Episode #675: Losing Agency Benefits When Starting Private Practice - Abundant Practice Podcast

Summary5 min read

Episode #675: Losing Agency Benefits When Starting Private Practice

Release Date: August 9, 2025

In this insightful episode of the Abundant Practice Podcast, host Allison Puryear tackles a common and often daunting concern among therapists: transitioning from the security of an agency job to the independence of private practice, particularly focusing on the challenges related to losing agency-provided benefits. Through a blend of financial analysis, practical advice, and emotional support, Allison guides listeners through the complexities of making this significant career shift.

1. Introduction to the Transition Challenge [04:30]

Allison opens the discussion by addressing the fundamental fear therapists face when considering a move to private practice—the loss of agency benefits such as health insurance, paid time off (PTO), and retirement plans. She empathizes with the apprehension, validating that these feelings are both normal and manageable.

"You're not being dramatic, you're not being reckless, you're being thoughtful. And that makes you exactly the kind of person who can run a private practice." ([04:45])

2. Financial Comparison: Agency vs. Private Practice [05:10]

Delving into the numbers, Allison provides a clear comparison between the financial realities of agency employment and private practice. Using US national averages, she outlines how private practice can be not only viable but potentially more lucrative.

Agency Salary Example: Assuming an average agency salary of $60,000 with benefits.
Private Practice Projection:
- Earnings: At $110 per session with 25 clients per week, a therapist can gross approximately $126,500 annually.
- Expenses: Typical business expenses total around $10,000 per year.
- Net Income: After accounting for expenses and taxes, the take-home pay could be between $70,000 and $72,000 annually, surpassing the agency salary by about $20,000.

"The free benefits that come with your job are not free. They might be costing you your peace, your health, your career satisfaction, time with your family." ([05:30])

3. Detailed Expense Breakdown [07:50]

Allison provides an in-depth look at the various expenses a private practitioner might incur:

Health Insurance: Approximately $7,200 per year ($600 per month) for an individual plan.
Retirement Contributions: Suggests allocating around $15,000 annually through options like SEP, IRA, or solo 401k.
S Corporation (S Corp) Considerations: For those earning over $80,000 in net profit, setting up an S Corp can lead to significant tax savings by allowing a split between salary and distributions.

"If you're making over $80,000 in net profit, setting up as an S Corp is often a very smart move." ([08:30])

4. Strategies to Mitigate Transition Challenges [09:10]

To alleviate the stress of losing agency benefits, Allison offers practical strategies:

Health Insurance Solutions: Utilize insurance brokers to find better plans without additional costs.
Retirement Planning: Engage with a financial advisor to set up retirement accounts tailored to personal needs.
Flexible PTO Systems: Create customizable PTO to ensure time off without financial strain.

"You get to create your own time off. These are not wild dreams. These are systems that you can put into place." ([09:45])

5. Gradual Transition: Starting Part-Time [10:30]

For those hesitant to dive in full-time, Allison recommends a gradual approach:

Part-Time Practice: Begin seeing clients during evenings or weekends while maintaining agency employment.
Building a Client Base: Slowly increase the private practice caseload to ensure financial stability.
Benefits Buffer Fund: Establish a financial cushion to support the transition period.

"If taking the leap into full private practice feels like too much, you can start part-time and build your caseload slowly while keeping your agency benefits." ([10:35])

6. Mindset and Emotional Empowerment [11:25]

Allison emphasizes the importance of mindset in overcoming fears associated with starting a private practice. She encourages therapists to view the transition as an opportunity for growth and empowerment.

"You are being brave enough to ask for more and you deserve more." ([11:40])

7. Resources and Support Systems [12:10]

Highlighting available resources, Allison points listeners towards her membership program, the Abundance Party, which offers step-by-step guidance, community support, and practical tools. Additionally, she mentions free worksheets and checklists available on AbundancePracticeBuilding.com to assist in the initial stages of setting up a private practice.

"If you want help building that bridge out of agency work and into private practice, come hang out with us in the Abundance Party. We've got roadmaps, community, real talk to get you there." ([12:25])

8. Conclusion and Encouragement [13:00]

Allison wraps up the episode by reaffirming that the transition from agency to private practice, while challenging, is entirely achievable. She urges therapists to take proactive steps, utilize available resources, and trust in their ability to create a fulfilling and prosperous private practice.

"Know that you are not alone. You have options. I'm rooting for you." ([13:00])

Notable Quotes with Timestamps

"You're not being dramatic, you're not being reckless, you're being thoughtful. And that makes you exactly the kind of person who can run a private practice." ([04:45])
"The free benefits that come with your job are not free. They might be costing you your peace, your health, your career satisfaction, time with your family." ([05:30])
"If you're making over $80,000 in net profit, setting up as an S Corp is often a very smart move." ([08:30])
"You get to create your own time off. These are not wild dreams. These are systems that you can put into place." ([09:45])
"If taking the leap into full private practice feels like too much, you can start part-time and build your caseload slowly while keeping your agency benefits." ([10:35])
"You are being brave enough to ask for more and you deserve more." ([11:40])
"If you want help building that bridge out of agency work and into private practice, come hang out with us in the Abundance Party. We've got roadmaps, community, real talk to get you there." ([12:25])
"Know that you are not alone. You have options. I'm rooting for you." ([13:00])

Resources Mentioned

Abundance Practice Building: Access free private practice checklists, worksheets, and more at www.abundancepracticebuilding.com.
Abundance Party Membership: For comprehensive support, join the Abundance Party at www.abundanceparty.com.
TherapyNotes Promotion: Try TherapyNotes free for two months using the promo code abundant at therapynotes.com.

This episode serves as a comprehensive guide for therapists contemplating the move from agency employment to private practice. By addressing both the financial and emotional aspects, Allison Puryear provides valuable insights and actionable strategies to empower listeners to make informed and confident career decisions.

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[00:00]
A
Foreign. Welcome to Ask Allison. Y' all ask the questions about having a fun and thriving practice and I answer them. We have a worksheet for you today so you can bring this answer into your life. You can Access that@AbundancePracticeBuilding.com links where you'll also be able to ask any questions you have for Ask Allison. If you want more support, we've got some free trainings in there too. If you can't get enough Ask Allison, check out our YouTube channel for our entire Ask Allison library. Welcome back to Ask Allison. Here's today's question. I'm currently working in an agency and really want to transition into private practice, but I'm feeling stuck because of the benefits. I have solid benefits right now and the idea of navigating health insurance and other coverage on my own feels overwhelming. I'd really appreciate any advice or insight on how to handle this transition. This is such a thing that keeps people stuck. I'm so excited you asked this. Okay, I'm. First, I Want to thank TherapyNotes for sponsoring Ask Allison. I've talked about them for years. I know their features, my heart. But here's what really sets them apart. They genuinely care about your experience. It's not just about troubleshooting. They actively implement user suggested features like secure messaging, clinical outcome tracking, real time insurance checks, and their AI feature, therapy fuel. Everyone at TherapyNotes believes in the product and wants you to love it too. Plus, they're independently owned, which means no venture capital, no pressure to prioritize investors over customers. This independence allows them to keep their prices fair, to focus on innovation and prioritize customer experience. With over 100,000 therapists already on board, they've proven you don't have to compromise success for quality. If you're ready to see for yourself, try TherapyNotes as your practice management system for free for two months with the code abundanttherapynotes.com okay, so when you're working in an agency and you want to move into private practice, but you're feeling stuck because of the benefits, this is like totally understandable. Health insurance, pto, maybe some retirement, that kind of stuff feels safe when it's provided for you. You don't have to make a lot of decisions in it. It's decided for you. The idea of navigating all of that solo is kind of overwhelming, so I want to validate that. First, you're not being dramatic, you're not being reckless, you're being thoughtful. And that makes you exactly the kind of person who can run a private practice. Well, so let's unpack this. Let's talk about the numbers, the mindset and the transition so you can stop spinning and start planning. Since I don't know your exact situation, I'm going to use US national averages for everything because we're going to go into numbers and money and I promise only like a little bit of math. Those free benefits that go with your job are not free. Yes, on paper you've got maybe $60,000 salary. We're using averages, remember, and benefits. But what are you paying for those benefits? Is it your time, your energy, your Sunday nights and your nervous system? The constant pressure to meet productivity quotas while getting paid less than you're worth? Those benefits may technically be free, but they might be costing you your peace, your health, your career satisfaction, time with your family. So let's look at what happens when you go out on your own. Let's say you're paneled with insurance companies that reimburse around $110 per session. This is the only number that I've changed from the national averages because I want to be really conservative here. $110 per session is below the average private insurance reimbursement rate. So if you make more than average in your job or you don't want to mess with taking insurance, know that this is kind of a low ball example. You can easily make twice as much per session as a private pay therapist. You can also see fewer clients that I'm about to describe, take more time off, etc. We're going with averages here. So at $110 per session, you see 25 clients a week and you take a very human six weeks off per year. That's sick leave, that's vacations, that's holidays. That's all of it. Okay, so here's the math. 25 clients times 46 weeks is 1,150 sessions. Okay, per year. 1,150 sessions per year times $110 is $126,500 per year. So you've just grossed over twice what you're making now in your agency job. But before we start popping the champagne and getting the confetti out, we got to talk about expenses. So here's what comes out of that $126,000 business expenses. The average a private practitioner spends on business expenses with their ehr, their liability insurance, ces, maybe some part time office space. It's weird because most people have a hybrid model. Back in the day you had like to pay full rent every month. For your space. But it's different now. So the average business expenses are about $10,000 per year, which honestly sounds low to me, but this is maybe average, right? Health insurance, $7,200 per year. That's about $600 a month for a decent individual plan. It goes up from there. If you're wrapping your family in retirement contribution, I'm just throwing 15,000 per year. That's what you decide to put away, not what an agency. Have no idea what matching looks like for agencies these days. S Corp payroll and admin cost when you're an S Corp and this is a whole other conversation we're going to lightly touch on, S Corps in a minute. When you're an S Corp you have to pay yourself as if you are an employee. And you also take dividends as if as the owner. Okay. So that costs money and administrative costs, that's about $1,200 a year payroll taxes. So Social Security, Medicare on the salary portion, about $10,710 a year. There's a lot of numbers. Stick with me, I promise I'm going to wrap it in a bow. Federal and state income tax, 17,000 to 18,000 a year. So let's pause on the S corp thing for a second. If you're making over $80,000 in net profit, setting up as an S corp is often a very smart move. So when you do that, instead of paying 15.3% and self employment tax on everything, you can like pay yourself a $70,000 a year salary like as a therapist who is employed by your business and then you can take $41,000 as distributions which are not subject to self employment tax. So it's a way of cutting down your tax liability and that split alone saves you thousands. Okay, let's do the total. Right, because that's a lot. But I want to give you receipts. So after all the expenses and taxes, what you're likely taking home in this scenario with a pretty low paying insurance is 70,000 to 72,000. That's what you're taking home after taxes, insurance, retirement, your office, EHR email, all that. That's about 20,000 more than you were taking home after taxes with your $60,000 a year agency job. And you give yourself six weeks off and you have full control over your schedule and better retirement options and you're working nearly half as many hours. So no, you didn't give yourself a $60,000 raise. You gave yourself a $20,000 raise, six weeks of paid vacation and your freaking life back. So let's talk about what's replaceable and what's customizable. Health insurance. You can use the marketplace or better yet, use an insurance broker. This is what I do, I use an insurance broker. They can often find better plans that aren't showing up on healthcare.gov, which is the marketplace. They get paid by the insurance companies so they don't cost you a dime. So you can find a local insurance broker and they can get you hooked up. Retirement, a SEP, IRA or a solo 401k. You get to contribute more than most agencies match. Plus you pick the plan. If that's overwhelming for you, I highly recommend just talking to a financial advisor that you pay hourly and they can help you like talk through that and even set your own system up. Pto, you get to create your own time off. In the numbers we just talked through, you took two weeks off and you still made 20k more than your current salary. And that's real paid time off. Like off, off, off. These are not wild dreams. These are systems that you can put into place. And if you're not currently saving for retirement, and here we have you putting, I think we said 15,000 a year into retirement. What that actually looks like is instead of $20,000 more per year, you're actually making 35,000 more per year. But I want you to put money into retirement. If this feels scary, that's okay. Fear doesn't mean don't do it. It just means do it carefully. So take your time. If taking the leap into full private practice feels like too much, you can start part time. You can see clients on evenings or weekends. You can build your caseload slowly while keeping your agency benefits. You can start a benefits buffer fund to give you confidence in the transition. We actually have an entire course in the abundance party about transitioning from full time agency work. When you've had a part time practice like making that shift, what I really want you to hear is that you are not stuck. You're in transition. Transitions are messy. Even if you're on the precipice of that transition, it stirs so much up in us. Yeah, you are so capable of creating what you want to create. Financially, emotionally, energetically. You're not being unrealistic. You are being brave enough to ask for more and you deserve more. We all deserve more than what agencies are typically able to provide, especially in our current political situation. So if you want help building that bridge out of agency work and into private practice, come hang out with us in the abundance party. We've got roadmaps Community Real talk to get you there. And if nothing else, I want you to know you're not alone. You have options. I'm rooting for you. Today's free worksheet is Common Fears. It is a quick reframe for some of the early common fears that come up in the beginning stages of private practice. Dm me the word sheets and I'll send you the link to that free worksheet. You also get all the other free worksheets when you do that. If you're listening, that link is in the Show Notes. If you're in the early stages, you need guidance on those beginning steps. Dm me the Word checklist and I'll send you our Getting Started checklist. That way you know you're setting things up in the best legal and ethical ways. All right, I wish you luck. Know that there are options and I'll talk to you soon. If you're ready for a much easier practice, Therapy Notes is the way to go. Go to therapynotes.com and use the promo code abundant for two months free. I hope that helped. If you have questions for Ask Allison or you want to get your hands on the worksheet for this episode, go to abundancepracticebuilding.com Links if you're listening, you probably need some support building your practice. If you're a super, grab our free checklist using the link in the Show Notes. I'd love for you to follow rate and review, but I really want you to share this episode with a therapist friend. Let's help all our colleagues build what they want.