Retirement planning breaks the standard playbook the moment you take your first travel contract. A staff nurse enrolls in one 401(k), gets a match, and lets payroll handle the rest for thirty years. A travel nurse might work three or four agencies in a single year, and a nurse working 1099 contracts has no employer retirement plan to enroll in at all — the plan, the contributions, and the paperwork are entirely on you.
How much you can save, and how, depends on whether you work W-2 or 1099. W-2 agency employees may or may not get a 401(k) with a match, depending on the agency and your tenure. 1099 contractors get no employer plan and have to build their own, typically through a SEP IRA or Solo 401(k). If you haven't settled on W-2 or 1099 status yet, run the numbers through our W-2 vs. 1099 calculator — see our full W-2 vs. 1099 breakdown for the full comparison — the retirement gap is one more factor in that decision. Our beginner's guide to travel nurse taxes covers the basics if you're just getting started.
Why Retirement Savings Is Harder for Travel Nurses Than Staff Nurses
A staff nurse's employer handles enrollment automatically, and the plan rarely changes. A travel nurse's situation resets with every contract: a new agency can mean a new plan, a new waiting period, and a new match formula — if one exists at all. Some large agencies offer a 401(k) from day one; others require a minimum tenure, and smaller agencies may offer none. For 1099 travelers, there's no agency plan to track down in the first place, because self-employed people build their own retirement infrastructure from scratch.
W-2 Travelers: Agency 401(k)s, Vesting, and What to Do Between Contracts
If your agency offers a 401(k), the mechanics work like at any employer: you elect a percentage of pay to defer, and the agency may match part of it. The catch is eligibility. Federal law lets an employer require up to one year of service and a minimum age of 21 before an employee must be allowed to participate, and many staffing agencies build plans around that limit. Switch agencies between 13-week contracts and you can spend most of a year working without becoming eligible anywhere. When comparing an offer with an immediately vesting match against one that pays more per hour with no match, run both through our contract analyzer to see which offer actually nets more.
Even once you're eligible, an agency match usually vests on a schedule rather than belonging to you immediately. Plans can use cliff vesting — 0% for two years, then 100% in year three — or graded vesting, where your stake grows a fixed percentage each year. Leave before you're fully vested and you keep everything you personally contributed, but you forfeit the unvested match. Check this before accepting a short assignment: a bigger match on paper isn't worth much if you won't stay long enough to vest into it.
None of this means an old agency 401(k) needs to be cashed out when a contract ends. Cashing out triggers ordinary income tax on the full balance plus a 10% penalty if you're under 59½ — one of the most expensive mistakes a traveler can make. Instead, move the balance through a direct rollover into an IRA or a new employer's plan, with no tax withheld. A trustee-to-trustee transfer is cleanest; a 60-day rollover works too, but 20% is withheld automatically and you'd need to cover that out of pocket to roll over the full amount. Many travelers eventually consolidate old 401(k)s into a single rollover IRA rather than tracking scattered accounts from former agencies.
1099 Travelers: SEP IRA vs. Solo 401(k) — and Why the SE Tax Base Matters
A 1099 traveler has to open a retirement account independently, and the two most common choices are a SEP IRA and a Solo 401(k), also called a one-participant 401(k). A SEP IRA is the simpler of the two: you can contribute up to the lesser of 25% of compensation or $72,000 for 2026, with compensation capped at $360,000. There's no employee-deferral layer — the whole contribution is an employer contribution, which for a self-employed person comes out of net self-employment earnings.
A Solo 401(k) adds a layer a SEP IRA doesn't have. Alongside an employer-style profit-sharing contribution calculated the same way as a SEP's, you can also defer up to $24,500 of your own income for 2026 (more if you're 50 or older) — the same limit that applies to a W-2 employee's 401(k). Both pieces count toward the same combined 2026 cap, but because the employee deferral is a flat dollar amount rather than a percentage of income, a Solo 401(k) generally lets a self-employed nurse save significantly more than a SEP IRA at the same income, as the example below shows.
One detail trips up 1099 travelers doing this math themselves: neither account lets you contribute a straight 25% or 20% of gross Schedule C income. The compensation figure the IRS uses starts with net earnings from self-employment, reduced by the 92.35% self-employment adjustment, then by the deductible half of your self-employment tax. Only then does the effective 20%-of-compensation rate — the self-employed equivalent of a 25% employer rate — apply. That's the same net self-employment income base behind your self-employment tax bill, and getting it right keeps your retirement math accurate instead of overstated.
A Side-by-Side Example: $80,000 in Net Self-Employment Income
Take a 1099 travel nurse with $80,000 in net profit on Schedule C, under age 50. Applying the self-employment adjustment (multiplying by 92.35%) puts net earnings from self-employment at $73,880. Self-employment tax on that amount, at 15.3%, comes to roughly $11,304, and half of that — about $5,652 — is deductible, leaving $74,348 as the compensation base retirement contributions are calculated against.
A SEP IRA contribution, using the 20% effective rate the circular math resolves to, tops out around $14,870 — well short of the 25%-of-income figure the headline rules imply. A Solo 401(k) starts from that same $14,870 employer-style contribution and adds a full $24,500 employee deferral on top, since $74,348 in compensation comfortably supports it. That brings the Solo 401(k) total to roughly $39,370 — about $24,500 more than the SEP IRA allows, and that entire gap is the employee deferral a SEP IRA simply doesn't have. Both totals fall well under the $72,000 combined 2026 limit, so at this income level the Solo 401(k)'s real cost is the extra setup versus a SEP IRA, which most brokerages let you open in minutes.
Frequently Asked Questions
Can I contribute to a W-2 401(k) and a SEP IRA or Solo 401(k) in the same year?
Yes, if you split the year between W-2 and 1099 work, or work both at once. But the $24,500 employee-deferral limit for 2026 applies across all your 401(k)-type plans combined — not separately per plan. Employer-side contributions, like an agency match or a Solo 401(k)'s profit-sharing piece, are tracked separately.
What happens to an agency 401(k) match if I leave before I'm vested?
You forfeit the unvested portion. Your own contributions are always 100% yours, but any employer match you haven't vested into stays with the plan when you leave — check a plan's vesting schedule before assuming a bigger match beats a smaller one for a short assignment.
Can I contribute to a personal IRA on top of a SEP IRA or Solo 401(k)?
Yes. SEP IRA and Solo 401(k) contributions are separate from the $7,500 limit on personal traditional or Roth IRA contributions for 2026, though Roth IRA eligibility phases out at higher income levels.
Is a Solo 401(k) worth the extra paperwork compared to a SEP IRA?
For most 1099 travelers, yes — the added employee deferral usually outweighs the modest extra setup. A Solo 401(k) requires filing Form 5500-EZ once assets exceed $250,000; a SEP IRA never does. At very high income, where the employer-side contribution alone approaches the $72,000 cap, the two accounts converge and the SEP IRA's simplicity can win out.
Disclaimer: This article is for educational purposes only and is not tax, legal, or financial and investment advice. Retirement account rules, contribution limits, and self-employment tax calculations depend on individual facts and circumstances. Consult a CPA, enrolled agent, or financial advisor who is familiar with travel healthcare taxation before choosing or funding a retirement account.