Practitioner Forum

Financial Education for Health Care Providers

Psychologists who attended a financial education seminar indicated in a postseminar survey that they had a greater understanding of their retirement benefit plan options and more confidence in choosing investment vehicles that would meet their goals.

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Health care provider (HCP) well-being has become a central topic as health care agencies increasingly recognize that stress leads to turnover and reduced efficacy. 1 Financial health of HCPs is one aspect of overall well-being that has received little attention. We all work at the US Department of Veterans Affairs (VA) as psychologists and believe that there is a need to attend to financial literacy within the health care professions, a call that also has been made by physicians. 2 For instance, a frequently mentioned aspect of financial literacy involves learning to effectively manage student loan debt. Another less often discussed facet is the need to save money for retirement early in one’s career to reap the benefits of compound interest: This is a particular concern for HCPs who were in graduate/medical school when they would have optimally started saving for retirement. Delaying retirement savings can have significant financial consequences, which can have a negative effect on well-being.

A few years ago, we started teaching advanced psychology trainees about financial well-being and were startled at the students’ lack of knowledge. For example, many students did not understand basic financial concepts, including the difference between a pension and a 401k/403b system of retirement savings—a knowledge gap that the authors speculate persists throughout some professionals’ careers. Research suggests that lack of knowledge in an area feels aversive and may result in procrastination or an inability to move toward a goal. 3,4 Yet, postponing saving is problematic as it attenuates the effect of compound interest, thus making it difficult to accrue wealth. 5 To address the lack of financial training among psychologists, the authors designed a seminar to provide retirement/financial-planning information to early career psychologists. This information fits the concept of “just in time” education: Disseminating knowledge when it is most likely to be useful, put into practice, and thus retained. 6


In consultation with human resources officials at the VA, a 90-minute seminar was created to educate psychologists about saving for retirement. The seminar was recorded so that psychologists who were not able to attend in-person could view it at a later date. The seminar mainly covered systems of retirement (especially the VAspecific Thrift Savings Plan [TSP]), basic concepts of investing, ways of determining how much to save for retirement, and tax advantages of increased saving. It also provided simple retirement planning rules of thumb, as such heuristics have been shown to lead to greater behavior change than more unsystematic approaches. 7 Key points included:

  • Psychologists should try to approximately replace their current salary during retirement;
  • There is no option to borrow money for retirement; the only sources of income for the retiree are social security, a possible pension, and any money saved;
  • Psychologists and many other HCPs were in school during their prime saving years and tend to have lower salaries than that of other professional groups with similar amounts of education, so they should save aggressively earlier in their career;
  • Early career psychologists should ensure that money saved for retirement is invested in relatively “aggressive” options, such as stock index funds (vs bond funds); and
  • The tax benefits of allocating more income toward retirement savings in a tax-deferred savings plan such as the TSP can make it seem cheaper to invest, which can make it more attractive to immediately increase one’s savings.


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