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

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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!

Jared Casazza

Written by Jared Casazza, PT, DPT

Why You Should Choose to “Semi-Retire” as a Travel Therapist While Young

It’s been almost 2.5 years since I first wrote about my plans to semi-retire in 2018. I was excited but very nervous about that decision at the time, but since then my thoughts about it have evolved significantly. I now believe that the majority of travel therapists should practice some sort of semi-retirement, and my only regret is not doing it sooner!

If you’re unfamiliar with my story and path to financial independence and early “retirement” at the age of 30, read about it here.

What is Semi-Retirement?

How I define semi-retirement is essentially the process of choosing to work only 6 months of the year while using the rest of the year to pursue other interests and travel domestically or internationally, not for work but for leisure. Most people with regular permanent jobs don’t have the option to do something like this due to vacation time limited to 2-4 weeks each year, but healthcare providers who travel for work in the US are unique. We have the massive advantages of not only being able to make significantly more money than at a permanent job, but also the ability to take as much time off between contracts as desired. Personally, I took six months off in 2018, nine months off in 2019, and have yet to work as a physical therapist at all in 2020 so far.

Why Choose to Semi-Retire?

There are a variety of reasons why a travel therapist may choose to take large chunks of time off. Four of the biggest include: avoiding burnout, spending time with family, traveling internationally, and pursuing other areas of passion.

  • Avoiding burnout: Burnout has been a very hot topic in the therapy world for the past few years. Much of this has to do with new and recent graduates being disillusioned by the large amount of student debt, relatively low permanent job salaries, and productivity standards that can make even the best jobs miserable. Many therapists find the day to day stress and monotony of some rehab jobs very disheartening, and a feeling of burnout can emerge. Being able to take 3-6 months off at a time can be a great way to combat burnout by allowing therapists to rest, recuperate, and reevaluate settings and schedules.
  • Spending time with family: This motivation is self explanatory. Spending time with growing kids or aging parents and grandparents can be invaluable at some points in life.
  • International travel: Whitney and I had done very little international travel prior to our own semi-retirement in 2018. One of the main reasons for this was the high costs associated with most international trips. An interesting thing we discovered though, is that on a daily cost basis, international travel becomes much cheaper with longer trips vs short vacations. The reason for this is that the biggest costs of an international trip usually revolve around airfare and lodging. Both of those costs can be reduced on a daily basis when staying overseas longer. As most travelers know, AirBnBs almost always offer a discount for longer stays, which is our lodging of choice when staying overseas. In addition, a $1,500 round-trip flight spread over the length of a three month stay is much less than when spread over a 1-2 week stay, which is typical for most people going on an international vacation. Taking advantage of these factors allowed me to travel for five months in Europe and Asia for less than $37/day in 2018 (~$1,100/month) and for four months in Europe for less than $47/day in 2019 (~$1,400/month)! Both of those were ‘trips of a lifetime’ for about the same cost as my normal daily life in the US, due in large part to the long nature of the trips. In addition to cost, longer trips provide other advantages, such as more time to interact with and get to know the locals and the culture.
  • Pursuing other areas of passion: this was a primary motivator for me when aggressively pursuing early retirement. I enjoy being a physical therapist, but I also have many other interests. I love spending time reading and learning about finance, business, health/nutrition, psychology and philosophy as well. Taking long periods of time off from work as a PT allows me to focus on those other areas and then go back to physical therapy with renewed interest. I’ve also been able to spend more time on creative and business outlets like writing on this website as well as at the FifthWheelPT blog.

What About Income?

At this point you’re probably thinking, yeah of course taking long periods of time off sounds wonderful, but I can’t afford to do that.

This is, of course, a valid concern. Surprisingly though, for many travel therapists, it’s possible to make as much as a full time permanent therapist while working only two travel contracts (six months) per year, and that has definitely been the case for me. In my hometown, full time outpatient physical therapy jobs pay around $65,000/year on average. After taxes, this comes out to $49,000/year. As a travel therapist, my average pay over the years has been about $1,700/week after taxes. That comes out to about $44,000/year after taxes while working only six months taking outpatient physical therapy contracts!

Now that is $5,000 less than 12 months at a full time permanent job, but that’s not the whole story. When working only two travel contracts per year (6 months), taxable income is cut in half and income tax is reduce significantly. In fact, while working only two contracts per year, most travel therapists will actually pay $0 in federal taxes! Taking the lower taxes into account, my average after tax weekly pay would increase from $1,700/week to about $1,800/week. This leads to an after tax yearly pay of almost $47,000. That’s only $2,000 less than if I worked the entire year as a permanent full time outpatient therapist in my hometown!

$2,000 is still a significant amount of money depending on your financial situation, but this can be accounted for with lower expenses. Depending on how you choose to spend your time off, your day to day expenses may or may not be lower than they are while working. This is certainly the case for me. It turns out that hiking, going to the gym, reading, gardening, watching movies, and taking long walks are very inexpensive, which is how I choose to spend most of my time between travels. In addition, I spend less on gas when I’m not working due to no commute, less on clothes due to work clothes lasting longer, and am able to have plenty of time to cook meals at home instead of eating out saving money as well.

In addition to the day to day expenses, I save a lot of money on my student loan payment (currently paying $0/month while on an income based plan) and on my health insurance (currently less than $100/month due to subsidies while having a lot taxable income only working part of the year). The lower health insurance and student loan payments alone more than offset the $2,000/year additional income I’d be making at a permanent full time job all while taking six months off each year!

So as you can see, working 6 months per year as a travel therapist and taking 6 months off for this semi-retirement lifestyle, you can easily make about the same amount of money as you would working full time 12-months per year at a permanent position, and maybe even spend less money during your time off!

How to Structure Semi-Retirement as a Travel Therapist

Personally, if I could go back, I would make some changes to how I approached my career as a travel therapist. Hindsight is always 20/20. But luckily for you reading this, you can benefit from my hindsight.

For someone like me starting travel therapy as a new grad, I would suggest the following: I would work continuous contracts for one full year to build clinical skills and confidence, as well build some savings and investments. After one year of full time work, I would start working a schedule of one 3-month contract, followed by three months off, and repeat that indefinitely. I’d use the three increments off to alternate between long international trips and pursuing other interests, or possibly building a business of some sort.

This is in contrast to what I actually did, which was relatively continuous contracts for three straight years, saving money and investing like mad, followed by almost two full years so far of almost no work at all. Although my financial situation is undoubtedly better for going that route, I was feeling burnt out after three years of continuous travel contracts. I also have learned that, at least for Whitney and I, international trips longer than a few months (although they’re awesome) can lead to missing home and fatiguing out, even when traveling relatively slowly and stress free. Our long trips so far have been 5-months and 4-months, and they were pretty exhausting. Instead, two to two-and-a-half months at a time of international travel is probably the sweet spot with regards to cost and maximal enjoyment. In addition, waiting three years to take our first long international trip also put us closer to starting to think about having kids and settling down, so starting earlier would have given us more time and been preferable.

For yourself, even if you didn’t like the model outlined above, you could tailor it however you wanted. Maybe you want to work two back to back contracts per year (6 months), followed by 6 months off. Or, one 3-month contract, followed by 1 month off, then another contract. However you decided to break it up, you could still take advantage of a lot of the principles outlined above.

Conclusion

In my opinion, semi-retirement (~six months off per year) is a wonderful balance between work and leisure that allows for lots of adventure and personal development early in your career. Being a travel therapist/traveling healthcare professional, due to it’s unique attributes, is the perfect career to make this lifestyle work, and has been one of the best decisions I’ve made in my life to this point.

My only regret is not starting this lifestyle a couple of years earlier. It’s possible to work only half of the year and still make an income comparable to a full time permanent therapist position, while significantly reducing expenses when not working, even when traveling internationally in some cases! If you can, why not give it a shot?

If you need help getting started with your travel therapy career, check out our guide to getting started and reach out to us for recommendations on travel companies and recruiters!

Written by Jared Casazza, PT, DPT