Semi-Retirement with Traveling Healthcare

In continuation with my post last week on partial financial independence (FI), I wanted to show how powerful partial financial independence and traveling healthcare can be when combined together.  

So if you remember from my last post, partial FI, is basically when you have enough funds in your portfolio where you can take your foot off the gas and work less while still maintaining your portfolio.  Basically, you work enough to cover your annual expenses or some of your annual expenses and then let your portfolio do the rest. 

For many people, this lets them enjoy life more without the stress of their daily grind to work each day.  It allows them more time to spend with loved ones, to raise their kids, or to travel.  

It’s a powerful way to continue doing a job you may enjoy but without the burnout that many others experience. 

For the Traveler

For the normal traveler, like myself, we usually work in 13 week or quarterly contracts.  Sometimes longer, rarely shorter.  We work until the contract is completed.  At that point, we don’t owe anyone our time.  

We could extend our contract, find another contract, or take time away from work.  It’s the ultimate form of flexibility with work. Plus, travelers make much more than the permanent employee.

So what if we took a job as a traveling healthcare provider and applied it to the concept of partial FI  and we semi-retired?

Let’s see.

So if you remember from my 2019 financial summary post, I took home just under $84,000 in take home pay in 2019.  This was in the setting of outpatient PT which is traditionally the lowest paying setting for therapy.  This also included a 5 week vacation from work as I bummed around Boston.

So realistically this number could be much higher depending on your profession, setting, and time worked.  But since this is the field I know best, I’ll use this for my example.  If you work in a different field, all you will need is your individual take home pay before performing the same math for yourself. 

Example

So for this example, let’s say I only wanted to work 6 months out of the year because I wanted to travel the other 6 months.  (A real possibility)

In this example, it would mean I would need to work 26 weeks which would equate to half my take home pay, probably more as my taxable income would be even less.  But for example sake let’s say half. 

Semi-Retirement Take Home Pay: $42,000

And if you remember, I spend just under $30,000 per year right now.  Which likely would be less without money spent on gas, car maintenance, and other expenses associated with work. 

However, this wouldn’t include 6 months of healthcare expenses.  So let’s say $35,000 even though I would likely qualify for ACA insurance plans as my taxable income working 6 months would be extremely low, likely around $16,000. This is before standard deductions or pre-tax investments. 

Semi-Retirement Conservative Annual Spending: $35,000

Which would leave me around $7,000 per year to invest.  Which to keep it easy, we will say gets invested into a post-tax brokerage account. 

Semi-Retirement Annual Investing: $7,000

So right away, my living expenses are covered by only working half of the year.  I can afford my lifestyle, so I won’t need to worry about not being able to pay the bills at any point during my semi-retirement.

But what about reaching traditional retirement??

Well for me, my retirement number is about $1,000,000 which will assume that in traditional retirement I will spend around $40,000 annually. This accounts for some lifestyle inflation and a buffer if I do want to travel the world.  Which actually decreases expenses in many places due to geoarbitrage.

Traditional Retirement Target Portfolio: $1,000,000

So if I semi-retired today, when would I have $1,000,000 dollars in my portfolio? 

Well as I have roughly $150,000 in my portfolio currently, given a conservative 7% ROI and $7,000 annual contribution.  

If I semi-retired today, I would only need to work 6 months a year for just under 22 years.  

Years of Semi Retirement until Traditional Retirement: 22 Years

22 years isn’t bad, I’d be 50.  And I only would have had to work 3 years full time, with 22 years part time.  That’s not bad considering most people work full time well into their 50’s. 

But what if I wanted to work less than that? 

What if I worked full time for a few more years to build up my portfolio since I’m not burnt out yet and okay with a few more years of grinding. 

Given that I am able to invest around $50,000 per year right now with my income as a traveler, let’s say I work full time 3 more years.  

With 3 more years with $50,000 of annual contribution and a 7% ROI.  I would have roughly $355,000 in my portfolio.

Portfolio after 3 Years of Full Time Work: $355,000

Now, at this point, when I’m just over 30, I decide it’s time to semi-retire and only work 6 months out of the year.  

In this example, my portfolio would reach $1,000,000 in just under 12 years given the same $7,000 of annual contribution and a 7% ROI.

Years of Semi Retirement after 3 more Years of Full Time Work: 12 Years

I’d be 42.  Now that’s a number I would enjoy retiring at. With a grand total of 6 years of full time work and 12 years of part time work.

And at this point, who knows if I would want to be done working or not.  But the point is that I would have the choice to do so.  

This lifestyle buys me time.  From ages 30 to 42, I would work 6 months out of the year giving me time to travel and raise my future kids.  After 42, my time would be completely mine to do as I please. 

One More Example

Let’s do one more example, because I can.

What If I worked only ¼ of the year.  Meaning I only took one contract per year which would put my annual income at $21,000.  Meaning I would need my portfolio large enough to sustain $19,000 withdrawn every year to equal my projected $40,000 annual spend. 

Using the 4% Rule, this would put my target portfolio at $475,000.  Which would require me to work full time for 4.5 more years to reach.  Allowing me to then continue my working career working just 13 weeks out of the year. 

Performing Your Own Math

This math can be tweaked however we want to as well.  If you make more or less just plug in your numbers. If you spend more or less, just plug in your numbers. If you want to work full time longer or less, you can change the numbers as you see fit.  It’s all flexible and very person dependent.

If your portfolio is at $0 now, it doesn’t matter,  semi retirement is still a very real possibility for you as well.  

$0 Portfolio Example: So let’s say you work as a traveler making $85,000 per year take home, you have $0 saved, you invest $40,000 per year and you spend $45,000 per year.  

In this example, if you worked 15.5 years of full time work, you’ll be able to retire to traditional retirement with the necessary $1,125,000 to do so safely.  If you decided to work even 8 years full time, you’d have over $1,125,000 in your portfolio after 14 years of part time work if you cut your spending down to $42,000 annually… not bad.

It’s really just math.  And the math still works no matter where you are in the process.  You could run the same example if you were still in debt as well.  

Conclusion

IT’S JUST MATH.

And traveling healthcare helps swing the numbers in our favor.  Why grind your whole life if you don’t have to.  And you may love your job and love the grind right now.  And that’s awesome.  But this may not always be the case so you should at least run the numbers for yourself in case you ever change your mind.

Partial financial independence or partial retirement is just another tool we have to continue to design our best life!

If you need help getting started with traveling healthcare, feel free to reach out to me directly and I can help set you up with some awesome recruiters.   

fiscaltherapist1@gmail.com

If you have any other questions, feel free to comment below!