Working in Schools as a Travel Therapist

Written by Whitney Eakin, PT, DPT, ATC

For PT’s, OT’s, SLP’s and assistants interested in taking travel contracts working with pediatrics, sometimes these jobs can be harder to come by than other settings. The most common settings available for travel positions include home health, SNF, acute, and outpatient orthopedics. But for those looking to work in peds, school contracts may be a great option!

You might be wondering how school contracts are set up for a traveler. Do you have to work the full school year? What is the pay like? Do you get paid during school breaks? Since this setting is a bit different than others, we wanted to provide some key information to working in school contracts as a traveler.

The Basics of Working School Contracts

Most school contracts will typically be for the full school year, but some schools are open to just doing half the school year with the possibility of extending, or a little less than that even. Every situation is different, so if you’re unsure if you want to commit to a full year, work with your recruiter and the facility to find out what’s possible.

When school jobs are listed with an “ASAP” start date and it’s the middle of the school year, that contract would be from now or as soon as you could start, until the end of this school year. If you see a job listed with a July or August start, that would be for the upcoming school year.

Schools will typically have a very low facility cancellation rate, making it a pretty stable commitment on your end. This is helpful to know because as a traveler, you need to consider planning your housing for the duration of the contract.

The typical hours you will see for a school contract are between 35-37.5 hours per week. There are some contracts with 40 hour weeks, but it’s not usually the norm. Although most are not 40 hour guarantees, the rates are usually a bit higher in this setting which can help to offset the lower hours. This may bring your weekly take home to be similar or even better than a normal 40 hour work week in another setting.

A cool perk to working in schools is you have all of the school holidays off, so you know your days off in advance, and they are setup around desirable holidays/days people want to take off anyways. The uncool part of this, is you may not get paid during school holidays. So you will have to plan accordingly around this.

If you are off for the entire week for a school holiday (such as Spring Break or Winter Break), you will not be paid at all for that week. However, if you are off for only part of the week for the holiday, you may still receive your full week’s per diems, or part of the week’s per diems, in addition to the hourly pay for the days you did work. It’s important you clarify this with your travel company to understand how your pay will work around school holidays.

What Disciplines Are Most Needed?

The majority of school positions tend to be open for SLP, but there are options for PT’s, OT’s, PTA’s, and COTA’s as well. The market can vary across different states and school districts with different needs.

School positions often accept and support CF SLPs as well. However, this may or may not be a desirable setting for a lot of SLPs coming out of school that may be more interested in medical job settings.

What Questions Should I Ask During an Interview?

Not all travel therapy school positions are created equally. There are some important questions you should consider asking during your interview to decide if a contract is right for you, which might include:

  • How many children will be on caseload?
  • Who are the other staff members? (PT, OT, SLP, aids, etc.)
  • Have you had a travel therapist there before?
  • What is the facility like? (equipment, etc.)
  • What will my hours be?
  • Will I be covering more than one school?
  • What age groups will I be covering?

What Are Some Pros & Cons to Working School Contracts?

There are some benefits to working in schools pertaining to taking a longer (full school year) contract, which include more job stability; moving less often between contracts (as opposed to the typical 13 week travel contract); exploring an area for a longer period of time; and potentially saving on housing costs with a longer lease.

Another benefit is that you have planned time off to be able to take trips, and this time off is usually around holidays when you may want to spend time with family and friends.

Another potential benefit would be building your skill set in a different setting. This could be especially important with pending changes in Medicare, which could affect the market for settings such as Skilled Nursing Facilities.

However, for some people, there could be cons to taking a school contract. Some may consider committing to a full school year as limiting their ability to travel and see the country. They may also have fear of getting locked into a long contract without knowing if it’ll be the right fit for them. Fortunately for this concern, we as travelers have the option of a 14 or 30 day cancellation notice if placed in a bad situation.

Another con can be the paperwork and IEP meetings involved in working in schools. As with every setting, you have to take into consideration the documentation and meetings involved, which is the not-so-fun part of our jobs as healthcare providers.

And the last consideration would be not getting paid during school holidays. This may require some additional budgeting on the traveler’s part, or working with the recruiter to rearrange the pay package as needed. But for many travelers who tend to take a week or so off between their normal 13 week travel contracts to travel for leisure, relax and recharge, or go home to visit family and friends, these school breaks can provide the same thing, just structured a bit differently.

Is a School Contract Right for You as a Traveler?

Some clinicians absolutely love working with pediatrics and in the school setting. For others, this may be a totally new experience. As with any travel therapy job, you will have to take into consideration many factors when choosing if a particular school contract is right for you.

If you have questions or would like help getting started with your travel therapy journey, please contact us!

What to Look for in a Home Health Travel Therapy Contract

Written by Travis Kemper, PT, DPT

Home health can be a great option for travel therapists due to the abundant need for therapists to serve patients in this setting. If you are willing to take home health contracts, options for locations will open up dramatically at any given time, and usually you can command even higher pay than normal. To see if home health may work for you, check out my pros and cons article here.

Since home health is a bit different than other settings, you may be wondering what things you should look for in a home health contract and what questions you should ask in an interview for this setting. Here is a more in depth look at some important aspects of a home health contract that you should consider:

  • Training:
    • Find out how much training will be provided by the company. This is especially important if you don’t have prior experience in this setting.
    • Tips during training: Take the computer from your trainer and document as much as possible. You know how to be a therapist, but as I mentioned in the pros and cons article, there is a lot of documentation in home health, so you really want to start getting familiar with the system as soon as possible.
    • Of course, you should also pay attention to the differences in care that you’ll be providing in home health because there are some important safety issues to take note of during evaluations, but otherwise the therapy you’ll be providing is similar to other settings.
    • In our experience, my wife Julia and I have received about two weeks of training at the home health contracts we have taken.
  • Points system:
    • You want to find out how their productivity works, and if it’s on a points system vs. hourly vs. purely based on number of visits regardless of type. This is an important measure of productivity that is different from every other setting. Your company may assign a certain number of points to each type of visit based on the length of time they predict this visit taking (I am sure that it is also based on the reimbursement from insurance).
    • For example, the last home health contract we did had the following points system:
      • 2.5 points for start of care/OASIS
      • 1.5 points for evaluation
      • 1.25 for discharge
      • 1 point per regular visit
    • In a 40 hour week we were expected to complete 30 points at that company.  The numbers generally are similar to these from what I have heard from others. This is also how many full time and PRN employees are paid in home health instead of hourly/salary.
  • Travel Radius:
    • You want to find out how far you will be expected to drive and what areas you will be covering for your home health visits.
    • This is going to be the number one factor outside of your personal efficiencies with documentation and planning that is going to affect your productivity capabilities.
    • At our first contract, our travel radius was very similar and only about 15 miles from the office for either one of us. At our second contract, my radius stayed about the same, but the majority of my patients were located in a 10 mile radius of the city in my territory; while Julia’s was a larger territory, probably 20 miles, and her patients were more spread out as there was no main city in her territory.
    • This is something that is hard to figure out before you take a contract. We didn’t even know exactly where our territories were going to be when we took our second contract due to the huge territory the company covered. There were many days where I would only drive 15-25 miles in total, and Julia would drive 50-60 miles.
    • Obviously the more you drive, the tougher it is to hit your productivity standards. Your best bet is to ask how many miles you can expect to drive in a day/week in the interview. You can also ask around to find out about the area and the traffic before committing.
  • Mileage Reimbursement:
    • Find out if they reimburse for mileage and how much.
    • We do not recommend you take a home health position unless they are going to reimburse you for mileage.
    • You want to be making at least 50 cents per mile no matter what, and personally if I ever do home health again I will demand the government rate of 58 cents per mile. The mileage is not only for your gas consumption, but also for the wear and tear on your vehicle. If you are planning to do home health for an extended period of time, getting a fuel efficient vehicle is highly recommended as well.

These are a few of the key factors you want to consider when looking into taking a home health contract as a travel therapist. Home health can be a rewarding setting to work in, especially because it can be flexible for your lifestyle. But you want to make sure to ask the right questions so that you won’t be stretched too thin when it comes to number of visits, driving radius, gas, and wear and tear on your car. If you have more questions about working in home health, or have a specific job offer you’d like to discuss with us, please reach out to us for mentorship!

Travel Therapy Licensing Process

Written by Travis Kemper, PT, DPT with contributions by Whitney Eakin, PT, DPT, ATC


Licensing and housing are probably the two most frustrating and challenging aspects of being a travel healthcare professional. We will cover housing in future articles, but let’s dig in to the current state of licensing, and I’ll give an overview of how my wife Julia and I, as well as Jared and Whitney, have attempted to navigate licensing as traveling physical therapists thus far.

How Does Licensing Work as a Travel Therapist?

In general, if you want to work in a different state as a travel therapist, you need to get licensed in each individual state where you plan to work. There is a “PT Compact” license that has begun for physical therapists, which makes the licensing process much easier for those who are eligible for the compact. Some type of compact license is also in the works for occupational therapists, but has not been passed yet. But, with the exception of the small percentage of therapists that can take advantage of a compact (or multi-state) license currently, the rest of us have to take care of licensing the old fashioned way.

What does licensing entail? Generally, an application, a fee, sometimes a jurisprudence/law exam (usually can be taken online or sent in on paper, but some states require you to test at a testing center), sometimes fingerprinting, and sending in a lot of verifications including: school transcripts, original board exam scores, and verifications that your license is in good standing from all other states in which you are licensed.

In some cases, travel therapy companies can help with the licensing process. Generally, this means they will reimburse you for a license once you’ve obtained it yourself and have accepted a contract with their company in that state. Sometimes, they can help you with the licensing process up front, including paying some of the costs and doing some of the leg work for you. But this is usually only once you are already a current traveler of theirs and are looking into your next contract with them in a new state.

Our Approach to Licensing Thus Far

We certainly don’t have all the answers, and like housing, there are multiple approaches and techniques to the licensing process that can all be successful for different travelers at different times. As a couple, finding positions has generally been time consuming and difficult, and starting contracts when we want has been challenging. Our friends who travel solo have found it much easier to find positions in the states in which they are interested and in a more timely manner than we have.

At first, we decided to only look at quick license states, meaning that we could look for jobs in states that would allow us time to find the job first and then get the license second. Therefore, we would ensure that we were only paying for the license once the job was already secured, instead of wasting time and money getting licensed in several states without knowing if we would actually take a job there. This tactic was primarily because we were broke after grad school (I’m sure most of you can relate) and couldn’t afford to pay for multiple licenses out of our own pocket up front, with the hopes of taking positions in those locations and then getting reimbursed.

We started with our first license and job in Arizona, because that is our home state, and we were getting that license no matter what. Next, we went to South Carolina, because it was a quick license state.

A note about “quick license” states: They are quick once they get all your paperwork, but most still require paper verifications from your current licensed states, and this can be a very timely process in itself. Licensing makes me speak very negatively about our state governments when they take two weeks to print out and send a piece of paper that I paid them $15-$25 to send! In the case of South Carolina, our start date was delayed two weeks because of the license verification from Arizona.

After that fiasco, we became more proactive and decided to get licenses up front in West Virginia, Kentucky, Maryland, and Tennessee while on contract in South Carolina, so we would not have a delay again in starting our next contracts. This seemed like a great idea at the time, and we figured a couple thousand dollars we spent on these licenses could be recouped fairly quickly.

This once again turned out to be a losing plan, after taking two extra weeks to find positions, we finally accepted positions in New Mexico (notice New Mexico was not on the list of licenses we had!) and started that licensing process there due to not being able to even interview for any positions in the other states. Again, the other states where we were already licensed made getting this license expensive and time consuming. New Mexico also lost half of the documents that were sent in. Luckily, the staff there was actually helpful unlike other states (cough West Virginia cough), and after 8 hours on the phone, we were able to get our licenses pushed through even though they did not have all the physical documents that were required.

What We’ve Learned About Licensing

So, where are we currently with licenses and what have we learned? Well, as of this point we are back working in Arizona, and seeing as that is our home state, we will be keeping that license. We still have New Mexico and Kentucky, but will be letting Kentucky expire in March 2019 instead of renewing. We already let the rest of them expire instead of paying to renew them.

Right now we are in the process of getting our California licenses, because California is reportedly a gold mine for travel therapy couples, and it is a gorgeous state. The current plan is to hang out in California and Arizona until our home state of Arizona starts issuing compact license privileges, and then use the compact to be able to move around the country again.

You can find out more about the PT Licensure Compact here.

What About Jared and Whitney’s Experience?

So far, Whitney and Jared have had a little better go at licensing than us, for the most part. Similarly, they chose to start by working in their home state of Virginia. After that, they were methodical in their licensing choices, and chose to get licensed in advance in each state rather than wait until after they found jobs to get licensed. They always chose states based on trends of which states tended to have the most PT jobs, since they also travel as a couple.

They chose their next state, Massachusetts, based on seeing a lot of job options in that area, and that choice worked out well with them being able to find two jobs together for their desired start date after they were already licensed. Next, they chose North Carolina, for the same reason. They wanted to be in South Carolina, Georgia, or Florida ideally, but they were seeing a lot more jobs show up in pairs in North Carolina, so they went with that. And, that ended up being another good choice, with them able to start with two jobs in the same area right on time, after they were already licensed.

After North Carolina, they chose Illinois due to seeing a lot of jobs there in general, but this choice never quite panned out. They ended up letting this license lapse and never used it. For what ever reason, the timing wasn’t right and they weren’t able to nail down two jobs together in Illinois. Similarly, they got licensed in Arizona due to a high number of PT jobs, but so far the timing has not worked out for them to go to Arizona either. They plan to keep this license though and use it in the future.

So, their travels have been a little limited due to licensing restrictions, and they’ve only ended up working in Virginia, Massachusetts, and North Carolina so far in 3.5 years of being travel therapists. But, a big reason for this also is that they were risk averse, and did not want to waste a lot of money on licenses if they didn’t think they’d use them, so they’ve held off on some opportunities because of that.

They too are holding out for their home state of Virginia to start issuing compact license privileges, which will significantly open up their options. Otherwise, they plan to get one to two more licenses, including California and possibly Washington due to lots of PT opportunities in those states, making it more likely to find two jobs together as a pair.

Take Home Points

The licensing process can be challenging and frustrating as a travel therapist, especially when traveling as a pair. All of this is at least twice as easy if you are traveling as a solo healthcare professional, but you may still have some of the same challenges that we have faced.

In general, you have a few different strategies you can use to approach licensing, which include:

  1. Pick a state you think will have good job options, one at a time, and get licensed in advance. Have the license in hand, then start looking for jobs there.
  2. Look for jobs in quick license states, and then if you find a job, get the license there afterwards.
  3. Get a few different licenses up front to open up your options before starting to look for jobs.

Although this process can be cumbersome, it is still doable. Many therapists don’t have near the trouble Julia and I have had, especially those traveling by themselves. Jared and Whitney had a fairly easy time with licensing and job finding for the first 2+ years, and have only recently run into some hiccups. If you play your cards right, you’ll still have a great experience as a travel therapist, as long as you’re somewhat flexible and willing to go with the flow if setbacks do happen.

Let us know what strategies have worked or failed for you for licensing! We are always open to hearing ideas from fellow travelers. Have questions for us about licensing? Send us a message!

Pursuing Travel Therapy in 2019

Written by Whitney Eakin, PT, DPT, ATC


Are you thinking about starting travel therapy in 2019? You’re not alone!

The start of a new year is a popular time to be thinking about pursuing travel therapy. New grads who wrapped up in December or those looking forward to graduation in May are considering travel therapy. Experienced clinicians looking for a change in career path are considering it too. Maybe you’ve been thinking about it for a while, but now’s the time to finally jump in!

New year… new you… new job… new travels!

If you’re considering starting a travel therapy career in 2019, here are a few tips to help you get started:

1. Contact a few travel therapy companies & recruiters.

  • You need to talk with a few to find out who you like best and who you want to work with. You should do some research online and ask around, but it’s most important that you talk with the recruiters yourself and find out who fits best with you! Ask about the company benefits, in what areas they have jobs, and what a typical pay package looks like!
  • You’ll want to work with 2-3 usually at the same time to give you the best options for jobs. Remember, “working with” or “talking to” several companies does not lock you into being an employee of that company. You’re only committed to them when you take a contract with them!
  • If you would like our recommendations for travel therapy companies and recruiters we know and trust, send us a message!

2. Start researching states where you want to work.

  • It’s important to look at the job market and see where you are likely to find the best job for you. Some states tend to have more jobs than others, and some states will have more jobs in a particular setting than others.
  • You need to find out about the licensing process for each state and get started on licensing for where you want to go!

3. Do your homework on pay packages and tax laws.

  • You want to be an informed traveler and make sure you’re not being taken advantage of when it comes to pay. You also need to understand your own personal tax situation, as your recruiter may not be the best person to give you advice on this.
  • To learn more about how pay works as a travel therapist, check out this comprehensive guide to pay as a traveler.
  • We also recommend you read up on tax laws pertaining to working as a travel healthcare professional at TravelTax.com.

4. Start thinking about the logistics!

  • There’s a lot that goes into being a travel therapist. Where will you live while on assignment? Do you understand what a tax home is and have yours all set? What will you bring with you? When is your anticipated start date, and how much time will that give you to get from A to B? Are you traveling alone, or with pets, or with a significant other?
  • This is an exciting, stressful, fun, and crazy time! There’s a huge learning curve when you first get started, but once you get the hang of it and embrace the lifestyle it’s an amazing journey!

Do you have questions about getting started on your travel therapy journey? If you would like to learn more, check out our Ultimate Guide to Getting Started as a Travel Therapist.

If you have any questions about travel therapy or need advice on getting started, please feel free to reach out to us! We are happy to help!

Wishing you the best of luck in your travel therapy adventures in 2019!

~Travel Therapy Mentors Whitney, Jared, and Travis

What Kind of Travel Therapist Will You Be?

Written by Whitney Eakin, PT, DPT, ATC


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

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

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

What kind of travel therapist will you be?

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

In it for the Money

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

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

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

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

Are you planning to travel just for higher pay?

All about Schedule Flexibility

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

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

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

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

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

Adventure Junkies

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

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

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

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

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

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

The Social Butterfly

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

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

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

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

Are you searching for new connections?

The New Setting Hopper

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

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

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

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

What Kind of Travel Therapist Will You Be?

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

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

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!

 

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!