Reaching Semi-Retirement in Three Years as a Travel Therapist: Jared’s Story

Written by: Jared Casazza, PT, DPT

The Past

Education

I spent a total of 8 years in college (3 of which were in community college trying to decide my direction in life) which culminated in a Doctor of Physical Therapy degree, earned in May of 2015. Even though I was very proud of this accomplishment and the incredible amount of work it took to achieve it, I knew that physical therapy was not something that I would spend the next 20-30 years of my life doing full time. I’ve had various interests throughout my life and knew myself well enough to know that eventually I would likely become bored with physical therapy like so many of my passions in the past.

My Personality

You see, I get consumed with an area of interest for a period of time, before eventually becoming mostly disinterested once I feel that I’ve achieved a certain level of proficiency in the area. I seem to find something I like and throw myself into being the best that I can be in that area, which ultimately leads to me burning out with the pursuit. In my 30 years, this has happened with basketball, chess, video games, diet/nutrition, powerlifting/bodybuilding, and now to some degree physical therapy and finance. I still enjoy all of these things, but I no longer feel an intense urge to learn everything or be “the best” at them anymore like I did with all of them at one point or another in my life. At some juncture, the return on invested time and energy in any area of interest leads to a point of diminishing returns, and this is always where I seem to gradually disengage. At 30 years of age, I still don’t know if this is a good or bad thing, but I have accepted it as a part of my personality.

Knowing about this personality trait (flaw?), I was skeptical whether the time and money investment that is synonymous with 3 years of graduate school (after already completing 5 years of undergraduate work) would be worth it when I had no idea how long I would be passionate about the field. I ultimately decided that it was, and I am very happy with where I am now because of the choice. Although, I would be lying if I said I never questioned whether a DPT degree is worth it.

Student Loan Debt

Upon graduation in 2015, I had about $95,000 in student debt from grad school alone, and that included trying my best to be frugal by living at home and commuting to classes. Even though this is a massive sum, it is generally on the low end of the debt range of what many physical therapists graduate with. Terrified by this student debt, I became engrossed by the idea of increasing my income and decreasing my expenses to pay down the loans as quickly as possible.

After hundreds of hours of research and performing my own calculations and projections for the future, I ultimately decided that it would be in my best interest to pay the minimum on my loans while investing heavily in retirement and brokerage accounts. This has turned out to be a very good choice so far, with my student debt growing at an effective rate of about 3.2% per year while on the REPAYE plan, and my investment portfolio growing at a rate of around 9% since I started heavily investing (this was closer to 11% before the big drop in December 2018)… and this isn’t even accounting for the tax savings from utilizing the retirement accounts. This plan isn’t for everyone, of course, but I do think it should be a consideration for those trying to reach financial Independence as soon as possible with a lot of student debt.

Financial Independence

As for financial independence, while researching what to do with my student loans in late 2014, I stumbled upon a couple of blogs talking about saving heavily and retiring early, and I was immediately sold. Once I knew the math behind achieving financial independence and calculated “my FI number,” I knew that was the goal I needed to reach as soon as possible. My main motivation for pursuing financial independence so aggressively was to have as many options as possible for the future in case my interests shifted again and I became passionate about something different and wanted to pursue that.

Traveling Physical Therapy

In my first year of physical therapy school, I researched the options and found that the easiest way to make the most money as a physical therapist, in order to reach my financial independence goal, is by taking travel contracts. In some cases a travel physical therapist can make twice as much or more when compared to a therapist taking a permanent full time job in one location, especially as a new grad.

Whitney, my significant other of over 5 years and also a physical therapist who graduated at the same time as me, also liked the idea of making extra money while going on adventures, moving to and working in new places around the country together. Without a doubt, this was one of the best decisions that either of us have ever made.

Living in a Camper

Finding affordable short term housing at each assignment location can be the biggest difficulty of being a travel therapist, and to combat that we saved our money and paid cash for a fifth wheel camper and truck to haul it after our first 6 months of working and saving aggressively. For the majority of our travel careers, we have lived and traveled in the camper. Whether or not we have come out ahead financially with this decision is still up for debate, but we did enjoy the simplicity of finding somewhere to live while traveling in the fifth wheel and also the consistency of our living arrangement. There have been many pros and cons to traveling in a fifth wheel, but overall we wouldn’t change our decision.

Maximizing My Income and Savings Rate

After having a goal of financial independence in my cross-hairs, I wasn’t content with just making more money as a traveling therapist, so I did everything feasible to minimize my expenses while simultaneously finding ways to make more money along the way. This led to working as many hours as my travel assignments would allow with hundreds of hours of overtime in total over three years, taking part time jobs when available, creating this blog (just as a hobby initially with hopes to eventually generate some income), and going a little overboard with credit card rewards.

In reality, I hustled so much and minimized my expenses to a point that I have been able to save 100% of my income earned from my regular 9-5 travel physical therapy jobs, and even extra on top of that some months. The first two years, I was able to live on just the money earned from credit card/bank account sign up bonus combined with overtime hours and part time work. The last year, to my surprise, the FifthWheelPT blog actually started consistently bringing in enough money to cover all of my living expenses most months.

The Present

After 3 years of living frugally and saving my entire full time paycheck as a travel therapist (each year with a savings rate of between 85-90% of my total income), combined with the investment returns I mentioned above, I officially “semi-retired” in July 2018 at 29 years old. I tracked my progress to financial independence with my monthly “Path to 4%” posts each month for the past 2.5 years along the way, and will continue to do so until I fully reach my “FI number.” Even though I haven’t fully reached that number yet, there were various reasons that I went ahead and transitioned into semi-retirement when I did, with a primary one being our desire to travel internationally.

I refer to what I’m currently doing as “semi-retirement” because I still plan to write on this website, write on the FifthWheelPT blog, andhelp those interested in travel therapy get started, which takes up about 5-10 hours per week, and I will also likely continue to work one travel assignment (3 months) per year to keep my physical therapy skills from getting rusty. I still enjoy the job and helping patients, but I no longer wish to do it full time for the entire year.

We celebrated this semi-retirement with a 5 month trip around the world at the end of 2018, which was a wonderful and eye opening experience. By utilizing credit card points to keep expenses lower while traveling, I was able to spend less than an average of $37/day on the trip, all of which was able to be covered by money brought in from this blog. This meant that I didn’t even have to start withdrawing money from my investment accounts, which was a blessing with the market taking such a hit at the end of 2018! This trip really made us realize that life is short and there is so much that we want to see and do before settling down and having kids. We plan to take several more 3-6 month long trips all over the world for the next few years before deciding what’s next for us. We’re currently planning a 15 week trip to Europe in May, which we are extremely excited about.

The Future

Right now, we still own our fifth wheel and truck, but we are considering selling them between now and May when we leave on our next trip, so that we don’t have to pay personal property taxes, insurance, storage fees, and deal with further depreciation while taking these long trips and not using the truck and camper. I have to admit that this has led to a bit of an identity crisis for me, since many people know me as the “Fifth Wheel PT” now… if we sell it do I have to rename the blog?!

We haven’t worked as physical therapists in 7 months since leaving for our Around the World Trip, but after searching for jobs since we returned to the US in December, Whitney finally found a Travel PT contract about 3 hours from home. She started work this week, however I still don’t have a job lined up as of now. I’m working on trying to set up a short term contract or PRN work in the same area as Whitney. But, if I don’t end up working before leaving on our next trip to Europe in May, then I will most likely find a travel contract in September when we get back from the trip. Although that will mean I will have a 15 month gap in my work history, which I’m a little concerned about.

We plan to go to a few physical therapy conferences each year to network with other therapists and students and talk about travel therapy as well as finances and how these things have so positively impacted our lives. I may not be as ravenous with learning new things about personal finance and investing as I once was, but I still enjoy writing and talking about it. I’m also not nearly as involved with travel therapy as I once was, but I have learned a ton and want to spread the knowledge and let others know that an exciting and lucrative adventure is possible.

I’m considering writing a book in the future about personal finance and investing from the perspective of a physical therapist, and possibly even more specifically from the perspective of a travel therapist, but I don’t know that I have the motivation required to do that right now. Nonetheless, I plan to continue to write about whatever interests me on the FifthWheelPT website and to write articles about travel therapy on this website.

Ultimately I’m grappling with the realization that financial independence and retiring early is really just the beginning, not the end of the journey. With time and brain power freed up to a large extent, I’m not sure where I’ll go from here, but I’m okay with that uncertainty.

Conclusion

It has been a wild ride for both Whitney and me since graduation in 2015. I would have never anticipated doing what I am now back then, but I’m very grateful that things have turned out the way that they have.

I undoubtedly sacrificed on some things to reach semi-retirement so quickly, but by no means was I a “miser,” living an unfulfilling life in those 3 years of saving aggressively. We took dozens of weekend trips all over the east coast (Whitney has written all about those trips here); spent a few days in Canada; stayed at an all-inclusive resort in Jamaica for a week; I took my brother to Aruba for his high school graduation; Whitney and I went on a cruise to the Bahamas; and we bought plenty of stuff that we really didn’t need (you know, the American way).

I really didn’t do anything special to get in the position I’m in besides looking for ways to maximize my income and minimize my spending while still having a good time. This combined with a cultivated urge to learn as much as possible in my areas of interest have paid dividends. No two paths are the same, but I feel that just about everyone has room to make headway on these fronts.

Thank you for reading this. If you’re a regular reader, then I hope that you have a little better insight into who I am, and if you’re a new reader, then this should be a good introduction to me and my life. Feel free to reach out to me with questions or comments!

 

This article was originally published on our personal blog. You can learn more about Jared’s story by visiting our blog at FifthWheelPT.com.

Factors to Consider when Comparing Pay Rates to Other Travel Therapists

Written by: Jared Casazza, PT, DPT

Background

One of the biggest fears for travel therapists, especially those new to traveling, is getting taken advantage of by recruiters. There is good reason for this fear since there are plenty of recruiters out there that are willing to low-ball those that don’t know what is reasonable in terms of pay and benefits. This is actually one of the main reasons that we created this website and began mentoring those new to travel therapy. Whitney and I  have had such an awesome experience while traveling, and we want to do our best to ensure that other travelers have a positive experience as well.

Since travelers are often so worried about their pay being inadequate, there is often open discussion regarding weekly take home pay between travel therapists. In general, I think this is a great thing and that everyone (not just travel therapists but therapists in general) should be more open to discussing their pay in order to have more transparency in this area.

Alas, as a travel therapist, there are some pitfalls to these discussions and comparisons that should be considered. If another travel therapist is working in the same state and at a similar facility but making significantly more than you, are you being taken advantage of? Sometimes, but not always. Let’s look at some of the factors that can affect discrepancies in pay. (If you’re completely new to travel pay then check out this comprehensive article on how it works for some background information)

Differences Between Travel Companies

Each travel company does things differently in terms of pay. Sometimes these differences are minor and sometimes they are major. The biggest difference affecting pay is your hourly taxable pay rate. For example, getting a pay offer from two different companies offering different taxable hourly pay rates is going to make the total take home pay each week much different even if the bill rate is the exact same. Some companies have a policy of not allowing taxable pay to go below a certain level (this can be as high as the $25-$30/hour range) whereas other companies will allow a much lower hourly rate (we’ve seen as low as $15/hour for PT, OT, and SLP). If your taxable rate is higher, that means your total weekly take home pay will be lower. The reason for that is not only do you have to pay extra money in taxes on that higher hourly rate, but the travel company has to pay a higher amount toward FICA taxes on your behalf as well. The difference between a $15/hour taxable rate and a $25/hour taxable rate can be $100-$200/week or more on your take home pay! If comparing your weekly take home pay to a fellow traveler, make sure to always consider your taxable pay rate compared to theirs.

Cost of Living

A huge factor to consider is the cost of living and desirability of the location in the area that you’re working in. In general, areas with higher costs of living (big cities) are able to offer higher stipend amounts for housing, meals, and incidentals. These stipends usually aren’t able to be fully maxed out in those areas though because the bill rate won’t support the full amount. Keep in mind that in general, rural areas are willing to pay more due to a lower demand in the area. As you can probably imagine, most travelers (and permanent therapists) want to go to the desirable areas in the country, which means that the demand for therapists there is lower and the facilities can offer lower bill rates and still know that someone will still take the position. If you’ve looked into a  contract in Hawaii then you’ll know what I mean. Hawaii is an extremely desirable location for travelers, and despite the high cost of living there, pay rates are very low due to the high demand. If you’re taking a job in Hawaii, it’s for the experience of the island life, not the pay.

Be careful comparing your weekly take home pay in lower cost of living states to others taking assignments in higher cost of living states (such as the west coast). Even though someone on the west coast might be making significantly more per week, you have to remember that their living expenses might be significantly higher there as well!

Up-Front Reimbursements

Some companies may offer up-front reimbursements as part of their pay packages, while others don’t and instead add that money into the weekly pay. This isn’t necessarily a good or a bad thing either way, but it can affect weekly take home pay significantly and cause a discrepancy in pay between you and a fellow travel therapist, which is something to be cognizant of.

For example, let’s imagine both you and a fellow traveler recently accepted 13 week travel contracts in California after getting licensed there last month. You’ll both be traveling there from your home state of Tennessee. Your company offers you $500 in reimbursement for your CA license, as well as $400 to travel from Tennessee to California, and another $400 to travel back to Tennessee when your contract is completed. The other therapist’s company does not offer any reimbursements. Their take home pay is quoted to be $1,900/week after taxes, whereas your take home pay will only be $1,800/week. If you met this traveler while in California and discussed your pay, you may very well think that your company is taking advantage of you by paying you $100/week less, but in reality when you factor in the reimbursements, your pay is the exact same!

Be careful comparing weekly pay without considering reimbursements. Some companies and recruiters will purposely not offer reimbursements in order to be able to offer a high weekly pay rate since that’s what most travelers are concerned with. This is just moving the same money around, don’t be fooled!

Travel Company Size

As I talked about in the post I wrote on bill rates, travel companies take a different percentage of the bill rate depending on their overhead. Bigger companies are going to have higher overhead due to more people on payroll, bigger marketing budgets, more buildings, etc. Small companies usually have lower overhead and can get by with taking a lower percentage of the bill rate, although this isn’t always the case as we’ve found over the years. If bigger companies have higher overhead, isn’t it always better to work with a smaller company? Not necessarily. Bigger companies often have more jobs as well as exclusive contracts. They also tend to have better benefits and lower costs for the benefits due to having more employees working for them.

Combining Multiple Factors

When these factors are added together, differences in weekly pay can huge. If you compare weekly pay amounts between a big company that pays a high taxable rate and offers a lot of up-front reimbursements with a job on the east coast to a small company that pays a very low taxable rate with no reimbursements with a job on the west coast, you can see differences of $500/week or more in some cases!

Conclusion

Be careful when comparing weekly pay rates to other travel therapists without also considering all the factors influencing weekly pay rate. Don’t automatically feel bad about your pay the next time you see another travel therapist bragging about their high weekly pay rates when working with small companies on the west coast, when you’re working with a big company with more jobs and better benefits on the east coast.

If you’re in need of a company/recruiter that you can trust, send us a message with some info about yourself and your reason for traveling and we can set you up with a few that match well with you and that we trust!

Do Travel Therapists Work Overtime and Is It Worth It?

Written by: Jared Casazza, PT, DPT

“Travel Therapists Don’t Work Overtime”

When Whitney and I started traveling, we were told by most recruiters and other travel therapists that overtime in the travel therapy world is rare. We heard that facilities don’t want to pay extra to have a traveler working overtime, and they won’t allow them to get overtime. In general, that does seem to be the case for the majority of travelers, but it has definitely not been the case for me. In fact, in almost all of my contracts I’ve worked some overtime and in a couple of them I worked A LOT of overtime. I’m not exactly sure why this has been the case for me, but it is probably the combination of two factors:

  1. I was very eager to work all that I possibly could in order to save as much as possible for my first few years as a traveler. I went out of my way to offer to see extra patients or stay late at each of my contracts if needed. I also always asked about the potential for overtime in my phone interview with the facility, and in some cases their answer would sway my decision of which facility to choose if there was more than one that I liked.
  2. We worked primarily in small rural areas where they didn’t have PRN help. If it got busy, they were fine with me working extra hours in order to make sure all of the patients were seen. Whereas most clinics in more populated areas have PRN therapists they can call for help when things get busy, many rural facilities do not, so that means overtime for the regular staff, even if that happens to be a traveler.

It’s true that most facilities do everything possible to avoid having travelers work overtime. The big reason for that, of course, is money. Bill rates for travelers can be huge, and often the facility is obligated to pay 1.5x the bill rate for any hours worked over 40. That could mean that a facility is paying $100/hour or more for each hour of overtime that we work in some cases! Meanwhile, 1.5x the hourly rate for a permanent employee is likely in the $50-$60/hour range, which is much more palatable for them. Even though this is the case, I’ve found that often the permanent staff isn’t willing to work overtime, so with no PRN help and me being eager to work all the hours I can, they just approve it. Or, in some cases, I’ve been the only PT on staff, with no permanent PTs or PRN PTs. So in that case, if patients need to be seen outside of 40 hours of work, then I’m the only option and thus get asked to work overtime.

My Experience

In my first two years as a new grad travel therapist, I worked a total of over 400 hours of overtime! That’s an average of about 4 hours per week, but that wasn’t distributed evenly. Most weeks I worked only 40 hours (even less in some cases), but then other weeks I worked as many as 65 hours when a facility was really desperate to have patients seen. That meant some really long weeks sometimes, but I was very happy with the extra money!

Facilities/managers will often approve a couple of hours of overtime per week for a traveler, but there are rare cases where they will approve as much overtime as is needed. When those times came around, I took advantage!

Is Working Overtime Worth it as a Travel Therapist?

Whether or not it’s worth it to work overtime as a travel therapist depends on a couple of factors:

  1. How much you’re earning for each hour of overtime that you work based on your contract.
  2. How eager you are to make extra money.

A mistake that I made early on as a travel therapist was not negotiating a higher overtime rate, or even realizing that it was negotiable. As I mentioned above, the travel company can often make $100/hour or more when a traveler works overtime, because the facility pays out 1.5x the full bill rate, but that doesn’t mean that the extra money goes to the traveler automatically. In fact, in most cases the traveler will make only 1.5x their taxable pay rate, which often means overtime pay in the $30-$35/hour range. This means the amount they’re making for overtime hours is actually less than the amount they make during normal hours. How does that work exactly? Because during normal hours, we get paid our hourly taxable pay + our stipend pay. Whereas, if we’re only making 1.5x the hourly taxable rate with no additional stipends for the overtime hours, the overtime pay is actually less than the normal pay. In this case, the extra money is made mostly by the travel company, not the traveler, because the facility is still paying the travel company 1.5x the full bill rate.

This happened to me in the beginning, but I quickly wised up and you should too if you’re planning to work overtime. I recommend that you negotiate at least 2x (ideally 3x or more) your normal taxable pay for working overtime hours. Keep in mind that stipends can’t be increased when working overtime, because there is a max amount of stipends you’re legally allowed to earn each week regardless of working over 40 hours, but a multiple of the hourly rate should be possible. Another option that some companies do instead of writing in a certain hourly rate for the overtime hours is they’ll arrange for you to receive an additional bonus at the end of the contract for any overtime hours worked, which equals out to the extra money you should be receiving on an hourly basis for each hour worked. This has been the case with one company we’ve worked with. However, if a company tells me overtime rates are not negotiable period, then that’s a deal breaker for me in terms of working with that travel company.

Many travel therapists have no desire to work overtime. Since we already make a lot more money than at permanent positions in most cases, these travelers don’t see the need to work extra hours. This is especially the case in desirable areas where working longer hours takes away from time that could be spent exploring! This is completely understandable, and if you value your free time more than you value the extra money that you’d make while working overtime, then feel free to decline the hours. A facility can’t require that you work hours that aren’t in your contract, so you’re in the drivers seat in this situation.

Conclusion

If you look for opportunities to work overtime as a travel therapist, you can usually get some extra hours depending on the facility and location. Whether or not the extra hours are worth it depends on you and your priorities.

If there is at all any potential for you to work overtime based on what you hear during the phone interview, make sure to negotiate a higher rate for those hours than the standard 1.5x hourly taxable rate. Don’t get taken advantage of by the travel company earning a lot of extra money for your overtime hours like I did when starting out! If the travel company/recruiter that you’re working with isn’t willing to work with you to find a fair amount for your overtime work, then there are plenty of other fish in the sea!

If you’d like some recommendations for recruiters/companies that we’ve had success working with, then reach out to us here and tell us about your main priorities as a travel therapist, and we’ll match you with a good fit. If you have any other questions about travel therapy or overtime pay, contact us!

 

Intangible Benefits to Consider When Choosing a Travel Company

Written by: Jared Casazza, PT, DPT

The biggest concerns for most therapists when considering starting out as travelers include pay and benefits. Whitney and I were no exception here. I wanted to make as much as I possibly could while also getting decent health, dental, and vision insurance.

However, over the past several years as travel therapists, we’ve learned that there are other important factors to consider when deciding between travel companies which we call the “intangible benefits” of the companies. The reason these things are intangible is because they don’t show up directly on your weekly paycheck or in your health insurance package, but they can make a big difference in some cases.

Day One Insurance

Depending on your situation, not having to wait 14-30 days before your health insurance benefits take effect can be really important. For Whitney and I, this isn’t necessarily a deal breaker when working with a particular company since we rarely use our health insurance anyway, but it is important to consider. We prefer to work with companies that offer health insurance benefits starting on the very first day of the contract and encourage you to ask this question when interviewing potential recruiters as well.

401k Contributions and 401k Matching

I’m a big proponent of contributing to tax deferred retirement accounts. Not only does contributing to these accounts lower your income taxes, but also your income based student loan payment as well, so working with a company that doesn’t offer a 401k is not something that I’d do very often except in some sort of extenuating circumstance. A 401k match is also a perk that isn’t always offered and may have limited usefulness to travelers in some cases, but should be considered when deciding which travel company to work with.

CEU Reimbursements

Not all companies will offer CEU reimbursement, instead putting that extra money directly into your weekly pay. Depending on your weekly pay and your other reimbursements for a contract, this may or may not be a big deal to you. For us, if we are offered jobs by two different companies with similar pay but one offers a certain amount of CEU reimbursement per contract, that can sway us toward that company. Others may offer access to MedBridge or other online CEUs while on contract with them, at no additional cost to you, which can be a nice perk.

Free Gifts and Trips

Some travel companies will reward their therapists with free gifts such as: shirts, cups, mugs, bags, food, or even all-inclusive trips! These things are always exciting and can be a huge benefit in some cases. Usually we’d prefer to just make more money each week instead of that money going toward gifts and trips, but if two companies offer similar pay, but one offers a free trip each year in addition to the pay, then that company would be hard to pass up! Depending on the traveler’s personality, even small surprise gifts can turn a bad week into a good one, which can make a big impact over the long run.

40 Hour Guarantee

40 hour guarantees (sometimes also called guaranteed work weeks “GWW”) have been huge for me and Whitney! In fact, in almost 4 years of traveling, we’ve never accepted a contract that didn’t have a 40 hour guarantee included. If we take contracts, we want to be sure that we will always be getting full pay even if the facility suddenly starts having fewer patients for some reason and tries to decrease our hours. The security of knowing we’ll be getting paid our full amount no matter what is vital for us.

Most companies offer 40 hour guarantees on some or most contracts, but this varies from company to company. Also, as we’ve found out over the years, all 40 hour guarantees are not created equal. Some companies will only pay you for the full 40 hours if the census is low at the facility, but not if there’s a holiday or inclement weather that causes the facility to be closed. In most situations, we go with companies that pay the full 40 hours no matter what, with all other things being equal. Getting paid even on days when the facility is closed has meant I’ve made thousands of extra dollars over the course of my traveling career. This is one of the biggest intangible benefits for me.

Number of Available Jobs

I’ve talked in the past about smaller companies being able to pay higher weekly amounts with a given bill rate due to lower overhead, but this doesn’t always mean that smaller companies are the optimal choice. Bigger companies often have more available jobs, including exclusive contracts, which means more options for the traveler and potentially less down time between contracts. An extra $100/week can easily be offset by a few weeks of unintended time off due to not finding a contract that fits the traveler well, which could sometimes happen with smaller companies with less job options.

Job availability is even more important when traveling as a pair like Whitney and I, or Travis and his wife, Julia. Having one person in the pair accept a job while hoping to find something for the other person before the job starts can lead to a lot of unpaid time off. Whitney and I have had very good luck with finding two jobs that started exactly when we needed them to over the years (except a couple cases), and we attribute most of that to working with several different companies (most of them bigger) that have the most job options.

Conclusion

Having a high weekly pay rate is certainly important as a travel therapist and the most important thing to me, but it’s important not to forget about the intangible benefits that can directly or indirectly lead to more or less money in your pocket over the course of your traveling career. Make sure that you’re informed and consider all of the variables when deciding which travel companies to work with and which travel assignments to take to ensure that your travel career is a success!

If you would like some suggestions for companies/recruiters that we’ve found to have the best offerings in terms of pay and intangible benefits over the years, then reach out to us here! If you have any questions about travel therapy or these intangible benefits then feel free to contact us!

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

Is Contributing to a Company 401k Worth it as a Travel Therapist?

Written by: Jared Casazza, PT, DPT

What Makes Travel Therapy Different?

Travel therapists are in a unique position with respect to 401k accounts. When working with most travel healthcare companies, therapists will be eligible to contribute to the company sponsored 401k plan. The 401k benefit eligibility will vary company to company, but most companies provide it in some form. However, since many travelers switch between travel companies pretty frequently, it is a common concern whether contributing to the company 401k plan makes sense for them, or if it would just be additional hassle. Unsurprisingly, since most of my articles on FifthWheelPT are finance related, this is definitely one of the top five most common questions I get asked by current and prospective travelers. In addition to wanting to know if using the 401k plan is worth the hassle if switching between companies, I often hear that there is concern about what happens with account once the individual leaves the company or stops contributing to the account.

I hope to shed some light on my thoughts about 401k plans for travelers in this post, but I do not intend this to be specific advice for any of you. This is just what I’ve done and what works for me, but everyone’s situation is different, so be sure to do your own research on the topic as well.

What is a 401k?

First let’s cover the basics of what a traditional 401k plan is and why one would choose to contribute to it in the first place. Most travel companies don’t offer a Roth 401k option, so we can skip over that for now, but if you’re interested in my thoughts on Roth vs. Traditional accounts, you can check that out here.

A traditional 401k is a retirement account that is offered by an employer and allows the employee to contribute pre-tax money to the account from each pay check. The amount contributed is up to the employee, but it is usually based on a percentage of the employee’s taxable income. Since the money isn’t taxed when it’s contributed, it’s able to grow in the account tax free for however long it remains in the account. When withdrawals are made (usually in retirement), the money withdrawn each year is then taxed along with any other earnings (social security, investment income, rental income, etc.). The big benefit of this account is that it allows you to contribute money while working and earning a lot, therefore in a higher tax bracket, and instead paying taxes on the money in retirement while (hopefully) in a lower tax bracket. The money also grows more quickly in a 401k than in a regular investment (brokerage) account since the amount that would have been taxed is compounded. The maximum that an individual is able to contribute to a 401k in 2018 is $18,500, and for 2019 it will be $19,000. Taking advantage of the tax benefits of a traditional 401k (and additionally, a traditional IRA) is a huge part of what has allowed me to semi-retire and travel around this world this year after only three years of full time work as a travel therapist.

401k Employer Match

A 401k sometimes has the added benefit of employer matching. The amount that is matched, if any at all, is determined by the employer and will usually be somewhere between 3%-6% of the employee’s taxable income. The employer can also include a contingency that it is only matched if the employee contributes a certain amount as well. This is the employer’s way of helping the employee have a more secure retirement by contributing to their retirement account. In many companies, the employer match took the place of a pension that used to be standard but has now disappeared in most public sector jobs. An employer match is in no way equal to a pension since the benefit is comparatively small, but any extra money toward retirement is a great thing!

The employer match is great if the company offers one, but for the majority of travelers this will be a moot point. Most travel companies offer a 401k with some sort of employer match, BUT they have a vesting schedule. The vesting schedule determines how much of the employer match you get to keep if you leave the company early, which makes this an incentive for the employee to stay with that employer. Many of the companies require that you have to work between 3-5 years with the company to keep all of the employer match. Some plans will have a tiered vesting schedule: something along the lines of at one year you keep 20% of the matched amount, at two years you keep 40%, etc. However others have a “cliff” vesting schedule: something like if you work three years or more you keep all of the matched amount, but if you leave before three years you don’t keep any of the amount that has been matched. Basically, the 401k employer match is great, but unfortunately it won’t apply to travelers that switch between companies often or that don’t plan to work three years or more as a traveler. In that case, an individual retirement account could make more sense and involve less hassle for the traveler.

Traditional Individual Retirement Account

A traditional IRA (Individual Retirement Account) is another option which has the same benefits as a traditional 401k, and doesn’t require an employer to utilize, and one other big difference, the contribution maximum. A traditional IRA allows a maximum contribution of only $5,500 for 2018 and $6,000 for 2019. If you’re a big saver like me and plan to reach financial independence as quickly as possible and maybe even retire early, then that’s a relatively small maximum each year.

If you plan to switch companies often, and therefore won’t benefit from the employer match, and don’t plan on putting $6,000 or more toward your retirement account each year, then foregoing the 401k and choosing an IRA instead could be the best choice. An IRA does have the added benefit of more flexibility between investment choices. With a 401k, the investment choices are usually limited to 10-20 options chosen by the company, whereas with an IRA the investment options are essentially limitless.

Utilizing a 401k and an IRA

For those, like me, that plan to put more than $6,000 toward retirement each year, then contributing to a 401k account in addition to an IRA will likely be necessary even if the individual won’t benefit from the employer match.

Luckily, having a 401k and an IRA is pretty easy, even if you switch travel companies often. (Keep reading below to learn more about that process if switching companies.) I’ve switched between companies on a few different occasions and have always taken advantage of a 401k account if offered, while also contributing the maximum amount to both the 401k and an IRA.

There are income limits where the benefit of an IRA (the tax savings) starts to diminish if the individual is also contributing to a 401k, but the limit is higher than most traveler therapists will make at $63,000 of adjusted gross income (tax free stipends are not factored into this number).

In my opinion, if you plan to save more than $6,000 toward retirement each year, then it makes the most sense to me to contribute the maximum to an IRA, and then any additional money you wish to save would be invested in the 401k. This is assuming that you wouldn’t benefit from the employer match, but if you would, then it would be foolish to pass up that match.

Here is the general order of operations that I have used and that I think makes the most sense:

  1. 401k contributions up to the amount to get the full employer match (if applicable)
  2. IRA contributions up to the maximum ($6,000 for 2019)
  3. 401k contributions up to the maximum ($19,000 for 2019)
  4. After tax investments (brokerage account, real estate, etc.)

If your company doesn’t offer an employer match on the 401k or if you won’t be able to benefit from it due to the vesting schedule of the company, then skip #1.

What Happens to the Money and 401k Account When Switching Companies?

Let’s say that you follow the order of operations above and stay with the same company for your first year as a travel therapist, but then get a better offer from a different company and decide to switch. You knew that you would probably be changing companies eventually, either for a better paying job or a job that your company may not have, so you assumed you wouldn’t benefit from the employer match. You maxed out your traditional IRA and contributed an extra $10,000 to your 401k. Great job!

Now, since the IRA isn’t associated with the employer, it isn’t affected at all by switching companies. That account belongs to you only. But the 401k is affected by switching companies, so you’ve got a decision to make.

Here are your options:

  1. You can have the money paid out to you.
    • This is almost never a good idea since you will not only pay taxes on the money, but also penalties!
  2. You can keep the money in the 401k account of the employer
    • This will occasionally involve additional fees since you no longer work for them.
  3. You can roll the 401k over from your previous employer’s 401k account to your new employer’s 401k account.
    • This could also be a hassle if you don’t plan to stay with the next company very long.
  4. You can roll over the 401k into your already existing traditional IRA account.
    • In most cases, and what I’ve always chosen to do. It makes sense to roll the 401k balance over into your traditional IRA. This gives you the increased flexibility with investment options mentioned above, which usually means lower fees on the investments as well which is a wonderful thing. The account is also yours and not associated with any employer, so you don’t have to worry about moving it around again at a later time. And the accounts work the same way with taxes, and you won’t have to pay penalties.

401k Rollover to Traditional IRA

By rolling the money over into your traditional IRA account, you have essentially contributed the full $16,000 (investment in the IRA to the maximum plus the investment in the prior 401k plan that is now rolled over) to your traditional IRA. This is an easy way to effectively contribute more than the maximum amount to an IRA when switching companies. This simplifies your finances (less accounts to keep track of) and gives you more investment options which are both great things. The rollover process is very simple and can be repeated every time you leave an employer and have a 401k balance with them. I have rolled my 401k balance into a traditional IRA several times and it has never taken more than 30 minutes.

For those travel therapists that are saving a significant amount toward retirement each year, I think that this is the best option with all things considered. I max out my IRA, contribute as much as possible to my 401k, and then roll the 401k into the IRA each time I leave a travel company to give myself the most investment options and to keep my financial life as simple as possible, while still contributing over $20,000/year to the accounts that wouldn’t be possible with a traditional IRA alone.

If you do this as well then you’ll want to make sure that it is a direct rollover. More information on the different types of rollover can be found here.

Conclusion

I know that for those of you that aren’t very familiar with saving and investing, this can all sound intimidating, but it really isn’t very difficult and takes minimal time to figure out and implement.

For those travel therapists that don’t plan to save more than $6,000 toward retirement each year, then just foregoing the 401k and choosing an IRA instead is the most simple option. For those that want to save more than $6,000 per year and also switch companies often, it’s worth the extra effort to contribute to the company’s 401k plan once you’ve maxed out your IRA for the year and roll that 401k over each time you leave a company. Once you’ve done it once it’s a piece of cake and will take you no time.

Above all else, make sure that you’re saving for retirement in some capacity no matter what account(s) you choose to utilize!

Remember to do your own due diligence before implementing anything that I talk about, since this is not intended to be specific advice for you. Thanks for reading and I hope that this post helped to clarify things for you.

If you have any questions about this post or anything else travel therapy related then contact us and we’ll do our best to help you out. If you need assistance finding a good travel therapy company or recruiter then reach out to us and we can help you there as well.

How do you currently handle your retirement accounts as a travel therapist? Let us know in the comments!

 

Understanding a Travel Therapy Contract Bill Rate

Written by: Jared Casazza, PT, DPT

All travel therapists want to get the most money possible out of their contracts. In fact, the increased pay associated with travel therapy is the #1 reason that most people that we talk to choose to travel in the first place, so not getting as much money as possible would be no good. While there can often be room to negotiate when presented with an initial offer from a recruiter, there is, of course, a limit to how much they can actually pay a traveler for each contract. The big limiting factor in the equation of pay for any travel contract is the “bill rate.”

What is a Bill Rate?

A “bill rate” is the amount of money that the facility (hospital, clinic, nursing home, etc.) pays the travel company for each hour that a traveling therapist works. As travelers, this is a number that we rarely ever find out about, since it is negotiated between the travel company and the facility usually before they ever even list the job or present it to travelers. Most recruiters do not wish to share this number with travelers either, but you really can’t blame them for that. The bill rate is much higher than the hourly rate that the traveler receives, but that is because it has to account for all overhead costs and company profits as well, so sharing the bill rate could make the traveler feel like they’re being taken advantage of, even when that’s not the case. BluePipes wrote a great article on other reasons why travel companies don’t divulge bill rates as well, which you can find here.

How Much is an Average Bill Rate?

Bill rates vary drastically depending on setting and area of the country (just like traveler pay), but I’ve heard of ones as low as $60/hour and as high as $80/hour, which shows why there can be such variation in traveler pay across the board, since it’s all based on the bill rate. In some situations, the bill rate can even be higher if the facility is in urgent need of a traveler and is willing to pay more to get someone there quickly. In general, the facility is going to pay the travel company as little as possible, while ensuring that their opening will be filled, so how desperate they are can have a big impact on the bill rate.

So if a company is receiving around $70/hour ($70 x 40 = $2,800/week) from the facility, while the traveler is only getting a take home pay of about $1,600/week, where is that extra money going?!

Costs that have to be Subtracted from the Bill Rate

Overhead costs of running a travel company can be pretty high. The company has to pay staff (recruiters, managers, payroll department, benefits department, etc.), for rent and utilities on their offices, for marketing, for taxes, and they also have to make a profit in order to stay in business. This all usually adds up to about 20-25% of the total bill rate, depending on how big the company is and how much their overhead costs in total. That means that after overhead costs are subtracted out, that $2,800/week turns into about $2,100/week.

From there, we have to consider that the company pays for part of the traveler’s health insurance (assuming the traveler chooses one of the company sponsored plans); maintenance fees on 401k plan; CEUs (if offered by the company); FICA taxes on the traveler’s hourly pay (7.65%); and credentialing costs for the traveler for each assignment such as: license reimbursement, travel reimbursement, drug tests, TB tests, and backgrounds checks.

They also usually have to keep a small percentage to account for contract cancellations, since when a traveler’s contract is cancelled early, not only does the traveler lose out on money, but so does the travel company. I think of this as like an “emergency fund” for the travel company for when unexpected events occur.

It’s also important to keep in mind that the “take home pay” amounts that we usually use to discuss travel contracts is after the traveler’s taxes are subtracted out, which means that the travel company actually pays you more than that amount, but that’s the amount you see on your paycheck after federal, state and FICA taxes are subtracted. So “take home pay” refers to after-tax, or net pay, not gross pay.

For example, a $1,600/week “take home pay” usually means that the travel company actually pays out $1,800/week in gross pay to the traveler. It’s easy to see how the $2,100/week devoted to the traveler’s pay can quickly be reduced to much closer to that $1,800/week figure paid out to the traveler each week, once all of the above costs are factored in.

Getting the Highest Pay Possible

In most cases, honest recruiters are doing their best to offer the highest pay possible to the traveler, within the bounds of the bill rate that they have to work with. Many travelers hear about how high some bill rates can be and quickly assume that recruiters are trying to take advantage of them, without first considering all of the costs incurred by the company, taxes they have to pay, and also also the benefits offered to the traveler that aren’t seen in the weekly take home pay number. Don’t forget to consider these factors before jumping to conclusions! But, it doesn’t hurt to push for more money when you feel it’s warranted, have considered all the “extras” already included in your pay package, and have considered the type of job, location, and cost of living!

The bill rate is also the reason that it is important for travelers to push for higher pay for overtime hours worked. Overhead costs don’t need to be factored into overtime hours worked, due to them already being accounts for in the initial 40 hours. With overtime, the company will get the same bill rate (sometimes 1.5x the bill rate even), while the traveler only receives 1.5x their taxable pay rate in most cases. This is a great situation for the travel company, but a terrible situation for the traveler. So understanding how the bill rate works and how your pay is broken down is a key factor here in advocating for yourself with a higher overtime rate!

Conclusion

It’s very important to have an understanding of the bill rate and all the costs that must come out of that hourly pay amount the travel company receives from the facility, in order to understand how your weekly take home pay is determined as a travel therapist. The more you understand, the better you can advocate for yourself and get the highest pay possible.

I hope you have a little better insight into how the weekly take home pay amount is calculated now with a basic understanding of bill rates!

Thanks for reading and feel free to ask any questions you may have on bill rates or anything else travel therapy related in the comments below or contact us directly. If you need some recruiter/travel company recommendations that we trust to not take advantage of you as a traveler, then send us a message here and we’ll help you out!