnings).

Remember that if you already have a pension, overfunding your tax-deferred accounts could create tax inefficiencies later in retirement. This is where working with a financial advisor can help, as they’ll be able to help you coordinate your pension income with your 401(k) or 403(b) contributions, Roth accounts, and other after-tax accounts.

Employer-Sponsored Health Savings Plans

If your employer offers a high-deductible health plan (HDHP), you may be eligible to contribute to a Health Savings Account (HSA). HSAs offer a powerful, tax-advantaged way to save for future medical expenses.

Their triple tax benefits include:

• Contributions are pre-tax
• Investments grow tax-deferred
• Withdrawals are tax-free if used for qualified medical expenses

Unlike Flexible Spending Accounts (FSAs), HSA funds don’t expire at the end of the year, and the account is yours even if you change jobs or retire.

Strategy #3: Learn What Insurance Options Are Offered 

In addition to providing employees with opportunities to invest toward retirement and save for other expenses, Richmond’s hospital networks offer employees additional benefits, like insurance policies (which can add tens of thousands of dollars in value to their compensation packages). 

While different networks, and even different positions within those networks, have different offerings, some standard employer-sponsored insurance plans and policies include:

• Medical, dental, and vision
• Secondary gap insurance
• Prescription drug plan
• Short-term disability insurance
• Employer-paid life insurance
• Accidental death and dismemberment insurance (AD&D)
• Liability insurance

If you’re unsure about your current enrollment or what’s available, check with your human resources department. 

In addition to obtaining coverage while employed, you can get specific policies extended into retirement. In most cases, coverage ends once you leave your job for good. But if you opt for a phased retirement, part-time employment, or take on a consulting role, it may be enough to qualify you to maintain access to certain benefits.

Strategy #4: Consider How You’ll Transition to Retirement

Quitting work “cold turkey” is more difficult than most people realize, especially for those who’ve spent decades building an esteemed career serving others.

Check with your hospital network for opportunities to pursue a phased retirement approach instead. 

Rather than leaving work abruptly, a phased retirement would enable you to slowly cut down your hours over time before eventually leaving for good. Many hospital networks find this gradual approach mutually beneficial since it gives them (and you) time to find replacements and train new personnel.

You may also find opportunities to remain involved in your field or facility by taking on a role teaching, mentoring, consulting, or serving on boards. 

If you’d like to get more engaged in the community on a philanthropic level, you could consider leaving your full-time job at the hospital network to pursue volunteer work. Or, if you have a more adventurous spirit, find opportunities to take your skills overseas or across the country to regions and people in need.

Strategy #5: Address Your Debt Before Retirement

Your employer may offer support if you’re still managing significant student debt or have other obligations (such as a mortgage or auto loan). Some Richmond hospitals provide loan repayment or forgiveness programs, housing benefits, or relocation assistance to help manage debt burdens.

If you’re still working to pay down debt or have debts like a mortgage or car payments, it’s essential to coordinate thoughtfully between paying down debt and contributing to retirement. Ultimately, you want to reduce financial pressure without compromising long-term investment growth.

Making the Most of Your Richmond Hospital Network Benefits

If you work in healthcare in Richmond, your career likely comes with a deep sense of purpose—and as we’ve discussed above, a robust compensation package. Between pensions, 401(k) or 403(b) plans, insurance benefits, and debt management programs, your employer likely offers several powerful tools you can use to build a more secure financial future.

At Partners in Financial Planning, we specialize in helping healthcare professionals across Virginia make more confident and strategic financial decisions that incorporate every aspect of their wealth. Whether you’re just beginning to explore your retirement options or want help coordinating all your benefits into a cohesive strategy, we’re here to help.