The Single Biggest Advantage of Travel Therapy

Written by: Jared Casazza, PT, DPT


In the past I’ve written several articles on the financial advantages of being a travel therapist and how those advantages have allowed Whitney and me to embark on an alternative lifestyle full of international travel. In fact, I’ve always made it known that the financial aspects of being a travel therapist are the biggest reasons I was so dead set on going down the path of travel therapy even two years prior to graduation. However, there is one even bigger advantage that I’ve been thinking a lot about lately that is even more important to me than making more money… and that is flexibility.

The Many Faces of Flexibility

Flexibility as a travel therapist comes in many forms. There’s the flexibility to take extended periods of time off.

  • I’m currently writing this after last working over 6 months ago.

There’s the flexibility to try out different settings for a three month stint to see if you have any interest in that area.

  • I’ve now worked in outpatient ortho, acute care, home health, skilled nursing, and wound care while traveling.

There’s the flexibility to choose to invest money instead of paying down student debt.

  • This is primarily due to travel therapists having lower taxable income meaning a lower monthly income based payment due each month. And this is the path I’ve chosen for my own finances.

There’s even the flexibility to decide if pay or travel location is more important to you for the next three months and to change your mind about that decision after each assignment.

  • Occasionally these two coincide, but generally higher paying contracts are in less desirable areas.

Flexible Time Off

Starting out traveling as a new grad, I was most concerned about making as much money as possible to offset my student loan debt (and in my case, start investing heavily early in my career). For that reason, pay was the primary consideration for me, but I’ve recently found that the flexibility to take time off is even more important. These things go hand in hand to some degree, because without making so much more money as a traveler, it would be difficult to take extended time off of work, but the flexibility goes beyond that.

If I had taken a permanent job out of school, there’s little doubt it my mind that I also would have saved a large percentage of my income despite the lower total pay at a permanent job. After a couple of years, I would have likely had enough saved to take an extended trip out of the country, but because of the nature of a permanent position this would have been impossible. After all, it’s difficult to find a permanent employer in healthcare that is willing to let an employee take two consecutive weeks off, much less 5 months! So to me, the flexibility in time off allowed by travel therapy is huge.

Flexibility to Try New Settings

The flexibility to try out different settings is something that I didn’t know at first would be a benefit of traveling. I was always most interested in outpatient ortho as a student and undoubtedly would have taken a permanent job in this area had I not decided to travel. Whitney with her Athletic Training background was 100% in agreement with me in this area. To my surprise, after taking a couple of contracts in other areas, I found that I actually really enjoy home health and even wound care!

As a student, wound care was something that I was terrified of, and I would have never willingly taken a job with that requirement if it wasn’t for knowing it was only for three months. Home health is an area that I started to become interested in, but I most likely wouldn’t have taken the leap into trying it out at a permanent job due to fear of the unknown. As a traveler, it is much easier to get over that fear when you have a predetermined end date that you know will be there pretty quickly if it turns out you really don’t like the job (this was skilled nursing for me).

Flexibility to Invest Instead of Paying Down Debt

I’m not sure if investing instead of paying off my debt is something that I would have done if I had taken a permanent job, but there’s no doubt that it’s more feasible as a travel therapist. The biggest reason is that with a lower taxable pay as a travel therapist comes a lower income based student loan payment. Ordinarily, this wouldn’t be a big deal, but when using the REPAYE income based repayment plan, this becomes more important.

The reason is that under REPAYE, half of the accumulated interest each month is subsidized, which ends up being a massive benefit for travel therapists who choose an income driven repayment plan. For me, this is the difference between having an effective interest rate of 6% on my loans versus an effective interest rate of 3.2%. Or, to put this in different terms, it’s the difference between my student debt growing at $500/month versus growing at $266/month.

If you take into account that the stock market returns on average 7-10%, then you can see why investing your money to get that return instead of paying off low interest debt at 3% would make sense. Having the interest accumulate much more slowly makes investing instead of paying down my student debt a no-brainer in my current situation.

Flexibility to Choose Between Pay and Location

Since the primary motivator of travel therapy for Whitney and me was pay, to this point we’ve always chosen to take higher paying travel contracts in rural areas. In addition to the higher pay, we like the slower pace, caring people, and lower cost of living that goes along with traveling to rural areas. Although rural areas are great for us, they lack the excitement of being closer to bigger cities and more desirable areas.

In the future, as money becomes less and less of a motivating factor for us as we approach financial independence, location is likely going to become more important. For example, we’ll likely sacrifice pay and low cost of living at some point to take travel assignments in Hawaii and southern California, which is something that we would never have done three years ago when starting out.

Take Home Points

It’s inevitable that priorities change throughout one’s life. The many different forms of flexibility offered by travel therapy have made pursuing these changes in desires and priorities much more feasible for Whitney and me. Starting out, we never would have guessed that some day we would value being able to take 5 months off to travel around the world, being able to experiment with different settings, or being able to try out the city life without committing to it long term. Travel therapy has given us the ability to do all of the above due to the flexibility, and that has been priceless!

 

jared doctor of physical therapy

Author: Jared Casazza, PT, DPT – Traveling Doctor of Physical Therapy – Aggressively seeking Financial Independence early in his career

Opinion: How Much Vacation Is Too Much?

Written by Travis Kemper, PT, DPT


What is your dream vacation or retirement? For most of our country, it seems the goal of working is to retire, and retirement means an endless vacation doing whatever we want. Julia and I took an eye-opening vacation recently while on break between our Travel Physical Therapy positions in New Mexico and Arizona. We went to Hawaii, more specifically Maui and Oahu, for nearly three weeks to relax, hike, swim, surf, snorkel, etc. — as well as see some friends that are living there.

This seemed like an ideal vacation, and it was for about 10 days, but then something unexpected happened. Even with being active throughout the days in the water and hiking, we both found ourselves with achy bodies. More importantly, we found ourselves unfulfilled in an amazing destination; we felt as though we didn’t have a purpose.

We concluded that for us, all future extended vacations will need to be a combination of “voluntourism” and exploration to allow us to have a purpose, help people, and see beautiful parts of the world. This is something we both knew we would want to do in the future anyway, but we were both surprised to find that it will be necessary for our vacations to be fulfilling. We realized, that while we are still going to pursue financial independence so that we don’t need to punch the time clock in the future, we will likely never truly retire.

One great thing for us is that we have found a profession that allows us job flexibility, so that we may never have to truly “retire,” and that is Travel Physical Therapy. This has allowed us the opportunity to still work and feel as though we have a purpose, while getting to travel around to different parts of the country and go on endless adventures. Additionally, we have the opportunity to take time off whenever we want to or feel like we need a change, such as a week to a few weeks between contracts to explore a new area, go on a volunteer trip, or rest and recharge.

We are very fortunate to have this as a career option, so we don’t see ourselves with the urge to “retire” anytime soon, despite the fact we are saving and working toward financial independence.

In my opinion, travel therapy gives us the perfect work-life balance. I feel that a life of endless vacation would be unfulfilling; but a life where I have many options to work, not work, volunteer, take time off, travel, vacation— whatever I want, that’s a great life.


What’s your take on this? Do you think endless vacation would be great, or not? Where does travel therapy come into play for you? Let us know!

 

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Author: Travis Kemper, PT, DPT

Can You Make a Career Out of Travel Therapy?

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Written by: Jared Casazza, PT, DPT

Different Types of Travel Therapists

The majority of therapists choose to pursue travel therapy for somewhere between 1-2 years. There are a variety of reasons for why this is the case, but for many it is due to either (1) wanting to break up the monotony that is usually a part of permanent positions, or (2) to make extra money to pay down debt more quickly. It’s also sometimes a combination of both of these things that causes a therapist to become interested in traveling.

There are some exceptions to this though. Some therapists choose to be “career travelers,” and never truly “settle down” into a permanent job. It’s possible to make a full time, or part time, career out of only working travel jobs. That could mean traveling continuously around the country to various locations, year round, taking about four 13-week contracts per year with minimal time off between contracts, or taking a more laid back approach with 2-3 contracts per year and more time off.

We here at Travel Therapy Mentor definitely consider ourselves Career Travelers. Let me tell you a little more about my and Whitney’s career path as travelers.

Our Plan

We were originally interested in travel therapy for both of the reasons mentioned above (higher pay to pay down student loans, and avoiding the monotony of a permanent job). We initially planned to travel for 4-5 years to not only pay off debt, but to save enough money to have a decent nest egg of investments. After the 4-5 years, we planned to settle down and work a permanent job in either our favorite travel location or possibly back in our hometown.

Right before graduation and beginning to travel is when I developed a strong interest in personal finance and investing, and I discovered that investing instead of paying down our student debt (opting for income driven repayment of student loans) was actually the better choice for me, and Whitney agreed with my analysis. Since our student loan payments are extremely low while traveling and on the REPAYE income based repayment plan, we had a lot of extra money to put toward investment and retirement accounts.

After a couple years of saving and getting good investment returns, it became clear that if we just traveled full time for a few years, we could then easily live off of 1-2 travel assignments per year combined with investment returns, rather than settling down to a permanent, full time job after we “finished” traveling. So, that became our new plan, at least for the forseeable future! In later years, we may still choose to “settle down” somewhere, and take part time/PRN jobs in one location. But for now, we’re loving the 1-2 travel contracts per year!

Our “Semi-Retirement”

Only working 1-2 travel assignments per year (which we are now currently doing) allows us a ton of flexibility to travel internationally and also enjoy more time with family, which were two things at the top of our list of priorities. We consider this a “semi-retirement” since we have 6-9 months per year free to do whatever we want each year!

As a traveler, it is actually possible in many cases to make about the same amount as a full time permanent therapist when only working two contracts per year due to the higher pay and lower taxable pay. So even with all of the free time, we are still able to make plenty of money to support ourselves, and our adventures!

With this in mind, I think making a career out of being a travel therapist is a great lifestyle choice that would work for many adventurous people that aren’t excited about settling down somewhere ‘permanently.’

Career Travelers

Another advantage of working only a couple of travel contracts per year is that we are able to be more picky with the assignments that we do take. When we were working back to back contracts for the first three years while saving and investing heavily, we did our best to minimize the amount of down time we had between contracts. This was great for us financially, but got exhausting after a few years and led to us settling on a couple of assignments that didn’t really fit us very well during that time.

Now that we’re settling in to a much slower travel pace as “career travelers,” we don’t feel the need to rush and accept sub-par jobs, because we know that we’ll make plenty of money in the couple of contracts that we work each year to cover the downtime, and we also have our investments growing in the background.

Most travel therapists choose a more laid back approach to traveling from the beginning, choosing to take time off between each assignment to relax and unwind. This is a great idea and more balanced overall than how we started out. But, even so, working 45-48 weeks per year is common for many career travelers who do it this way, and when considering that some of that time off between contracts is looking for new jobs and moving, it doesn’t leave much time to relax or take long trips for leisure. After a few years of working at that pace while paying down debt or saving/investing, as long as you’re in a good place financially, is a great time to transition into a slower paced schedule focused on working less and relaxing more.

“Not Everyone Can Travel Forever”

Of course, we know that the travel lifestyle isn’t for everyone, and it may not be feasible for everyone to do this their entire careers.

What about having a family?” –you’re thinking.

Travel therapists have families. Babies and young kids; cats and dogs; aging parents and grandparents; nieces, nephews, and other family and friends they want to be near!

In many cases, you can make travel therapy suit your lifestyle. Some choose to travel and bring their kids and spouse along. Some choose to leave home for one or two assignments, leaving family behind, then have a PRN job at home for the times they’re at home (or just not work during the time at home). Some choose to take travel assignments in different parts of the country where they do have family they can visit.

There are lots of options. And again, we know it’s not for everyone. But it is a great lifestyle for a lot of us!

Is Being a Career Traveler Right for You?

Travel therapy offers the unique benefit of being able to choose how long you want to take off of work after a contract as long as you can afford to do so, and the higher pay while working the contract makes that possible. This is why I think being a career traveler is a great option. Being a travel therapist doesn’t have to just be a 1-2 year thing to adventure and save money, it can be a permanent thing with great pay, more time off, and a life full of adventure!

Are you interested in just traveling for a couple of years or is this something that you would consider doing long term? Let us know in the comments! Contact us if we can help you get started on the journey!

jared doctor of physical therapy 

Written by Jared Casazza, Doctor of Physical Therapy and Traveling Physical Therapist of 3 years. Jared travels with his girlfriend, fellow travel PT and fellow Travel Therapy Mentor, Whitney.

Happy Holidays from Travel Therapy Mentor!

Written by Whitney Eakin, PT, DPT, ATC


Having time off during the holiday season to spend with friends and family can be difficult for healthcare professionals since healthcare is an essential business that must go on despite what day it is. Hospitals and nursing homes don’t close for holidays, and the patients that we care for at those facilities still need us.

As traveling healthcare professionals, we may sometimes be able to have more control over our schedules and be able to plan for time off, but that isn’t always the case. And, whether we have to work or not, it may also be difficult to see family and friends depending what part of the country we’re in.

We here at Travel Therapy Mentor wanted to let you know what the holiday season looks like for us this year and in years past, as many of you can probably relate!


Travis and Julia

Travis and Julia recently on their trip to Hawaii

Travel therapy mentor Travis and his fiancee Julia, both physical therapists, will be spending this Christmas with Julia’s family in Arizona. They are fortunate to both have Christmas day off this year, with Julia working in outpatient and Travis at a Skilled Nursing Facility. However, they both had work on Christmas Eve (Monday) and will have to work the rest of the week after Christmas.

This Winter, they chose to arrange contracts independently (not through a travel company) near Phoenix, AZ which is where they currently call home and plan to return PRN to these locations in the future. So they are not on what we might call a “traditional” travel assignment currently.  But, this arrangement worked well for them for the next several months, and it also allowed them to be near Julia’s family this holiday season while still continuing to work. They will not however get to see Travis’s parents who will be in Alabama this Christmas.

In years past, the two have not always spent the holidays with family due to traveling for work. Last year, they spent Christmas together in South Carolina and made their own holiday dinner in their camper. They have been fortunate to never have to work (so far) on Christmas Day.

Travis and Julia are embracing the travel healthcare life, even if it means ever changing holiday traditions.

Travis and Julia’s Christmas Tree at their apartment in Phoenix – with a tree skirt made by grandma!


Whitney and Jared

Jared and Whitney in Hong Kong last week

Jared and I have had quite the unusual year and a very non-traditional schedule! We worked a travel physical therapy contract from January-July 2018, then we took off around the world for 5 months! We just returned to the U.S. on December 17th! We planned to continue to be off work until after the New Year so we could spend quality time with both of our families in Virginia for the holidays.

We are very fortunate to have a job that allows such flexibility, as long as you plan and save wisely. The only downside to our plan is that we have found it challenging to find jobs that start just after the New Year. Many travel therapists have similar plans, to finish up a contract before the holidays in order to be with family, then resume work after January 1st. In addition, many facilities have already secured therapists to work through the holidays and into January. This combination of factors has made jobs for January scarce. So as of now, we are unemployed indefinitely until we can find contracts to begin sometime in January. But we are fortunate that we have saved a significant amount, so a few extra weeks off work (on top of already 5 months off!) won’t bother us.

In years past, we have secured jobs in December that carried over through the new year, while asking for time off for the holidays as able. We have worked on Thanksgiving Day and Christmas Eve before, but we’ve always managed to make it home to Virginia for Christmas Day, whether we asked off or the facility was closed. So far we’ve always been working in Virginia or North Carolina within driving distance of home during the holidays, and that has worked out well for us.

Jared and Whitney’s families in Virginia on Christmas Eve

Whitney with her sister and mom celebrating with extended family in NC


Being a travel therapist around the holidays can sometimes make it easier to be able to see family, but it can sometimes make it more challenging!

Our hearts go out to those of you working the holidays this year, those spending the holidays geographically far away family, and to the patients who would love to be home with family as well!

Happy Holidays from us here at Travel Therapy Mentor!

What Kind of Travel Therapist Will You Be?

Written by Whitney Eakin, PT, DPT, ATC


The world of travel therapy is an exciting one. There are so many options and possibilities as a travel therapist. We as U.S. healthcare professionals are fortunate to have this as an avenue to travel down, so to speak, not only professionally but personally.

There are so many different types of travelers out there, from new grads, to those with a few years experience, those in the middle of their careers, or those close to retirement.

There are “career” travelers who do it forever and ever, amen, and never plan on settling down. There are “just testing it out” travelers who take a contract or two. There are ones who take travel contracts part of the year and work at home part of the year. There are “I just want to travel to places where my kids and grandkids live and make a little money along the way” travelers. And everywhere in between.

What kind of travel therapist will you be?

Let’s talk about some of the key reasons that many therapists choose to travel, what motivates and drives them… (but, of course, most of us are driven by a combination of all these factors!) …and see where you can relate!

In it for the Money

Yes, yes, this is often the big one. Income. Paychecks. Most therapists hear that travel therapy can afford them higher income than a permanent position, and for many different circumstances this is enticing.

For those who need to pay down a high amount of student debt, more money can be the key to becoming debt free. For those with families, more money can mean a better lifestyle, or less time spent working and more time spent with family, or that one spouse may not have to work at all. And for just about anyone, more money means more options.

Lots of therapists travel solely for the purpose of making more money, and they will chase the highest paying contracts no matter what. For most, it’s some combination of money and other factors that drives them to choose travel therapy.

You can check out this article to better understand how travel therapy pay works and how you can earn more money as a travel therapist.

Are you planning to travel just for higher pay?

All about Schedule Flexibility

When you work as a travel therapist, you are a “contract” worker, and therefore you are only employed while on contract. This means you can be in control of when you work and when you take time off. Gone are the days of only having two weeks of vacation time or PTO!

For many, this allows a lot of flexibility to be able to spend more time with family for special events and holidays, or to take time off to travel for leisure. In addition, since most travelers make more money than they would at a traditional position, they can in most cases afford to take additional time off, while still making enough money to support their lifestyles.

For some, such as me and my boyfriend Jared, this could mean working part of the year and traveling internationally the other part of the year. We just finished a 5 month trip around the world, are taking additional time off for the holidays with family, and plan to take a new travel PT contract next month.

The possibilities for how you want your schedule and your life to look are endless as a travel therapist.

Do you plan to use travel therapy to take extended periods of time off?

Adventure Junkies

For many, the excitement of traveling around the country and having adventures in new places is what draws them to travel therapy.

Who else gets to go live in a new city, state, region for +/- 3 months, instead of just visiting for a few days or a week?

It’s amazing the experiences you can have when you’re living in a new area. Even the normal, mundane, day to day activities are exciting. New grocery store, new weekend farmer’s market, new gym, new local coffee shop, new dog park.

Not to mention hiking all the trails, exploring all the beaches, skiing all the slopes, hitting up the local events, trying out new breweries and wineries, and catching local bands. Plus so, so much more!

Adventure is just around the corner for travel therapists, and more therapists are discovering it all the time.

Are you dreaming of the adventures you can have as a travel therapist?

The Social Butterfly

Want to meet new people? Looking for friendships across the states? Looking to find love? Why not travel for work and open up your circle!

Becoming a travel therapist can give you lots of opportunities to meet new people. Whether it’s co-workers, new friends at the gym, a new church community, a volunteer group, or local “meet-ups” — the possibilities are endless if you’re willing to put yourself out there!

Of course, I’d be remiss to say that traveling always helps you make new friends. Some travelers can feel quite lonely in a new place. Sometimes building strong friendships in such a short time can be challenging, and sometimes locals are not willing to open their circle to a newcomer, especially someone so transient.

But, that’s not always the case, and quite often travel therapists can make amazing connections in each place they go! This can mean having a whole new “family” across the country, or even finding a group of people you love so much, you want to stay!

Are you searching for new connections?

The New Setting Hopper

Some therapists choose to use travel therapy to broaden their skill sets. As a traveler, you have the opportunity to hop from one setting to another and gain a wealth of experience.

Many therapists will choose to stick with one or a couple of their favorite settings, but many want to expand their resume and skill set. Travel therapy is the perfect opportunity for this. As long as the facility understands you may need some additional training if you do not have a lot of experience in that setting, and you feel confident and competent enough to work there, you can dip your foot into new settings to see what you think!

Travel therapy affords a rare opportunity to hop from one setting to another, an opportunity that most therapists would never get.

Do you want to try out new settings, without the commitment of a permanent position?

What Kind of Travel Therapist Will You Be?

Do any of the above reasons resonate with you? What do you see your travel life looking like? There are so many possibilities, and no two travel therapists are alike.

If you’re ready to get started in your travel therapy career and would like guidance and recommendations, please reach out to us! We would be happy to help mentor you on your travel journey!

Paying $0 in Federal Taxes and $0 in Student Loans Payments as a Travel Therapist

Written by: Jared Casazza, PT, DPT

Managing student loans as a new grad therapist, or even as a seasoned clinician, is one of the most common concerns that I’ve heard over the last few years. In addition, paying down student loans is also the most common reason that I’ve encountered for why new travelers choose to take travel contracts. Some of my most popular articles of all time on FifthWheelPT have to do with how I’ve chosen to manage my student loans, and this was also the topic of a recent post on this site, Travel Therapy: Paying Off Student Debt… or Not?

Today I want to talk about how it’s possible to pay $0 in federal taxes while also having a $0/month student loan payment while on an income driven repayment plan as a travel therapist. I will ignore state taxes, since this will differ for each individual based on the state in which they work and the state in which they have their tax home. I will also ignore FICA taxes since they are owed every dollar of income earned regardless of income level.

Some of the terminology and ideas in this post may get complex, so if you’re confused, check out the post linked above on Student Loans, as well as some of the links contained in that post for more background info.

Before I start, I do want to say that this is not meant to be personal advice for your individual situation, as I am not a financial advisor or accountant and have no formal training on these topics. This is information that I’ve learned from reading and researching over the past few years and implemented in my own situation, but everyone’s situation is different and tax laws change regularly. If you’re interested in doing anything similar, then do your own research or reach out to a licensed professional for help, as this post is meant for illustration and entertainment purposes only!

Alright, now with that disclaimer out of the way, let’s look at how I would plan to keep my federal taxes and student loan payments both at $0 for the foreseeable future as a full time travel therapist!

Example Situation Information

Let’s say that I’m a 26 year old new grad traveler, single tax filer, without any kids or dependents. I’m a DPT who’s home state and tax home is in Virginia. My primary goal as a travel therapist is to earn and save as much money as possible in order to increase my net worth as quickly as possible, to get to a point where I can transition into either part time work in a single location or taking fewer travel contracts each year to have more free time for family, other hobbies, or leisure travel. To do this, I invest heavily in tax deferred retirement accounts to decrease my tax burden and my student loan payment, which both allow me to save even more for the future. I have student loans of $100,000 with an average interest rate of 6%. After reading more about the various income driven repayment plans, I’ve decided that REPAYE will make the most sense for me financially, and that I plan to eventually qualify for student loan forgiveness. I also understand that half of my accumulated interest is subsidized each month while on the REPAYE plan, so the lower my monthly payment (ideally $0), the lower my effective interest rate will be!

Income, Taxes, and Student Loan Payment

As a traveler, I work about 48 weeks per year while spending a month at home each year as a vacation and to spend time with family and friends. My taxable pay on contract is $21/hour, with tax free stipends received for lodging, meals, and incidentals while on assignment traveling. In this situation, assuming I work 40 hours each week, my yearly taxable pay would equal $40,320. (21 x 40 x 48 = 40,320) The 40 hours a week is a safe assumption since I always make sure to have a 40 hour guarantee in my travel contracts (as we recommend that other travelers do)!

If I were to not try to optimize this situation at all, I would have a federal tax bill of approximately $3,208 for the tax year of 2018. I would also have a monthly student loan payment of $184, which is equal to $2,208 for the year. That’s definitely not bad but I want to do better. I’d rather keep that $5,416 in my own retirement accounts to grow and improve my net worth! Below are pictures of both the taxes and the student loan payment for this scenario. The student loan table was generated using the federal student loan website’s repayment estimator and the tax chart was generated using SmartAsset.com.

student loan repayment initial.png

income taxes initial.png

Optimized Scenario

The key to paying less in taxes and having a lower monthly income driven student loan payments lies in reducing your Adjusted Gross Income (AGI). One of the easiest ways to do this is to contribute to tax deferred accounts such as a traditional 401k, a traditional IRA, or a Health Savings Account (HSA). These accounts are very advantageous because not only do they reduce your tax liability, they also benefit you in the future through the money growing in the accounts over time (provided the money is invested wisely). For my purposes, I want my AGI to be low enough that I don’t owe anything in federal taxes and I have a student loan payment of $0. However, the two numbers to achieve these goals are unlikely to be the same, so this takes some research on my part.

In 2018, the standard deduction is $12,000, which means that any income up to that amount is taxed at 0%. but you can actually go higher than this amount before owing any money in federal taxes. In my situation in this optimized scenario, by contributing to retirement accounts, I also qualify for the saver’s credit. This means that as long as I contribute at least $2,000 to a retirement account and have an AGI below $19,250. I get a $1,000 tax credit that will completely wipe out any federal taxes owed at that income level. As far as federal taxes for a single traveler without kids who contributes at least $2,000 to retirement accounts are concerned, $19,250 is the sweet spot to owe nothing. This is assuming that no other deductions or credits are available to be claimed, which in the scenario above would be true.

To have a student loan payment of $0, $19,250 is a little too high and will still lead to me having a $10/month payment. That definitely isn’t bad at all, but I can do better while only contributing a little more to the tax deferred accounts mentioned above. After playing around with the repayment estimator, I find that to have a $0 student loan payment on the REPAYE plan, the highest AGI that I can have is $18,809.

student loan repayment $0

This means that if I’m able to reduce my AGI from $40,320 down to exactly $18,809, I will achieve my goal of paying $0 in federal income taxes while also having a $0 student loan payment!

Implementation

Reducing your AGI by almost $22,000 may sound difficult, or even crazy. For most people who make only $40,000/year, that would probably be the case. However, travelers are different.

Since we receive tax free stipends which usually cover most, if not all, of our living expenses, living on a taxable income of $18,809/year isn’t nearly as hard. In fact, my girlfriend Whitney and I have each lived on much less than this each year since we began traveling, and we have met and mentored dozens if not hundreds of others that do as well. If you live an expensive lifestyle in a high cost of living area, then this might not be possible for you. But if your primary goal is to keep as much of your money as possible, while saving and investing for the future by living a modest lifestyle to achieve financial independence as quickly as possible, then this is 100% doable!

Implementing this strategy is fairly straight forward. Utilizing the tax deferred accounts mentioned above, I would need to contribute $21,511 to reach the $18,809 AGI amount talked about above. Here’s the course of action that I would take:

Since an HSA is an extremely valuable account to save for future medical expenses, or even to use as an extra retirement account, that is the first account that I would want to contribute to. I choose to utilize a high deductible health insurance plan through my travel company specifically to have access to this amazing account! The contribution limit for a HSA for a single individual is $3,450 for 2018. So I would contribute the full $3,450. ($21,511 – $3,450 = $18,061 still to contribute).

The next $5,500 (the contribution limit for IRAs in 2018) would go into a traditional IRA account. I prefer maxing out an IRA before a 401k due to the increased number of investment options available in the IRA compared to a 401k. Having more options for where to put the money will ultimately mean lower fees paid and more money in retirement. ($18,061 – $5,500 = $12,561 still to contribute).

At this point, I would have $12,561 left that I would put into the 401k plan offered by my travel company. I refuse to work with any travel company that doesn’t offer a 401k because of how valuable I find being able to contribute to these tax deferred accounts to be. A 401k has the largest limit of the accounts talked about above at $18,500 for 2018. I wouldn’t even need to max out the 401k completely since contributing just the $12,561 would get me to my goal, but if my income happened to be higher for some reason (possibly working overtime on a contract, or having other sources of income) then there would still be some wiggle room to contribute more and still achieve the magic AGI amount of $18,809.

Conclusion

As a traveler, it’s possible to have both a $0 federal tax bill and simultaneously have a $0 income driven student loan payment. Subsequently, this will allow the traveler to utilize the money saved to invest for the future and possibly achieve financial independence more quickly.

The key to achieving this is the traveler reducing his/her AGI by contributing to tax deferred accounts (401, traditional IRA, HSA). The magic AGI needed in the scenario above to reach this goal is $18,809, with anything below that amount being unnecessary. In the scenario above, using this strategy and putting the $21,511 needed into the tax deferred accounts would save the individual $5,416 between federal taxes and student loan payments, which is a 25% savings on the amount put into the accounts in the year contributed! Instead of that money being paid to the federal government and the student loan servicer, it would be invested and subsequently compounding tax-deferred over the years.

Being able to do this is relatively unique to travelers, since many of our expenses are reimbursed tax free while traveling, making living on the much lower AGI completely feasible; whereas, someone without the tax free stipends may struggle. Whitney, Travis, and I here at Travel Therapy Mentor have all taken advantage of tax deferred accounts to reduce our tax burdens while traveling, which we believe is a smart way to not only save money on taxes but also to set yourself up for a financially comfortable future!

Thanks for reading and making it through all of that! Do you take advantage of tax deferred accounts to reduce your income taxes and student loan payment while traveling? Let us know in the comments below! Reach out to us with any questions or for clarification on anything mentioned above. If you’re getting started with travel therapy and you need help finding a good recruiter/travel company, then send us a message to get our recommendations!

Travel Therapy: Paying Off Student Debt… or Not?

Written by Jared Casazza, PT, DPT

How and Why I Got Started with Travel Therapy

I first decided that travel therapy was the direction I wanted to go just after finishing my first year of physical therapy school. I had spent a significant amount of time researching average PT salaries for my hometown and wasn’t happy with the numbers I was finding, especially when factoring in the amount of debt I knew I would have after graduating.

With this low salary to high student debt dilemma in the forefront of my mind, I was looking for a solution to help bridge the gap. Coincidentally, soon after I started looking into ways to increase my salary, in my first clinical after that first year of school I met a travel DPT who told me how much he was making and I was shocked! What really stuck out to me was that he was working the same job as all the other permanent PTs at the facility, but making almost twice as much as they were! Before that, I didn’t how anything about travel PT, but after meeting him and learning more, I was certain that would be the path I would take, at least for a few years to pay off my debt.

What I Chose to Do About My Student Loans

Fast forward two years and I was just finishing up my last clinical and two weeks away from graduation. I had already made contact with several travel therapy recruiters and was looking for Travel PT jobs to start as soon as possible after graduation. In the meantime, I decided that I should use a conservative estimate of what my travel income would likely be to start planning out a budget and a goal to completely repay my student loans.

I determined that in just two years of traveling and living frugally, I could easily repay my full $100,000 in debt!

Compare that to the standard 10 year repayment, or perhaps around 5 years working hard to pay it down aggressively while working a permanent job! My plan was that after that two years of paying off my loans aggressively while traveling, I would divert all the money that had previously been going toward my loans into investing in retirement accounts and brokerage accounts for the future.

But wait. That’s not the end of the story.

I started to wonder what I would be passing up in investment returns if I paid off my student debt quickly instead of putting that money into investment accounts right away. I figured out that for my scenario, it actually wouldn’t make sense for me to aggressively pay off my debt when instead I could invest the money and yield a higher average return. So instead, I decided to utilize the tax benefits of being a traveler to enroll in an income-driven repayment plan, while choosing to invest the majority of my savings early in my career rather than pay down all my debt early. I eventually wrote several blog posts about this decision and all the factors I took into account to come to that conclusion (check them out here, here, here and here!).

Whether or not to pay off your student loans quickly, invest, or do a combination of the two is a very individual decision and one that you should spend some time considering. However, one thing is for certain, working as a travel therapist can set you up to have a lot more financial choices and opportunities compared to working a permanent position.

I’m going to highlight below the benefits that travelers have when it comes to student debt!

Higher Income

This one is a no-brainer and something that every traveler, or prospective traveler, is aware of. Travel therapists make more money than permanent therapists, and in some cases the difference can be huge. Making more money makes it much easier to pay down large amounts of student debt, which is one major reason people decide to pursue travel therapy in the first place.

There are undoubtedly some “cons” that go along with the financial “pros” (check out the top 5 pros and cons of travel therapy here) of being a travel therapist, and everyone’s situation is different, but overall it’s a good situation for most therapists. For travelers who are dead-set on getting rid of their student debt as quickly as possible by making big payments each month, travel therapy is hard to beat!

Tax Advantages

The tax advantages that come with taking travel assignments outside the area of your tax home are a big reason for the increased pay that travelers receive. Getting tax free stipends for meals, housing, and incidentals is what ultimately leads to the much higher net pay that travelers enjoy… provided that they are eligible. The tax free stipends combined with a slightly lower taxable hourly pay rate means that less money goes to federal, state, and FICA taxes. This is especially the case when considering federal taxes which are marginal in nature, meaning that having the lower taxable pay makes a big difference in the total effective tax rate paid.

Income Driven Repayment Plans

As I mentioned above for my own situation, a big advantage for travelers as far as student loans go is the increased likelihood of eligibility for income driven repayment (IDR) plans, and more specifically, REPAYE. Since the income driven repayment plans are based on adjusted gross income (AGI), this will benefit travelers because AGI is lower due to the lower taxable income mentioned above. Therefore, most travelers will have a very low monthly student loan payment on an IDR, sometimes even $0/month depending on how many weeks per year the traveler works. The reason that REPAYE is particularly advantageous in this scenario is due to the fact that under this plan, half of the accumulated interest (due to the monthly payment not covering the interest accruing each month) is subsidized. For someone with a $0/month payment, this means that their effective interest rate is cut in half while on the REPAYE plan! This is something that simply wouldn’t be an option for almost all permanent full time employees due to having a higher taxable income, with a subsequent higher income driven monthly payment, which negates most of the benefit of having the accumulated interest subsidized under REPAYE. As a traveler, having your interest rate significantly reduced in this manner can easily tilt the decision to pay down debt or invest in favor of investing and keeping the debt. This was a big factor in my decision to keep my student loan debt and invest all of my savings instead.

If you’re someone that is ultra conservative with your finances, is very debt adverse, or doesn’t trust yourself to actually invest the money that would have been used to pay down your debt, then this is probably not the best choice for you. On the other hand, if you’re a natural saver, like me, and want to optimize your money, then this is an option that shouldn’t be overlooked while traveling.

Conclusion

There are a few financial advantages that travel therapists have over permanent full time employees when it comes to repaying student debt. Of most importance to everyone is making a significantly higher after-tax income each year due to the tax advantages of traveling. Additionally, there is also a big opportunity to be had in the form of income driven repayment plans, especially REPAYE, which offer a lower monthly payment for those travelers that can trust themselves to invest their extra income instead of paying down their student debt quickly.

Whether you plan to pay your student debt off as quickly as possible or plan to pay the minimum and eventually shoot for loan forgiveness while investing heavily for your future, travel therapy is a great way to reach your goal!

What is your plan for your student loans? Are you planning to pay them off as quickly as possible or invest your extra money instead? Let us know in the comments below! If you’re interested in getting started with travel therapy and would like assistance then reach out to us and we’d be happy to help!