Retiring Very Early as a Physical Therapist (Yes, even as early as in your 30’s)

photo of Jared hiking while looking up at the sky, with title "Retiring Very Early as a Physical Therapist by Jared Casazza at Travel Therapy Mentor"

February 4, 2021February 4, 2021 ~ Travel Therapy Mentor ~ 2 Comments

Written by Jared Casazza, PT, DPT

Retiring from your career as a physical therapist earlier than “traditional” retirement age may be a goal you’re seeking, or something you’ve at least thought of in the back of your mind at some point. What if I told you that it’s possible not only to have a comfortable retirement before the age of 65, but possibly even as early as in your 30’s depending when you began your career and how you choose to structure your life? If this is something that’s piqued your interest, let’s dig a little deeper to understand how a very early retirement (or at minimum a transition to part time or optional work) has become a reality for me and could be a real possibility for you as well.

Background

Over the past five years, I’ve written dozens of articles on personal finance, investing, and financial independence. Almost all of these articles have been on the blog I started back in 2016, Fifth Wheel Physical Therapist, where I’ve consistently tracked my progress toward financial independence since that time. Over the past couple of years I haven’t felt as motivated to write about these topics though. That’s mostly because usually I feel that either I’ve already covered things I would potentially think about writing, or it’s already been covered elsewhere in the finance space. It’s also because I’ve had gradually decreasing interest in personal finance and financial independence since I reached my ultimate financial goal in May of 2019. In reality, the decrease in interest started even before then, when I realized that I’d saved more than enough to “Semi-Retire” (transition to only working part of the year) back in 2018, after only working full time for 3 years as a physical therapist. Once I was certain that my financial future was secure, my interest in personal finance took a backseat to other interests.

Every now and then though, I’ll get a particularly moving email or message from a follower who was inspired by my articles to improve their own financial situation and is now on their own path to financial independence. The excitement that emanates from those communications reminds me of the excitement that I felt when I first discovered that financial independence and early retirement (known as the “FIRE” movement) was possible and achievable for me, and it reminds me why I started writing about FIRE and working toward it in the first place. For the right person, like me, being introduced to the idea of financial independence and the math behind it is intoxicating.

After all, who in their right mind wouldn’t want to reach financial independence and have nearly unlimited options for their future?

With so much negativity regarding finances and workload after graduation in various therapy groups where I’m involved, I realize now the value in at least occasionally putting out content to introduce those that are receptive to the idea that a 30+ year career seeing 20+ patients per day isn’t a foregone conclusion. With some planning, optimization, and foresight: it’s possible to achieve financial independence and effectively make work optional much earlier than most think is possible.

Making my job as a Physical Therapist (PT) optional financially was my ultimate goal from my very first day working as a PT. From my clinicals, I knew that I enjoyed working as a physical therapist, but that it was probably something that I wouldn’t want to do 40+ hours per week indefinitely. It’s becoming clear from the conversations being had online that a large number of current therapy students and new graduates have had, and are currently having, this same realization.

In my opinion, actively working toward financial independence is the answer. This was one of the best decisions that I’ve ever made personally. I like to think of working toward financial independence as a game, with every net-worth milestone being one step closer to buying lifestyle freedom and optionality.

If you think this sounds crazy, or is just a pipe dream, below I’ll explain how I was able to leave my career as a full time physical therapist at the age of 30, after only working full time for less than four years, with enough saved and invested to support my expenses indefinitely — and have since used that freedom to design a lifestyle full of adventure, international travel, and plenty of leisure.

The Journey to Financial Independence

As I mentioned above, I discovered financial independence along with the math behind it prior to graduating physical therapy school, in 2015. I instantly knew that this was a goal that I wanted to reach as quickly as possible and started sketching out potential scenarios and thinking about options to supercharge my path. Below I’ll detail some of the key strategies that helped me to achieve financial independence, and some ways that you could utilize similar strategies to reach your own financial independence.

Maximizing Income

Based on research I’d done while considering options after PT school, I knew that it was possible to make significantly more money as a Traveling Physical Therapist. That combined with a desire to venture outside of my hometown made Travel PT a no-brainer and led me to pursuing it immediately after graduation. To my delight, my girlfriend (and now business partner, with whom many of you are familiar on this site) Whitney who was graduating at the same time as me saw the potential benefit and was quickly onboard with Travel PT as well. And thus began our Travel PT journey as new grads.

By no means is travel therapy the only way to maximize income as a physical therapist though. There are many therapists that I’ve communicated with over the years that make as much or more than I do as a Travel PT by working in home health, cash based outpatient practices, or by working a PRN physical therapy job outside of their full time job. Travel therapy was just the path that I personally chose to maximize my income as a new grad PT.

Knowing that maximizing income is vital to reaching a goal of financial independence, in addition to working as a Travel PT, I also started working on some side hustles to further increase my monthly earnings. To my surprise, these side hustles actually helped me earn enough that I was able to cover all of my expenses with them and save 100% of my travel therapy income each month during my first 3 years as a PT.

Minimizing Expenses

Another vital component of reaching financial independence and early retirement is minimizing expenses. As a traveler, keeping expenses low can sometimes be more difficult due to the need to duplicate living expenses in order to maintain a tax home, but it’s possible to still keep expenses low with some strategic planning.

I decided to rent a room in a house for my tax home instead of renting an apartment or entire house, which helped me to save a lot of money. Whitney and I also decided to buy a fifth wheel camper to live in while on travel assignments, which not only saved us money each month but also made finding housing in assignment locations much less of a hassle. We bought both our fifth wheel and the truck to pull it with used in order to reduce how much we’d lose in depreciation costs when it came time to sell them later on.

Besides keeping housing and transportation costs as low as possible, we chose to limit how much we spent on things like meals out, electronics, and subscription services to further reduce the expenses side of the equation.

Savings Rate

By maximizing income and minimizing expenses, I was able to maintain a high savings rate. Throughout my three years of full time work as a travel therapist, my savings rate stayed in the 80-90% range. More specifically, around 88% in 2016, 85% in 2017 and 72% in 2018 — even despite working for only half of the year in 2018 and spending the second half of the year traveling around the world!

As a side note, most people believe that traveling for long periods of time internationally would be very expensive, but that doesn’t have to be the case. In fact, I keep track of all of my expenses during our long international trips to show that traveling internationally can cost the same or less than it costs to live a median lifestyle in the US, with some strategic planning. It cost me less than $37/day to travel for 5 months through Europe and Asia in 2018 and less than $46/day to travel for 4 months all over Europe in 2019! These were both trips of a lifetime for us, and being able to take them while still saving money was a massive bonus!

Investing

Having a high savings rate is wonderful and a key component to achieving financial independence, but utilizing that money saved each month wisely is just as important. Being able to cover your yearly expenses with 4% or less of your invested assets (known as the 4% rule) is what most people in the personal finance community define as “financial independence.” This is where making intelligent investing decisions comes into play. Investing as much as possible early in your career is ideal in order to allow compound interest to work in your favor for as long as possible.

There are endless ways that people choose to invest, but what worked best for me and probably makes sense for the majority of people is a simple passive index fund investing approach with a reasonable asset allocation**. For me, that meant sticking primarily to Vanguard passive domestic equity index funds. Passive index fund investing not only costs less in terms of fees but also requires significantly less time to implement, which means more time to earn extra income or for leisure.

**Please note that I am not a licensed financial advisor and this is not meant to be specific financial advice for your situation. It’s important that you do your own research and if necessary consult a licensed financial advisor to assist you with investing and finance decisions.

Managing Debt

Besides investing, money saved each month should also go toward paying down debt. I believe that avoiding high interest rate debt at all costs is imperative for achieving financial success, but often some debt is unavoidable. For most of you reading this, that would include student loan debt.

There are generally two main approaches to managing student debt. Either pay the debt off as quickly as possible, or make minimum payments on an income driven repayment plan for 20-25 years until the debt is forgiven, while saving/investing the money saved along the way. Initially, I planned to pay my debt off as quickly as possible, which is what the majority of travel therapists will take the opportunity of having higher income to do; but, after a lot of time spent learning and making projections, I instead decided to go the income driven repayment plan route. You can find the considerations and math behind my decision here. This certainly isn’t the best option for everyone, but for me this choice has saved me tens of thousands of dollars over the last six years and supercharged my path to financial independence!

Early Retirement or “Semi-Retirement”

Since reaching “semi-retirement” in 2018 after only working full time as a PT for three years, and full financial independence in 2019, I’ve significantly reduced how much I’ve worked as a physical therapist, while instead choosing to spend more time traveling the world and working on hobbies and entrepreneurship.

I’ve only worked a total of 200-300 hours/year in each of the last two years, mainly to maintain my physical therapy license and keep my evaluation and treatment skills from getting rusty. This amount of work seems about ideal for me personally, as I’m still able to help patients, which brings me joy, for part of the year, while still having plenty of time to do other things that I want to do including travel the world. I’ve found that working on and growing our websites Travel Therapy Mentor and Fifth Wheel Physical Therapist is something I really enjoy, and I value the ability to impact the lives of others who find and read the articles I write.

The hours I work as a physical therapist combined with income earned from the websites and from my investments have caused my net worth to continue to increase each year, despite not working full time since 2018. At this point, I have over 35x my anticipated future yearly expenses saved and invested, which means an even more secure financial position. I plan for this to continue for the foreseeable future as I continue to keep my expenses relatively low.

Is Retiring Very Early Possible as a PT?

Retiring very early as a physical therapist is not only possible, but I believe that the path I took to get there isn’t unique and is replicable for many students and new grad therapists who are interested in pursuing this goal. In fact, since first writing about this years ago, there are many other therapists well on their way to achieving similar financial success. Here is one such story and here is another!

The wonderful thing about financial independence and personal finance is that it truly is personal. No two individuals have the exact same situation, and therefore no two paths will be exactly the same. I hope that you can find some aspects of my path that will work for you to improve your own financial situation and allow you to achieve financial independence more quickly — and in doing so, be able to design your lifestyle and future to look how you want it to!

If you’re a student, new grad, or current clinician interested in utilizing travel therapy to improve your own finances, here’s a great place to start. If you need helping finding reputable travel companies and recruiters we can help you with that as well! Please don’t hesitate to message us with any questions!

What is Financial Independence and Why is it Easier to Reach as a Travel Therapist?

August 20, 2020April 23, 2023 ~ Travel Therapy Mentor ~ 6 Comments

It’s been over a year now since I reached financial independence at the age of 30, and getting to that point at such a young age is due in large part to choosing to pursue a career in travel physical therapy as a new grad.

Originally when Whitney and I started traveling, I laid out a rough outline and projected it would take me about 5 years of working as a travel PT to reach financial independence. But, surprisingly, I was able to both make more and spend less than I anticipated, which sped things up significantly.

Even though my story and path to FIRE (financially independent retired early) is unique, it didn’t require anything particularly special to be done. I think my journey to financial independence can definitely be replicated by other travel therapists.

The keys to reaching financial independence as a travel therapist were:

living frugally
hustling to make as much money as possible
investing money intelligently

What is Financial Independence Retire Early (FIRE)?

Essentially reaching financial independence is getting to the point at which it’s possible to cover all of your living expenses with only investment returns (or other forms of passive income) indefinitely. At that point, work becomes optional since the income from work is no longer needed to sustain your financial life.

Once financial independence is reached and work becomes optional, many people choose to retire early. I personally have only worked 10 weeks as a physical therapist in the past two years, since I’d rather spend time traveling internationally and working on other interests than to work with patients at this point in my life. It’s not that I never plan on working as a therapist again, it’s just that I no longer have to; and I am choosing to do other things with life right now. I enjoy helping people in a physical therapy capacity, and will likely do some sort of part time work as a PT in the future, but any money earned from it is just icing on the cake at this point.

How do You Determine When You’re Financially Independent?

Most people have no idea how much money they need to reach financial independence and retire. This is a problem because many people, myself included, are motivated by setting and achieving goals. How do you set and strive to reach a goal of retiring when you have no idea how much money is needed?

This is where the 4% rule comes in. The 4% rule is a research-backed method for determining how much money is needed to reach financial independence. Basically, when your invested assets reach a level where you can cover a year’s worth of expenses while withdrawing only 4% of your investment portfolio, you’ve reached financial independence. Even though average equity returns (taking into account the history of the stock market) are in the 8-10% range, there are periods of time when returns can be significantly lower than that, so planning to withdraw 8-10% from your portfolio per year can easily lead to running out of money before you die. At a safer withdrawal rate of 4% per year though, running out of money is very unlikely, assuming that your money is invested wisely.

An easy way to determine how much you’ll need to retire is to use the inverse of the 4% rule, by taking your yearly expenses and multiplying by 25. This is exactly how I figured out what net worth number to shoot for to reach financial independence back in 2015 when I started working toward FIRE.

Traditional financial planning usually involves calculating your retirement number based on your yearly income rather than your yearly expenses. But this just doesn’t really make sense. The true number you need to focus on to figure out your retirement, or financial independence, number, is how much you actually spend each year, and therefore how much money you need to live on for a year. In order to figure this out, you’d need to track your expenses for a few months or a whole year to get a good estimate of how much you actually spend in a year.

Since your financial independence goal number is determined by expenses, reducing monthly/yearly expenses is the easiest way to reduce the amount of time to get there. This makes your savings rate vital!

Why Strive to Achieve Financial Independence?

Everyone has their own reasons for trying to reach financial independence. It could be to spend more time with family, to take long trips overseas, to spend more time working on hobbies, as well as a variety of other reasons. For me the biggest reason was to have as many options as possible. Reaching financial independence meant that I can now pursue whatever it is that piques my interest at any given time. I’ve found over time that my interests change often, and having as much time as I want to pursue new interests when they arise is huge for me.

Why is Reaching Financial Independence Easier as a Travel Therapist?

There are several reasons why I believe that reaching financial independence is easier as a travel therapist compared to therapists working permanent jobs. All of the factors below directly contributed to my success in reaching financial independence so quickly:

Higher income:
- This is the most obvious reason and the reason why many therapists choose to travel in the first place. Most travel therapists can expect to earn between 1.5-2 times as much money after taxes compared to a therapist working a permanent job. The more money a therapist is able to make, the more they’re able to save to reach financial independence more quickly.
Becoming a minimalist:
- As a travel therapist, getting used to living with less is important. Packing and moving is always difficult, but it gets more difficult the more stuff you take with you to each assignment. Whitney and I both progressively became more minimalist the more travel assignments we took in order to avoid having to pack and move as much stuff, and this seems to be an almost unanimous trait among other travelers as well. Learning to be a minimalist is important in reaching financial independence because the less you buy, the lower your expenses, and the faster your path to FIRE.
Lower student loan payments:
- I’ve written numerous articles on student loans including all the various student loan forgiveness options over the years. As a travel therapist on an income driven repayment plan, it’s possible to reduce your student loan payment significantly and even to pay $0/month in some cases. Going on the REPAYE repayment plan and pursuing student loan forgiveness while saving and investing as much as possible has allowed me to have a significantly higher net worth even when factoring in my student loan balance gradually growing. This isn’t the solution for everyone but is definitely worth considering, especially as a travel therapist with lower taxable income.
  - For those therapists who would rather pay off their student loans as quickly as possible, point #1 about higher income can help you to aggressively pay off your student loans within just a couple years as a travel therapist, compared with stretching it out over 10+ years on a standard repayment.
Cheaper health insurance:
- Currently under the Affordable Care Act, subsidies can make health insurance extremely affordable for those with a low taxable income. I’ve been able to take advantage of this for the past couple of years with, health insurance costing me less than $150/month while using the ACA marketplace plans between contracts. While on contract I’ve always chosen to use company sponsored plans which have always been very affordable. For most Americans, health insurance costs are a major concern, but as a travel therapist with a lower adjusted gross income (AGI), health insurance can be very affordable!

Using Travel Therapy to Gain Freedom

Financial independence is a goal that everyone should be striving for regardless if retiring early is appealing or not. Even if you love your job and plan to never quit working, having the peace of mind of knowing that work is optional is invaluable. Having more options in your life is always a wonderful thing!

Pursuing a career as a travel therapist, with all of the flexibility and benefits inherent in the job, is a perfect way to reach financial independence more quickly. Travel therapy was certainly vital for me in reaching my financial goals in such a short period of time!

If you’d like help getting started on your own path to financial independence and travel therapy journey, feel free to contact us with questions or ask us for recommendations for travel therapy companies/recruiters to help you get started!

Written by Jared Casazza, PT, DPT