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!

Should You Get a Contract Extension Bonus as a Travel Therapist?

Written by: Jared Casazza, PT, DPT

The Benefits of Extending a Contract

If you are a prospective or current traveler whose primary goal with travel therapy is to earn as much money as possible (likely to pay off student debt), then extending contracts when possible is a great idea. Whitney and I always try to extend contracts in places that we enjoy, and I actually extended my very first contract as a new grad twice for a total of nine months there. Extending a contract means less, or hopefully no, downtime between contracts since you don’t have to move to a new location. Most travelers choose to take at least a week off between contracts to move to their new assignment location. but that missed work means less money earned. Mitigating time off is a primary way to earn more throughout the year. Additionally, extending a contract is also easier because you’re already accustomed to the facility, staff, and patients.

Another big benefit of extending a contract is that you can almost always earn more money on the extension than you did on the original contract, either in the form of a bonus or an increase in taxable hourly pay. We usually try to get about $1-$2/hour extra when extending a contract, which ends up being $40-$80 more per week or $500-$1,000 more over the course of a 13 week contract! A dollar or two extra per hour may not sound like much, but it really adds up over time. Another option is to have the travel company reimburse travel expenses incurred while traveling back to your tax home if you plan to do that at any time during the contract. A reimbursement is almost always better than increase in taxable pay, if possible, because reimbursements aren’t taxed and therefore will mean more money in your pocket.

Understanding “Extension Bonuses”

Some travelers believe that getting an extension bonus means that the recruiter was keeping more money than they needed to be on the original contract, and now they’re somehow able to offer you more money the second go round, but that is not the case. So where does the extra money come from? Let’s investigate the answer to this question!

When you start a new contract as a travel therapist, the travel company has some upfront costs that they have to cover in order for you to start. These costs include things like: travel reimbursement for you to get to the new place, license reimbursement if applicable, background check, drug test, and TB test. All of those costs added together can end up being a significant amount of money that the company pays out in the beginning before you ever start working at the new place. These costs have to be accounted for by the company of course, so they reduce the amount that you make each week so that these costs can be recovered throughout the course of the contract. This reduction in the traveler’s pay is to be expected since all of our pay, reimbursements, and the travel company’s overhead costs, as well as their profits, come out of the “bill rate” that the facility pays the company. In other words, all the money has to come from somewhere, and that somewhere is what the facility pays the travel company. Under normal circumstances where the traveler moves to a new facility after every contract with no extensions, the company has to incur these costs again before each new contract. On an extension however, these costs aren’t incurred again, which means that there is extra money that can be added to your pay!

Negotiating Extension Bonuses with Your Recruiter

Most experienced recruiters understand that by the traveler extending in a location, there will be extra money to allocate to the traveler on the extension. But I’ve worked with recruiters in the past that say that an extension bonus isn’t possible since the bill rate is the same for the extension, and the facility “isn’t offering any additional money.” Unfortunately, they were overlooking these costs that the company would be saving on the extension. After explaining how they would be saving money on the things I mentioned above for my extension, I’ve always been able to negotiate some amount of extra pay or bonus for the extension.

It’s important to discuss this with your recruiter and make sure you are on the same page. You are your own biggest advocate and need to be an informed and educated traveler.

Bottom Line

Less missed work and higher pay on an extension make it a no-brainer if you’re at a facility and location that you enjoy AND the facility needs continued help. Always be sure to ask for more money on an extension if the recruiter doesn’t automatically give it to you, and be sure to mention the costs that they would save by you extending instead of taking a new contract to back up your request.

If you have questions on this topic or would like recommendations from us on a contract, extension, or working with travel recruiters/companies, please reach out to us and we will be happy to help!

 

Travel Therapy: Pros and Cons of Home Health

Written by Travis Kemper, PT, DPT

As travel therapists, there are a lot of opportunities to work in home health across the nation. And, the pay is usually pretty high which makes it an attractive option. It might be even more attractive for someone who is getting started as a new grad and looking at a large amount of debt to pay off. Recruiters often offer to submit new grad therapists to home health positions; but, as with everything, there are some positive and negatives to consider with home health therapy that should be taken into account before being submitted.

Here’s my take on working in home health after doing my first two travel physical therapy contracts in the setting. I will expand further on each bullet point below to give you a more comprehensive view of my thoughts, but here is an overview of the basics:

PROS:

  1. Even as a new grad, you have will the opportunity to dramatically improve the quality of care that patients are receiving in this setting.
  2. You can create closer relationships with patients than in most settings, and potentially make a larger impact on their personal lives than in other settings.
  3. You can make your own schedule, or at least have a significant amount of flexibility in your schedule.
  4. The pay is much higher than other areas of practice, although of course pay also depends on location.

CONS:

  1. On the flip side of #1 from the “pro” list, the con in this situation is that your colleagues may not be the best and your patients may not be receiving the best care across the board.
  2. There may be the potential for less growth as a clinician in this setting.
  3. Sometimes there are higher productivity requirements.
  4. There is more time spent in front of a computer than in other areas, and way more time being sedentary. The paperwork is much more intense than any other setting where I have worked.

 

Let’s take a closer look at the positive aspects of working in home health:

1. As a clinician, and even as a new grad, you can dramatically improve the quality of care that patients are receiving: This is in some ways a pro and a con.  The pro is obvious: you can literally be a rock-star clinician in home health on day one. I was told on numerous occasions, by numerous people, that I was the best home health provider that has ever come to see the patient. That’s awesome, and very rewarding for you as a clinician, but also incredibly sad. Check out the cons list below to see the flip side of this.

 

2. Potential for increased quality of relationships: I have patients/caregivers that still contact me from across the country to tell me how much they appreciate the work I did for them. There is a great potential to make a larger impact in your patients’ lives than in other settings. There is nothing in healthcare that can prepare you to see how a patient moves in his/her home environment. Sometimes you must get creative to make their homes work for them. I routinely helped patients redesign their living rooms to make them safer, and I also removed two bathroom doors because the patients’ assistive device would not fit through the door and the patients could not safely access the commode without a device.

 

3. More flexibility in your schedule: Because you can design how your day looks with visiting each patient, it allows things like making stops to the post office or other businesses that have daytime only hours much easier to manage. It also makes it easier to design a schedule that works for you as an individual, within reason.

 

4. Higher pay than other settings: This depends on the location, but home health is almost always one of the highest paying settings. This is a huge pro for choosing to work in this setting. More money, more options in life.

 

Let’s take a closer look at the negative aspects of working in home health:

1. Other clinicians in this setting may be sub-par: As I mentioned above, sometimes you can really stand out in home health as an amazing clinician, because unfortunately sometimes the patients are receiving sub-optimal care from other clinicians. Sometimes, depending on the team you are working with, you may have to perform tasks or communication for the patient that is more appropriate for another discipline, such as nursing, social work, or another therapist, or else the patient will not get the care they deserve. For example, at one point I worked with an OT who would perform an evaluation, make goals, and on the next visit perform a discharge stating all goals were met, when the patient had not received or been trained on half of the recommended equipment. This happened with several patients. Unfortunately, when providers are paid for quantity, as is the case with most home health companies (presumably because that is how insurance pays the company), quality of care will decrease from most providers. This caused me a lot of stress because I care about my patients, and I get incredibly frustrated when I see sub-par care.

Here’s a quote that I feel is appropriate to my experience in this situation: “People that aren’t used to quality always chase quantity.”- unknown

 

2. Potential for less growth as a clinician: When it comes to growth as a clinician, I believe you grow by seeing and interacting with other therapists as well as performing personal research, going to conferences, and earning CEUs. In home health, although you often work with a team, you are by yourself almost all the time. I truly feel that as a physical therapist, I did not grow nearly as much in this setting as in other settings where I have worked.

 

3. High productivity standards are standard: This has obvious downsides. I have only taken hourly positions in home health, but the company will still try to enforce productivity standards on you. This is the toughest thing, especially with the cons listed about your potential coworkers and why you can be a “rock-star” as a new grad, which requires extra work from you if you want you to provide the best care. This combined with last con on the list (see below) are the reasons that, unfortunately, I probably won’t be doing home health anymore.

 

4. Lastly, the paperwork is brutal! People have tried to tell me that it is no worse than other settings, but I have worked in just about every setting between clinicals and paid positions, and it is by far the worst in my opinion. Every day I would spend half my day documenting, and that was with doing as much as possible in the home with the patient.  Combine documentation time with drive time, and you have landed a sedentary profession. I chose a career with physical in the title. I don’t want to sit, and I hate computers!

Conclusion

Overall, I think home health can be a great place for the right person. If you’re very organized and don’t mind increased paperwork, you can make a huge impact in this setting right away and really feel you’ve provided a lot of value to your patients. But, there are definitely some cons to consider, and you want to make sure to ask all the right questions before going into a contract in home health.

I hope this helps you! Please feel free to reach out with any questions about home health here. I will happily look at your contract, set up a phone call to chat about home health, or provide any other assistance I can.

Stay tuned for a future post about specific questions I recommend asking during a home health interview!

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

Written by: Jared Casazza, PT, DPT

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

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

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

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

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

Example Situation Information

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

Income, Taxes, and Student Loan Payment

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

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

student loan repayment initial.png

income taxes initial.png

Optimized Scenario

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

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

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

student loan repayment $0

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

Implementation

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

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

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

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

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

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

Conclusion

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

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

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

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