There’s a point where your investments are growing, your savings are consistent, and things are clearly moving in the right direction.

If you're not here yet, you will be. When you get there, you’ll expect it to feel different than it does. More certain. More settled. Like something has been figured out.

I remember the first time our investments hit $100K. I noticed it, felt good about it, and mentally moved on to $250K. That came and went too. On to the next.

I’m not going to pretend each milestone didn’t bring real excitement. But each one also left the same question sitting there.

The uncertainty didn’t go away. It just changed.

The Uncertainty Doesn’t Disappear

Early on, the uncertainty is fairly straightforward.

Will I be okay? Am I saving enough?

That starts to ease as savings grow. There’s more margin, more distance from a bad situation. But something else begins to take its place.

A few years after my wife and I moved into our home, things started to feel more settled. We had built something. The basics were covered. And that’s when we started having real conversations about what we were actually building toward.

We expected it to be easy to identify at that point. It wasn’t.

We disagreed here and there. Had different priorities occasionally. Still do. But we knew it was important to start looking at things with more intention, even without a clear answer.

The uncertainty hadn’t disappeared. It had shifted. From whether we’d be okay, to what okay was actually supposed to look like.

When the Decisions Change

As the margin grows, the decisions start to look different. The question moves from whether to spend to which options to pursue.

I’ve noticed this when trying to keep the pedal down on saving. When you’ve built a cushion and feel more secure, there’s a pull toward letting up a little. Maybe that’s even the right move at some point. But it’s easy to get distracted from actual goals when there’s money that could go toward extras instead of just covering the basics.

Adding another trip is easy to justify when you’re ahead of your savings target. But that assumes things will keep moving in a straight line. Investment returns, health, and circumstances rarely do.

The other place I’ve felt this is the home. My wife and I keep coming back to whether we should upgrade. We've stayed in our current place intentionally. The lower fixed costs give us the flexibility we both value. But a bigger home has become something we could actually make work now. That possibility has a pull to it that didn't exist before.

What Actually Changes

The decisions stayed the same. Having more cushion changed how I was willing to answer them. The bigger question of what we're actually building toward is still just as open as it ever was.

I used to be pretty rigid about spending, and saw it as something to minimize. My wife was the one with champagne tastes. I was the one trying to keep us on a beer budget.

I’m not sure exactly what shifted. Maybe it was Covid or my more recent back flare-ups that changed the way I thought about time. Maybe it’s where we sit financially now and the cushion that comes with it. Maybe my wife has rubbed off on me more than I’ve admitted.

Probably all of it.

I’m still always going to prioritize the future. That hasn’t changed. But I’ve found a more balanced approach with the present than I had ten years ago.

For years I kept our travel budget flat. Most of every raise or bonus went toward the future. More into savings, more into the brokerage account. The last couple of years that’s changed. A bigger portion of pay raises have started going toward the travel budget instead.

Some of it was practical. Inflation and preferences for slightly nicer places had made the old number feel tight. But some of it was intentional. A conscious decision to make sure we were investing in now too, and not just a future version of retirement where we hoped to travel. Our bonuses still mostly get deferred to the future. But the raises shifted, and that feels more aligned with where we are and what we want.

The number still matters. I just started paying more attention to what it was actually for.

More money gave me the ability to ask that question more honestly. It didn’t answer it.

That part is still mine to figure out.

— Brad

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice.

The decisions I make around financial independence (FI) are not just mine. I share every input that goes into my own FI equation with someone else.

I met my wife, Jamie, during our freshman year of college. We dated, graduated, moved in together, and got married about seven years in. Every stage of our relationship required decisions that impacted both our futures, financially and otherwise.

In school we had both wanted to study abroad, but I couldn’t make it work. I needed to graduate with a certain number of credits to eventually get my CPA license, and going abroad would have left me short unless I stayed for a fifth year.

Jamie was not thrilled when I told her I couldn’t make the semester abroad work.

She decided not to participate in the study abroad program either and chose another program that allowed her to spend a semester in DC for an internship. We were three hours apart that semester, but I was able to drive from Pennsylvania to DC to visit. It’s how we both started to fall in love with the DC area.

Jamie’s internship led to her career, so things worked out. She has almost forgiven me for skipping the study abroad program.

There was nothing saying Jamie couldn’t have gone abroad on her own. Or that I couldn’t have stayed a fifth year to make up for the credits. Nothing that said I couldn’t have changed my career plans entirely and done something other than becoming a CPA.

Any of those choices could have made sense.

But in the end, we made the decision together. We committed to each other, and that meant sacrificing, listening, and trying to understand one another.

What does this have to do with financial independence?

At the time I thought the ‘financial decision’ was the cost of going abroad and the extra year of school. But in hindsight, this was the decision everything financial got built on. The place we’d live. The careers we’d have. Whether I’d get my CPA. It even pushed us toward making those decisions together.

We didn’t know it then, but we were shaping our financial future before we had ever made a budget together.

That decision worked out. Plenty don’t. And sometimes the difference is not just the decision itself, but who you are making it with, how honestly you are making it, and whether both people are willing to carry the consequences together.

A couple’s financial future is not just about combining accounts. It is about combining direction and being the person your partner needs beside them.

My parents recently celebrated their 50^th wedding anniversary. When I told my dad I was going to start writing about the decisions around financial independence, his first comment was that I should make sure to talk about the importance of sharing and discussing financial decisions with the person you are building a life with.

This is the start of my efforts to address his request.

More to come.

— Brad

New here? Start here.

Or read more at The FI Equation.

If this way of thinking about financial independence resonates, subscribe for free to get future posts emailed each week.

This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

The first cold month of the year came with a huge heating bill. So we lowered the thermostat to 60 and wore layers indoors. Friends who visited thought we were living in a refrigerator.

I even tried lighting thirty candles in my room once hoping they’d generate enough heat to make a difference. The smoke got to be a bit much and the fire hazard potential became pretty obvious pretty quickly.

Still, the heating bills came in shockingly high. We later figured out the heat vent was positioned directly below the attic, which meant the furnace ran constantly without ever really warming the house.

We’d split the bill four ways and still each feel the hit. There wasn't much we could do about the vent or the furnace. We just paid it and hoped the next month would be better. It usually wasn't.

That’s how financial spikes work. You know they’re coming in some abstract sense. But when the bill actually arrives, the amount still lands like a surprise.

Years later my wife and I bought our first townhouse and the same feeling came back. She’d see a bill come in and turn to me, “hey, we have to pay this” and I’d feel that immediate anxiousness. Not panic, just the extra stress of figuring out where the money was coming from and whether anything else needed to move around to cover it.

It wasn’t that we didn’t have the money. It was that the money wasn’t where it needed to be when it needed to be there.

The same thing happened with car insurance, holiday spending, and anything else that hit once or twice a year in amounts that felt larger than a normal monthly expense. The math worked out fine over the course of a year. The timing didn’t.

The fix isn’t complicated. It’s just moving money in smaller, more consistent amounts before the bill arrives instead of scrambling to find it after.

For utility bills, many providers offer average or budget billing—a monthly amount based on your typical usage rather than the prior month’s actual consumption. The amount adjusts slightly over time to true up, but the swings disappear. For anyone in a place where a $300+ heating bill hitting in February creates real stress, it’s worth a phone call or a few minutes online to set it up.

For larger periodic expenses—car insurance, holiday spending, anything that arrives once or twice a year—the same logic applies. Divide the annual amount by twelve and move that amount into a separate account each month. When the bill arrives the money is already there. The surprise is gone.

You don’t need a separate account for every category. One account for irregular expenses covers most of it. The point isn’t the account structure. It’s the monthly habit of moving a small amount before you need it.

My wife and I have had a dedicated travel account for over fifteen years. We both contribute to it monthly. When we travel, I transfer from it. When my wife travels for work and needs to cover expenses before reimbursement comes through, it’s there.

We also use it for things that are part of how we travel. In Florence, I bought a leather jacket I hadn’t planned on. It was more than I’d ever spent on something for myself at that point, but we’d saved specifically for the trip and I wanted something that would mark the occasion, our honeymoon. Having the account meant I could say yes without second-guessing it.

What I’ve noticed over time is that the account does something beyond just covering expenses. The balance tells us what kind of travel year we can have. If it’s grown, we can take on something bigger. If we’ve had an active year, we know to pull back a little on the next one. It turned a recurring source of financial stress into something I actually look forward to managing.

That shift, from reactive to intentional, is what smoothing the spikes actually gives you.

None of these are complicated adjustments. They don’t require a new app, a financial advisor, or a perfect budget. They just require moving money in smaller amounts more consistently so the spikes stop feeling like surprises.

The stress that comes with a big unexpected bill isn’t usually about the money itself. It’s about the timing and the feeling of being caught off guard. Fix the timing and the stress tends to go with it.

What’s the next bill that’s going to catch you off guard? Whatever it is, you probably already know it’s coming.

— Brad

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

Time is doing the heavy lifting there, and time is one of the most powerful forces in any financial plan. The catch is that you don’t fully control it. You can’t reclaim the years before you started, and choosing to retire earlier shortens the runway rather than extending it. Most of your time is already set by when you began and when you want to stop.

Your savings rate is different. It’s just as powerful, and unlike time, it’s a lever you can still pull at almost any age. Part 1 looked at where the conventional 10-15% guidance came from and who it fits. This post is about the lever itself, and how to read what it’s doing for you.

Think about how a working life tends to unfold. You might start with debt to pay down and an income well below what you’ll earn later. Then the bigger expenses arrive: housing, family, repairs and emergencies.

Retirement savings gets pushed back, then pushed back again. For a lot of people, the early years simply don’t allow much. That’s exactly why the savings rate carries so much weight. It’s the input you can adjust once your situation allows it, at almost any age.

Working Both Sides at Once

By now you’ve hopefully found a recurring gap between what you earn and what you spend. That gap is your maximum possible savings rate, the ceiling on what you could set aside. What you save is a choice you still have to make. The gap only becomes a savings rate once you direct it toward the future instead of letting it sit or spending it elsewhere.

Once you’re saving it, that rate does more than any other input you control to determine whether and when you can stop working.

What makes it so powerful is that it works on both sides of the equation at the same time.

Every dollar you save gets time to grow, and as the opening showed, time does extraordinary things to a dollar.

Then there’s the other side. The more you save, the less you’re living on. And the less you live on, the smaller the pile you need before you can walk away.

A higher savings rate lowers the target at the same moment it speeds you toward it.

What That Looks Like in Dollars

Say your gross income is $80,000 and you save 10% of it. You’re setting aside $8,000 and living on $72,000. If you expect similar spending in retirement, you’ll be funding roughly that $72,000, 90% of gross income. Using the common benchmark of 25 times your annual spending, your FI number is $1.8 million.

Now raise the rate to 15%. You’re saving $12,000 a year instead of $8,000, and you’re living on $68,000, 85% of gross income. You’re putting more away each year, and your FI number falls to $1.7 million, because you’ve shown you can live on less.

Saving more fills the bucket faster. It also shrinks the bucket you’re trying to fill. The same five-point raise did both jobs at once, which is the whole reason this lever matters as much as it does.

Find Your Own Savings Rate

You may already know your savings rate or have a vague idea. If you haven’t calculated it recently or want to make sure what you think you’re saving is right, use the Savings Rate Calculator. It will help identify your current rate, including employer matches and other retirement contributions.

Most people couldn’t tell you their savings rate. Even fewer know what it’s buying them.

The number itself isn’t good or bad. It’s just an important step in seeing where you are, before figuring out if you need to adjust. A 10% savings rate might be exactly right for someone planning to work into their 60s. The same rate could limit someone hoping to leave full-time work by 55.

Every savings rate buys a different timeline. The question is whether yours is buying the one you want.

See What That Rate Buys

Now that you know your current savings rate, you can see if it aligns with the timeline you want. Open the FI Timeline tool and see for yourself.

It takes your age, gross income, savings rate, and what you’ve already saved, and shows roughly how long until financial independence (FI), where work becomes optional.

To keep the calculation simple and consistent, the tool does not include Social Security benefits. For many people, those benefits could meaningfully shorten the timeline shown.

Closing the Gap

If the tool shows a disparity between where you are and where you want to be, there are a few places to look.

You can raise your rate, saving a larger share of what you earn. That’s the lever this post has been about.

You can earn more, allowing the same savings rate to carry more weight.

You can move your timeline, accepting a later date and longer runway to grow your portfolio.

You can reconsider your target, asking honestly what kind of retirement you’re funding, and whether it needs to cost as much as you’ve assumed.

Which ones make sense for you depends on what you’re not willing to give up, and that’s not something a formula can tell you.

What Comes Next

Once you have a pace and a rough idea of where it's taking you, the next question is how simple or complicated you want the rest of it to be. More accounts, more strategies, more moving parts can all earn their place, but each one asks something of you in return.

If you haven’t checked out the FI Tools page on my site, please do. That’s where I’ll share free and interactive tools, like the two in this post. These tools are meant to help you work through your own FI equation and make clearer decisions with it. I’ll continue to build out additional tools, so keep checking back.

And you can always email me at brad@thefiequation.com if you have ideas or suggestions to improve any of the tools or content for the site.

— Brad

New here? Start here.

Or read more at The FI Equation.

If this way of thinking about financial independence resonates, subscribe for free to get future posts emailed each week.

This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

Whoever told you had a point but they didn’t have the whole picture. At best they handed you a starting point, a target, a benchmark to measure against. There’s just too much they couldn’t know: your trajectory, your priorities, how long you’ll live.

I don’t know those things about you either, and I won’t pretend to. That said, I do think it’s worth understanding where that number came from, because once you see what it was built to do, you can tell whether it was built for you.

Where You Heard It

The “save at least 10%” idea probably reached you through a parent, a teacher, or an HR rep handing out forms. Maybe an article about how unprepared most people are for retirement.

I remember filling out the 401(k) contribution line at my first accounting job. I marked 3%. A coworker who started the same week marked 10%. He was about ten years older, and when it came up, he gently pushed back on my number and suggested I make it more of a priority. He wasn’t trying to make me feel bad. He was passing along the same guidance someone had probably once handed him.

For me, that’s exactly what it did. It planted a seed. I left my contribution at 3% for the moment, and made a plan to raise it by at least a percentage point every year. The number itself mattered less than the nudge to start thinking long-term about where my money was going.

Why the Number Holds Up

The math behind 10% makes sense, for a particular set of assumptions.

Picture someone who starts working in their early 20s and plans to retire around 65, a career of 40 to 45 years. They likely won’t need to replace all of their pre-retirement income, since payroll taxes, retirement contributions, and the costs of working all fall away. Most planning lands on replacing 70 to 80% of pre-retirement income, with Social Security covering part of that and personal savings filling the rest.

Run those inputs over four decades of compounding, and a savings rate around 10% works for a lot of people. It’s the answer to a specific, reasonable question: how much do you need to save over a typical career to retire at 65 on something close to your current lifestyle?

Every Savings Rate Buys a Different Timeline

A savings rate isn't just a percentage of income. It's one of the biggest inputs determining how long you'll need to work.

One way to see this is to stop thinking about savings rate as a percentage and start thinking about it as time.

The chart below shows how long it takes to reach financial independence (FI) at different savings rates and starting portfolio sizes.

Start from zero and save 10%, and you can reach FI in about 44 to 46 years, roughly age 66 to 68 for a 22-year-old. Save 20% instead, and that drops to 33 to 35 years. That same 22-year-old could retire in their mid-to-late 50s. (An exit that early may need more than 70 to 80% replacement to bridge health insurance before Medicare, so treat the earliest numbers as a demonstration of the rate’s power more than a finished plan.)

This is why the guidance became standard: for someone who starts early and wants a traditional retirement, 10% genuinely works. Aiming for somewhere between 10-15% provides a little extra cushion for someone with a long time horizon to help if things don’t go as planned.

What About Those Starting Later

Most of us aren’t 22 anymore and likely didn’t save as much as we wish we had.

Fortunately, most of us aren’t starting from zero either.

The chart shows how much of a difference an existing portfolio makes. Someone saving 10% with 3× income already invested reaches FI roughly a decade sooner than someone starting with only 1× income.

Same savings rate. Different starting point. Different outcome.

That’s why late starters often need a higher savings rate than the traditional benchmark.

When the Question Changes

My dad once told me that during the years he was putting money away for me and my siblings’ college funds, there were stretches where our accounts held more than his own savings did. He couldn’t put as much toward his retirement then, because he was funding a different goal he cared about. He made up ground later. The point is that a lower rate at one point or another isn’t necessarily a failure. Sometimes it’s the right call for the life you’re living.

My own savings started slow. The 3% in my 401(k), a little toward an emergency fund, some other savings. My overall rate sat between 5-10% for a while, inching up each year.

It was a reasonable plan. Then I started wanting the option to stop working before my 60s while keeping the retirement my wife and I were already working toward.

That single change, pulling the date earlier, is what moved the math. If I’d planned to work longer, 10-15% would likely have funded the retirement I’m aiming for now. The driver was timing. I wanted the same kind of retirement, just sooner.

So I raised my rate. I kept increasing it each year, setting aside a portion of every raise and bonus so at least some of it went to long-term savings. That approach let my wife and me double our savings rate over each of the last two decades, helped along by careers that brought steady pay increases. Not everyone is in that position.

Here’s the part I have to stay honest about. The goalposts move. As a target comes within reach, there’s a pull to stretch further. When something becomes achievable, we tend to want a little more.

I’ve bumped up my retirement budget here and there. I weigh that increase against my current savings rate to determine if the tradeoff of needing to save more makes sense. For now, the balance between living today and funding tomorrow feels close to right. But I expect to keep revisiting it.

Rules of Thumb Are Answers. Check the Question.

The 10-15% guidance is an answer, and sometimes a good one, to a question you may or may not be asking.

Most financial rules of thumb work this way. Someone ran a calculation with reasonable assumptions and compressed the result into a number you could remember. Save 10% for retirement. Keep three to six months of expenses on hand for emergencies. Withdraw 4% a year in retirement so your money will last. These are all useful pieces of advice but might not always line up perfectly with your own FI equation. That’s why it’s worth the time to understand them and make some adjustments before you build a life around them.

You don’t have to settle your retirement vision today. It will move. Mine did and probably will again. What you have now is the ability to check, whenever you want, whether your pace and your destination still belong to the same plan. Most people never get that far.

Checking starts with a number: your own savings rate, measured the same way throughout this series, and what it’s actually doing for you. That’s Part 2.

— Brad

New here? Start here.

Or read more at The FI Equation.

If this way of thinking about financial independence resonates, subscribe for free to get future posts emailed each week.

This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

But there’s another version of getting this wrong. Some of us lean so far toward optimizing the future that we end up delaying the life we could be living now. Sometimes I find myself in this second group and have to pull myself back.

Living for the Future

There are decisions that clearly improve the outcome.

Saving a little more. Finding better returns. Lowering costs. Working a bit longer to build more margin.

Those decisions are easy to justify. They move things forward. Progress feels measurable. Like things are working.

And once something is working, it’s natural to keep leaning into it.

I’ve noticed that in my own decisions. It doesn’t even feel like an intentional strategy. It just becomes the direction things keep moving.

This is where optimization sometimes becomes a default decision-maker on its own.

If saving more is good, saving more than that must be better. If the plan is on track, tightening it up a bit more feels like the right move.

Over time, the focus shifts without really noticing it. Improving the outcome starts to take up more space.

But what tends to get missed is what you might regret later. If you reached your number tomorrow, would you regret how you spent today?

Even when not considering our finances, there are moments that might cause us to reflect on that same question. A sudden health scare. An aging parent’s decline. The loss of a friend.

Mine came on the side of a volcano. My wife and I were halfway up Mt. Etna, filming an eruption that had been building all morning, when the slow release of gas and ash we’d been watching turned into a thunderous explosion. We started running. I still have the video of the two of us scrambling for safety with the eruption going off behind us.

No one was hurt. It’s become one of those stories we tell often now, half disbelief and half laughter. But moments like that have a way of reminding you how quickly things can change.

Taking a Closer Look

Those moments have a way of making you look at your own decisions more closely. You take notice of where most of your attention has been going. What keeps getting pushed forward. What keeps getting delayed.

I found myself thinking about whether I had started to overemphasize one side of things without really meaning to.

Improving the outcome has real benefits. More flexibility later. More room for things to go wrong. More options when you get there.

Those decisions are what make a future possible in the first place. Without them, there isn’t much to trade off against.

At the same time, every decision that pushes further in that direction is pulling from somewhere else. More saved is less used. More time spent building something for the future is less time available now.

The tradeoff is always there, even when it doesn’t feel immediate. It’s easy to lose track of it when everything looks like it’s moving in the right direction.

I don’t think the issue is optimizing. It’s easy to see why it becomes the default. The results are visible. The path feels clear. There’s a sense that you’re doing things the right way.

The numbers give a feeling of control at exactly the moments when life makes it clear how little control there actually is.

What’s less visible is whether the direction still fits, and what might be getting less attention in the process.

That’s something I’ve been sitting with in some of the more everyday decisions too.

The Decisions in the Middle

At least once a year, my wife and I go back and forth on our home. Our home is one of those decisions that sits right in the middle of how we live now and what we’re building toward.

There are moments I lean toward doing a little more. Spending more to improve the space, or even thinking about whether we should find something bigger.

It’s easy to frame that as a better outcome. More space. More flexibility. Something that might fit future versions of our life more easily.

At the same time, our current home gives us something we both value. Lower fixed costs. More flexibility in how we use our money. Less pressure to maintain something larger than what we actually need day to day.

Neither direction feels obviously right. Each just pulls in a different way.

What we’ve come back to isn’t trying to get that decision exactly right. It’s paying more attention to what actually matters within it.

When Efficiency Isn’t the Point

We spend a lot of time outside on our patio. It’s where we unwind, where we talk, where things slow down a bit at the end of the day. So we’ve put more into that space than I expected we would when we first bought the house.

Better furniture. More plants and landscaping. More thought into how it feels to be out there.

That decision doesn’t really show up as an improvement in the outcome. It doesn’t make anything more efficient. It doesn’t move us closer to a higher number.

But it changes how we spend our time. More connected to what we care about.

I haven’t moved away from trying to make good decisions for the future. A comfortable retirement is still something I’m actively working toward.

But I’m recognizing that not every decision needs to be pushed as far as it can go in that direction.

Some decisions feel better when they're a little more connected to the life that's happening right now. The trouble is knowing when you've drifted too far in one direction. The decisions themselves still look reasonable on their own. They just start to stack in the same direction.

This is where I’m finding it helps to step back and look a little closer at what those decisions are doing beyond the outcome they’re improving.

My decisions don’t have to be optimal, but they should feel more consistent and connected to what matters to me.

I’m willing to work a couple extra months for what will hopefully be decades of mornings with my wife, sitting out on the patio we’ve built and love.

That tradeoff won’t show up as optimal anywhere.

It’s just one that feels more aligned with how we want to spend our time.

— Brad

New here? Start here.

Or read more at The FI Equation.

If this way of thinking about financial independence resonates, subscribe for free to get future posts emailed each week.

Subscribe now

This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice.

One of life’s simplest joys is putting your hand in a pants pocket and finding a $20 bill you didn’t know you had. It’s immediate and feels like a little victory. Like you just found something for nothing.

But it’s not actually free money. At some point, it was part of what you earned. It just got misplaced for a bit. You didn’t have a plan for it and now it will probably get spent without much thought.

Why does a dollar we find feel different from the dollars we earn? It’s the same money. The difference is that it isn’t being asked to do anything.

Most of our money doesn’t get that treatment. At least not once it starts to feel like it matters. A raise. A bonus. A few hundred dollars sitting in an account. An extra $1,000.

At some point the amount gets big enough that you stop and ask: what should I do with it?

There’s rarely just one answer. Every dollar ends up serving some purpose along the way. The real tension comes from having too many reasonable options:

• Save it

• Spend it

• Invest it

• Pay down debt

• Give it to a cause worth giving to

None of those are obviously wrong. That’s what makes it challenging, and why money sometimes ends up doing nothing at all. Spending a little more time lost in the pants pocket instead of getting to work.

The Familiar Advice

There’s no shortage of guidance on how to work through this. Most of it follows some version of a familiar sequence:

• Build an emergency fund

• Pay off high-interest debt

• Contribute to retirement

• Invest the rest

The advice itself isn’t really the issue. The sequence just assumes life follows an orderly progression. Complete one step and move to the next. In practice, priorities overlap and interrupt each other in ways the sequence doesn’t account for:

• Someone carrying credit card debt may also have no real emergency savings.

• Someone saving consistently may still feel unprepared for something unexpected.

• Someone may be doing everything right on paper and still not feel clear on what any of it is building toward.

In those situations, the issue usually isn’t knowledge. The sequence is familiar. The steps make sense. But when the steps don’t map cleanly onto the actual decision in front of you, the guidance starts to feel like it was written for a different situation. Not yours.

I ran into a version of this when my wife and I bought our home. The standard sequence would have pointed us toward building a safety net and paying down the mortgage. But what I was actually most concerned about was what would happen to the house if something happened to me.

So instead of following that order, we put money toward supplemental insurance. Enough that my wife would never have to worry about losing the home if I wasn’t around.

The sequence wasn’t wrong. It just didn’t account for what we were actually trying to solve for. That gap between what the order says to do and what the dollar actually needs to do can really matter.

A simpler way to look at it is that every dollar is being asked to do a job. Sometimes that job is stability or relief. Other times it’s building the future, preserving flexibility or improving life today:

• Building enough of a buffer that something small doesn’t turn into something bigger (stability)

• Paying down debt that’s been sitting there longer than it should (relief)

• Saving or investing to create more options later (future)

• Keeping access to your money so you’re not locked into one path (flexibility)

• Using money in a way that actually improves your day-to-day (life today)

Those aren’t categories you move through once. They’re competing uses for the same dollar. That competition between uses is the actual decision.

Money Has Its Limits

A dollar can’t do all those things at the same time. The moment you give it one job, you’re taking it away from another. Putting more toward debt means less for investing. Investing more means less flexibility today. Saving more often comes at the expense of using money now. None of those are inherently right or wrong, but each one carries a tradeoff whether it’s acknowledged or not.

If you go back to that $1,000, the “right” answer starts to look different depending on the situation. For someone with no real emergency savings, that dollar is probably doing its best work creating stability. For someone carrying credit card debt, that same dollar might be better used for relief. The math matters, but it's not the only thing at play. The reduction in stress and the certainty of the outcome tend to matter just as much.

Once a solid foundation is in place, the decision opens up. That dollar could go toward future growth, flexibility, or improving life today. At that point it’s less about following an order and more about deciding what matters most right now.

Two people in different situations might use that same dollar in completely different ways. Both decisions can make sense given what they’re trying to prioritize.

The same is true in reverse. A dollar can be doing the same thing for people in completely different circumstances. Someone who likes their job may choose to prioritize the present over building for later. Someone who knows their health is at higher risk than the next person may also want their dollars going more to now than later. Two different situations. Dollars doing the same job.

The supplemental insurance decision I mentioned earlier fits here too.

Once our net worth had grown enough that we could cover the remaining mortgage on our own, we canceled the policy and redirected that money elsewhere. Some people would look at that as money wasted. Years of premiums for a policy we never used. I’d still make the same call. The job that dollar needed to do was stability and peace of mind, and for a long time, that’s exactly what it did.

The sequence still isn’t wrong. It just doesn’t adjust well to the way decisions actually show up in real life. It tells you where money often goes first, but not what those dollars are doing or why that order matters in a specific situation.

The Next Dollar Is the FI Equation in Real Time

Financial independence (FI) gets framed in a similar way. Save enough, hit a number, and you’re done. But that outcome is built from decisions like this one, made repeatedly over time. How money gets used along the way shapes both how quickly you get there and what it looks like when you do.

When you decide to put your money toward one thing, you’re trading away another. Stability or growth. Now or later. Life you’re living or the one you’re building toward.

The question is which one needs the next dollar more right now, given where you actually are.

You don’t need a perfect order, and you don’t need to optimize every decision. But when a dollar gets used without that clarity, the trade-off is still happening. It just happens without you.

— Brad

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice.

There’s a version of Monday morning that doesn’t get talked about much.

No emails.
No meetings.
No one waiting on your approval.

For some, this is exactly what they’ve been working toward. Uninterrupted freedom. For others, it feels like a part of them would be missing, even if they haven’t experienced it yet.

A few years ago, my dad said something that stuck with me. He had been retired for a few years, and in the middle of a normal conversation, he mentioned that he missed feeling important on a regular basis. The way he used to feel when people would turn to him at work for advice. Where his input carried weight.

That role didn’t happen overnight. He spent decades building it, rising through banking to eventually become a CEO and leader in his community. And then, over a relatively short period of time, it was gone. Retiring was his decision. He’d spent plenty of time saving towards it and years looking forward to it. But leaving his job removed something that had been a large part of how he defined himself. His identity now had a bit of a hole to fill.

While my dad came to this realization after leaving his work-life behind, many still cling to their job identity like it’s their reason for showing up each day.

What Work Provides

No longer having a job doesn’t just change how time is spent. It can change how someone sees themselves.

A career fills more than a schedule. It creates structure, feedback, and a sense of direction. Over time, that builds into:

• a role people recognize

• a place where decisions matter

• a consistent signal that what you’re doing is important.

You likely won’t even notice it happening while you’re in it. Your identify and your job merging in the background, day after day.

When that structure disappears, there’s more freedom and flexibility, but there’s also less definition. Priorities aren’t assigned anymore. Progress isn’t measured the same way. The shift happens whether you’re ready for it or not.

Why Some People Don’t Step Away

For some people, there’s a real fear in their job title changing from something like business owner or C-suite exec to “retiree”. They aren’t quite sure who they are without the big title.

This is part of the reason some people continue working long after they no longer need the income. It’s not always about the money. Sometimes it’s about holding onto the role that gave shape to their time. To their identity.

Who are you when you’re no longer the person at work everyone depends on?
And how much of that answer have you already figured out?

The longer you stay, the easier it is to avoid the question.
The moment you leave, you have to answer it.

Continuing to work keeps that role intact. It preserves the structure, the recognition, and the sense of being needed. But it also delays having to figure out what replaces it.

What That Looks Like in Practice

This isn’t easy. I’ve been struggling with it myself for a long time.

I’ve tried to be more intentional about relationships, but that’s harder than it sounds. It requires effort on both sides, so it’s not always in my control.

I’ve looked for things that feel meaningful beyond just passing time. Ski trips and shared travel experiences give me a reason to get out, explore somewhere new, and reconnect with people I care about. But they’re expensive. So now that becomes another decision—something I have to plan and adjust for. And even then, it’s harder to do consistently while working full-time.

Lately, I’m trying to figure out what I care about enough to keep coming back to. For a while, I thought that might be more charity work and community involvement. And maybe it still will be. But somewhere along the way, I realized I’m even more drawn to writing and talking about personal finance—trying to help people think through the same kinds of decisions I’ve been working through myself.

I don’t have a clear answer yet, but I’m starting to see pieces of it. Putting together a few things that seem worth building around.

What Often Gets Ignored

We spend time thinking about potential investment returns, adjusting budgets and withdrawal rates, or modeling potential scenarios and assumptions.

We don’t spend nearly enough time considering our after-work identity. Which means the plan can work financially, and still leave a gap you weren’t expecting.

There’s a need to account for what replaces the structure that’s been there for decades, or how long it takes to build something new.

For most people, that gap stays hidden until it’s no longer avoidable.

Financial independence (FI) tends to be framed as the point where work becomes optional. That’s partially true, but there’s more happening here. The FI equation isn’t just about whether you can step away from work. It’s about what you’re stepping into. There’s now a need to fill the space that appears when a job is no longer required.

Some people already have a sense of what fills it. Others don’t. Work has consistently filled the time, so they haven’t seen much reason to.

The challenge is when this question only shows up at the end. When the structure is already gone and there’s no longer a gradual transition, just a clean break from something that’s been there for years.

Building it Before You Need It

Most of those doing well in their careers have thought about what they need to retire comfortably. Fewer have spent the same amount of time thinking about what actually comes next or what they could be building towards.

Yes, there’s a list of projects they want to get done, maybe some books to read and a few hobbies they’ve been meaning to explore. But there’s a difference between having things to do and having something that defines how you spend your time.

It would be nice to have an answer when someone at a party or get-together says, “What do you do?” that isn’t just “I’m retired.”

What will define who they are the way their work has for the last 20 years?

There’s a version of FI where nothing really changes except the absence of work. And there’s another where something has already started to take shape before that transition happens. The difference isn’t the number. It’s what’s been built alongside it.

What To Actually Solve For

This isn’t about deciding if you should keep your job or move on to the next chapter. It’s about understanding that for a long time, you’ve had a defined role and structure. That will likely shift and require a lot more self-direction.

It helps to think about identity in layers. There’s who you are at work: the role, the title, the expertise. But there’s also who you are to your family and friends, and who you are in your community. For most people those layers exist but work has been so dominant that the others haven’t had to carry much weight.

When work steps back, those other layers have to fill more of the space. The question worth asking before that happens is whether they’re already strong enough to do that, or whether they need more building.

Are you known for something outside of what you do professionally? Is there a role you play in your family or your community that would still feel meaningful without the job title behind it? If not, that’s worth paying attention to now rather than later.

Being intentional earlier tends to change how that transition feels. From there, building purpose or expanding identity gets a little easier.

Some people start to practice this before it becomes a hard stop. It gives them a chance to find meaning in things that don’t come with a title or performance review, and to see what doesn’t.

If the role you’re known for disappeared tomorrow, what would still feel like a meaningful way to spend your time?

And is that something you’re already doing, or something you haven’t figured out yet?

For a long time, the role answers the question for you.
After that, it’s yours to answer.

Stepping away gives you control of your time, but also removes the structure that made that time feel meaningful.

The hardest part might not be stepping away from work. It might be figuring out what replaces the role and identity you’ve spent years building.

— Brad

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice.

I’ll say, “I think I figured out a way for us to both retire a year earlier.”

And she’ll say, “Did you make coffee?”

I know this isn’t how most people spend a Sunday morning. But for some of us who find ourselves drawn to thinking about financial independence, it kind of is.

I’ve been this way for decades. If we’re going on a trip, I build an itinerary in Excel with reservations, confirmation numbers, booked time slots, and of course make sure to schedule enough time for unscheduled time.

When we take on a new debt like a car loan, I add it to an amortization spreadsheet so I can see exactly when each debt ends and roll that payment into the next one.

I even built a spreadsheet to figure out when we’d need to start saving for two kids to go to college. The thing is, I didn’t have kids at the time. I still don’t. I had a separate spreadsheet for that too. A timeline for when my wife and I would need to decide to even have kids, overlapping with the age range that made most sense to start trying if we did.

I hate to say it, but there wasn’t some horrible accident that made me this way. And as far as my parents will admit, they never dropped me on my head. This is just how I exist. I reach for a spreadsheet when life gets complex or uncertain, like a coping mechanism.

I say this not to highlight how different we may be, but to point out what we likely have in common.

Anyone who has thought about their financial future has probably felt some version of that uncertainty, whether it’s looking for reassurance, trying to gain control, or just a vague sense that there’s something you should be doing but haven’t gotten to yet. That feeling is pretty universal.

What isn’t universal is how people respond to it. For me it’s a spreadsheet. For others it might look completely different, or it might just mean putting it off a little longer.

I didn’t start off any different from where some of you may be. When I first started my career, and even a few years in, I didn’t have a well thought-out plan. I was periodically checking accounts, had a general sense of my savings and debts, and was trying to figure out how to balance what was available with the decisions we were making.

I knew what I had, but hadn’t started connecting any of it to a longer view of the future.

That started to change when life began adding up faster than I could casually track it. We got married. We were thinking about buying a place and moving out of our apartment.

There were conversations about whether we’d start a family. A few years later I got a promotion, and my wife was considering a job change. There were a lot of moving pieces, and passively glancing at account balances wasn’t cutting it anymore.

With so much uncertainty, I opened an Excel file and went to work. I entered our salaries and made assumptions about what the next several years might look like, projecting where we’d likely be when some of these decisions came due.

Then I inventoried our accounts—retirement accounts, savings, checking, a brokerage account—and tallied what we were contributing to each.

A few more assumptions about expected returns, how many years we’d still work, and how long we’d need the money to last, and I was most of the way to a simple plan I could actually follow.

That simple plan has grown considerably since then. What started as a way to get my arms around a lot of uncertainty has turned into a living document I update throughout the year, revisiting it when something changes or a decision is approaching.

The habit of returning to it is probably what’s made the difference. There’s a big gap between something you create once and set aside and something you keep coming back to.

Variables, tradeoffs, inputs that change the outcome. They were all there from the beginning. I was building my own FI equation before I even had a name for it.

Not everyone needs to build what I built. My spreadsheet has grown into something that works for me but wouldn't be easy to hand off as is.

But having some intentional framework you actually return to, one that meets you where you are and grows with you, is something I think most people would benefit from. Mine started simple. Yours can too.

I’m planning a few more posts on this topic and your input could help shape what I write about next. Whether you have a plan underway or are still looking for a starting point, I’d love to hear what part of financial planning still feels most unclear or out of reach. Feel free to leave a comment, or if you’d rather not post publicly, my email is always open at brad@thefiequation.com.

— Brad

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice.

You know that feeling after the holidays or maybe a weekend trip when you may have overindulged and are now scared to step on the scale and see the damage? Instead, you might avoid the scale completely. If you don’t look, it can’t be true right?

Here’s the thing though. That scale is going to know that I went back for a second helping of dessert. And if I’m honest with myself, I already do, too.

Many of us avoid looking at our current financial situation for this exact reason. The false belief that I can’t be behind if I don’t look at where I am.

I don’t think it would be shocking to know that many of us push things off, especially when we feel overwhelmed, unsure, or even fearful. Someone who knows they should be looking more into their finances, but still pushes it off, might be feeling all three.

And where does one even start?

Instead, many of us focus our energy elsewhere, on the things we can control and are more familiar with, like working hard and building a career. This likely even allows us to put something aside for a future that’s still being figured out.

That’s a decent starting point, though there’s still plenty of gaps that will continue to exist and possibly expand without a bit more intention.

If that sounds like you, it might be time to honestly look at where you are so you can stop navigating blind.

What ‘Starting’ Actually Means

When I took my own first look, I didn’t set out to build anything. I just wanted a few basic things in front of me so I could see where I stood.

I wanted to know where my money was. Spread across which accounts. What I owed and to whom. And then the one that mattered most: whether what was coming in each month was actually more than what was going out.

I wasn’t trying to make sweeping changes. I just needed to see it, so I could tell whether what I’d been doing was working or not.

Starting simple doesn’t mean it has to stay simple. But if complexity and uncertainty are what has been holding you back, a simple approach might be the right place to start.

1. Where is my money?

2. What do I owe?

3. Does my income exceed my expenses?

That’s it. That’s where I started.

This can be as simple as logging into the accounts you already have, including any you might have lost track of, like an old retirement plan from a former job. Check the balances to see what’s there and what you owe, then look at a month or two of what came in and went out.

There are tools that make it easier to track over time (I use Empower), but you don’t need one to take the first look.

Looking Is the Start; the Choices Come Next

The first two questions show you what you have. The third tells you whether you have room to do anything with it.

If more is coming in than going out, you have something to work with, and the choice becomes where to direct it. If it’s the other way around, that’s the first thing worth understanding, because nothing else can really move until that gap closes.

My own first look provided me with the realization that while I was exceeding my expenses each month, the gap was a bit smaller than I thought it would be.

I couldn’t increase what I was saving each month without making some other changes first. But I also realized that the monthly savings transfer I’d set up earlier that year was doable.

A separate look was still needed to determine if the monthly savings I’d established for myself was sufficient for the long-term, but that’s for another day.

Just seeing it laid out won’t fix anything on its own. But like stepping on the scale, it reveals the reality of where you stand. A first real benchmark. There’s a bit of relief in that, even if the gap is small or pointed the wrong way.

Knowing the true situation, good or bad, is its own kind of control. And the sooner you see it, the more time you have to correct course, or to accept where your current priorities are taking you.

That’s where every plan begins.

Yes, I’ve gone on to expand my plan. There are other posts where I go deeper into what else I’m currently capturing, the things I track now, and the areas I’ve added complexity. All of which help balance the decisions I make with where I am and where I want to be.

But just those first few inputs gave me the foundation I needed to see my financial picture more clearly.

That's the part worth remembering if you've been putting this off. The first look is smaller than the worry that surrounds it. Three questions and an honest answer. Whatever you've been afraid of finding, seeing it clearly is what finally lets you do something about it.

— Brad

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

Before my wife and I were married we lived together, and like most people she had credit cards with due dates scattered across the month. Seven cards, seven different due dates. Some at the beginning of the month. Some in the middle. Some at the end.

She's always been smart with her money. Two of those cards were her everyday cards, the ones she used for most purchases. The other five came out occasionally for their rewards or loyalty programs. It wasn't carelessness that created the problem. It was just the system that developed naturally from managing multiple cards.

It’s the default and nobody tells you to align them. You may not even have known that was an option. But leaving them as the default creates a problem.

Some months she’d overdraft. Other months she’d carry a balance rather than risk paying before her paycheck cleared. That meant interest charges on balances that should have been paid off entirely. The money was there. The timing wasn’t.

It was a simple fix. She went online for each card and moved the due dates. Now everything falls on two days that work with when she gets paid. The overdrafts stopped. The carried balances stopped. The interest charges stopped.

Nothing about what she earned or spent changed. Just the timing.

I took a slightly different approach. All of my credit card due dates fall on the same day. My automated savings transfers go out the same day too. When I had a car payment, that came out the same day as well.

Everything in one moment.

That requires keeping a little extra cushion in checking at all times so I can cover everything coming out at once without cutting it close. I keep a small buffer in a high yield savings account that I can transfer back quickly if I need it. For most people, spreading payments across two or three dates reduces that cushion requirement slightly. The tradeoff is more dates to track and more moments during the month where you need to know if you’re covered.

My wife uses two dates for exactly that reason. Her travel gets reimbursed by work, but reimbursements can be delayed. That creates swings in her credit card balances that don’t always align with when she gets paid. Two due dates gives her more flexibility to manage that without carrying balances forward.

There’s no single right answer. The right setup is the one that matches how your money actually moves.

Here’s what alignment actually gives you.

When everything comes out on the same day each month, your checking account balance at that moment tells you something. If it’s higher than last month, you netted positive. If it’s lower, you spent more than you brought in. If it’s roughly the same, you’re holding steady.

That pattern—higher, lower, flat—is easier to see than when payments are scattered across the month. A balance on the 14th means something different than a balance on the 3rd or the 27th. When you’re always checking at the same point in the cycle, the number actually means something consistent.

You can’t make good adjustments to something you can’t see clearly. Alignment doesn’t change what you earn or spend, but it does change how easy the pattern is to observe.

Once you see the pattern, you can do something with it.

This is a small adjustment. It costs nothing and takes a couple minutes of logging into your accounts to change a due date.

It’s the kind of input that changes what you’re able to see. And what you’re able to see shapes the decisions you make.

What does your checking account balance tell you right now? If the answer is “it depends on the day,” that might be worth fixing.

— Brad

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

If you needed to list out all the assumptions going into your financial plan, could you? Not just the ones you’ve set intentionally, but the ones you’ve accepted without questioning, and the ones you know you need but can’t fully answer yet.

Some came from things you heard or read. Others were educated guesses. Some may have just been the default value in a retirement calculator.

You make decisions about how much to save, how much to spend, and when you’d want to step away. While those decisions matter, what tends to get less attention are the assumptions they’re built on.

Each of those decisions has an assumption behind it, whether you realized it at the time or not.

• Decision: how much to invest. Assumption: what those investments will return.

• Decision: what kind of lifestyle you want. Assumption: what it will cost to maintain it.

• Decision: when you’d like to be done working. Assumption: what the years around that will look like.

Those assumptions might not feel like actual decisions you’re making. But they impact the outcome just as much as the decisions do. More important, changing just one assumption can reshape the outcome even if everything else stays the same.

Why Two Plans Can Look So Different

Two people can be saving the same amount and aiming for the same goal, but come up with very different timelines. One assumes higher returns and a lower spending need later. The other assumes more modest returns and builds in more room in their budget. Nothing about their effort changed, just the assumptions. The outcome looks completely different.

That’s part of what makes this tricky.

Assumptions don't come from one place and they don't all behave the same way. Some you've thought through intentionally. Most you're probably carrying around without ever really questioning. They're a mix, which means the outcome they produce is a mix too.

Some Assumptions Are Taught, Others Are Learned

Some of my assumptions came from my dad. He spent over 40 years in banking, has been a DIY investor and retirement planner most of his adult life, and shared a retirement projection spreadsheet with me years ago that shaped how I think about my own numbers. It helped me see things a generic calculator couldn’t capture — like what the gap between early retirement and Social Security looks like, or how to account for compensation that doesn’t change in a straight line.

His assumptions lean slightly conservative and I’ve borrowed some of that instinct. But I’ve also been willing to revisit mine as my own understanding has grown. The foundation was his. What I’ve built on it is mine.

Not all of it came from good decisions though.

I started investing right after the financial crisis. Not the most comfortable time to begin, but in some ways it turned out to be instructive. And in hindsight, the timing was pretty ideal.

My early investments did reasonably well. But I kept moving. When something gained, I’d sell and shift to something else. I didn’t want to give back what I’d made. I told myself I was being smart about it and locking in those gains.

Looking back, I wasn’t. I was reacting. For a lot of investors, the less you do the better the outcome tends to be. I was learning that the hard way.

That experience taught me something about my own assumptions that a calculator couldn’t. I had been assuming that staying active with my money was the same as staying smart about it. It wasn’t.

Placeholders, Not Permanents

We tend to focus on the FI number and treat it like the answer. In reality it’s just one version of the outcome based on the assumptions used. That’s easy to miss, because once the calculation is done it feels finished. The assumptions that created it don’t get the same attention. They stay in place, and we adjust our lives around that outcome.

It doesn't have to stay that way. I’ve gone back and adjusted my own assumptions before. Revised my withdrawal rate, expected returns, and what I think I’ll spend. Each change moved my timeline even though I hadn’t changed any of my actual behaviors. Just the assumptions.

Some of those adjustments have been straightforward. I’ve built in reduced spending at different points in retirement to account for the go-go, slow-go, and no-go years. Higher spending early when we’re active and healthy, pulling back later as that changes.

The assumptions are in my plan. But I’ll be honest: I haven’t fully connected those later-year spending reductions to what I’m currently saving toward. The assumption exists but it isn’t doing its full job yet. That’s a gap I still need to close.

Other assumptions I’m not ready to finalize yet. And won’t be for a while. When to claim Social Security is one. The right answer depends on how long I work, what my final earnings look like, whether benefits get reduced before I’m eligible, and how long my wife and I are likely to live. I can make an educated guess but I can’t set it with any real confidence yet.

Withdrawal strategy and Roth Conversion timing are similar. Both depend on tax rates, account balances, and retirement income that are still taking shape. These aren’t assumptions I’ve overlooked. They’re assumptions I can’t finalize yet because the information that would determine them is still being written.

That’s a different kind of placeholder than the ones I’ve already set. Not an assumption I made and forgot to revisit. An assumption I know I need but can’t complete yet.

Uncertainty is part of this, which means assumptions come with it. They’re guesses about things that haven’t happened yet. But they don’t have to stay fixed.

Think of them as placeholders that keep the calculation moving. Change them, and the result changes with them. It’s worth slowing down how those assumptions get set, and revisiting them as things change.

There are a few things worth doing when you look at your own assumptions:

• Identify and think through what they actually are

• Consider the assumptions you aren’t making

• Understand how each one affects the others, including the ones you haven’t fully set yet

Your assumptions aren’t perfect. But they’re not set in stone either. They’re shaping the outcome whether you’re paying attention or not.

— Brad

New here? Start here.

Or read more at The FI Equation.

If this way of thinking about financial independence resonates, subscribe for free to get future posts emailed each week.

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

There’s a game I play when the lottery gets big enough that it makes national news.

I ask my friends and family two questions:

1. Would you keep working if you won?

2. What would you do instead?

The first answer is usually quick.

Occasionally someone says yes, but when they do, it’s usually because their work already gives them something beyond a paycheck. It’s something they chose for reasons other than money.

Most people say no. For them, a job is often just that. Something they do because they need the income, even if it comes with decent pay or flexibility along the way.

But they still see it as just a job. So it's not surprising how quickly most people would walk away from it if that need disappeared.

What Comes Next

The second question is where things can get a little more challenging.

Some people have an answer ready and say it with excitement. They want to start a nonprofit. Open a restaurant. Make music. Do something they’ve clearly thought about before.

But a lot of people don’t have an answer at all.

“I have no idea.”

That was always my answer.

The question wasn’t really about my job. It was about what I’d build my time around if I no longer had to build it around work at all. That’s a different question. And one most people haven’t fully answered.

I have a good job and it treats me well. But the odds of me still reporting to work every day if money no longer mattered were pretty slim. I just didn’t know what I would do instead.

For a while, I assumed I was one of the few who hadn’t figured it out.

But the more I’ve talked with friends and others in similar situations, the more I’ve realized that’s not true.

There’s a group of people who feel the same way. Maybe even a silent majority who just don’t talk about it.

We look around and assume everyone else must have it figured out. That they’re satisfied. That they know what they would do. We stay quiet.

Why Just Winning Isn’t Enough

Winning the lottery doesn’t solve that problem. It removes the need to make money, but it doesn’t replace what money was supporting.

It doesn’t tell you what to do with your time, or what you’ll miss when the structure of work is gone. It won’t give you a signal for what will feel meaningful when you no longer need a paycheck.

It just removes the constraint. Instantly.

When everything changes overnight, you don’t get the chance to figure things out along the way. You’re left with a question you haven’t had time to explore. Only now you’re expected to already have an answer.

What Financial Independence Actually Gives You

Financial independence (FI) works differently. It’s a slow building process.

You’re not just accumulating assets. You start to notice things. What you enjoy. What you don’t. What you wish you had more time for. What actually feels worth your attention.

That awareness develops slowly, and with it comes your ability to adjust:

• Try something and realize it’s not what you expected.

• Change direction without it needing to be permanent.

• Begin to move away from things that don’t matter and toward things that might.

By the time you have the option to step away, you’re not starting from zero. You’ve already been moving in a direction.

You Don’t Figure It Out All at Once

There’s an assumption built into the lottery question. That if money were no longer a factor, you should already know what you would do instead.

It’s just the reality that most of us don’t have that answer.

You don’t discover what matters most in a single decision. This happens gradually, as you pay attention to how you’re actually spending your time, including what you’d choose to avoid if you had the option.

For me, that's become clearer through the decisions I've made and adjusted along the way. Spending time with my wife. Focusing on my health and connections with my family and friends. Writing about financial independence and what drives our decisions, which grew out of wanting to help people and my own personal interest in it.

Just as important has been recognizing what I want less of. Things like spending weekends cleaning the house, or working longer than I actually need to. Even minor ones, like a long drive home from the airport after an already long travel day, have shaped how I think about where we might live someday.

None of this showed up all at once. It came from trying things and noticing what I enjoyed and what I didn’t.

And it’s still evolving. I don’t need to be certain about any of it. I just need to see how these preferences start to influence my decisions.

That's where the FI equation begins to take shape. In how I prioritize things like paying for a cleaning service, choosing where I live, or thinking about whether I'd be open to working part-time in the future as a way to test my readiness for retirement. Decisions that can be adjusted as I learn more.

Nothing is set in stone. The equation changes as my decisions do.

Building toward financial independence gives you the space for that.

Revisit The Questions

The decisions you’re already making, including the ones you keep putting off, are telling you something.

Go back to those two questions. Would you keep working if money wasn’t a factor? And what would you do instead?

Pay attention to what comes up when you sit with those a bit longer than you might have before. What you keep coming back to, what you’ve been putting off, what you’d do more of if the excuse of not having time went away. And if there’s just silence, take note of that too.

That’s not nothing. That’s where the direction starts to take shape.

Winning the lottery removes the need to work. Working toward FI gives you time to figure out what fills the space it leaves. Otherwise retirement just becomes the absence of work, which sounds about as enjoyable as a job that just pays the bills.

— Brad

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

The last time I received a raise, I knew what to do. I had a plan with where the money would go and what it would be used for.

Part of it would go to taxes, and at least a quarter to half would go towards long-term savings. The rest was free to spend how I pleased.

That’s how I approached most raises and the occasional bonus. Some for Uncle Sam, some for future me, and some for now.

It’s hard to argue against that being a sound approach. It takes the guesswork out and keeps me in line. But I realized I was doing it on autopilot. I hadn’t reconsidered why that split made sense for me anymore. More importantly, I hadn’t considered what I was trading away by sticking to it.

The decision wasn’t just about how to split the money. It was about whether I wanted to prioritize life now or later.

Once you start looking for the tradeoffs, you’ll start seeing them everywhere:

• Where to live. Higher cost for lifestyle, or lower cost for flexibility.

• Change jobs. More money or more flexibility.

• Retire earlier. Gain time now or more security later.

Most of these decisions don’t have a clear right or wrong answer. It helps to think about the version of you that results from each choice.

The Tradeoffs You See

My wife and I both chose not to study abroad in college. For me it wasn’t just the cost. I needed 150 credits to qualify for my CPA, and going abroad would have meant a fifth year of school, summer courses, or extra coursework during my first years of working. The financial and practical tradeoffs were real and I could see them clearly at the time.

What I didn’t see as clearly was everything on the other side. The friendships you build when you’re living somewhere new with a group of people doing the same thing. The experiences that only make sense when you’re that age, in that moment.

We didn’t take our first international trip until our honeymoon, years later. We travel often now and stay at nicer places than we ever could have in college. But it’s a different experience. Some of what we would have had then, we can’t quite replicate now.

My wife had her own version of that tradeoff. She also chose not to go abroad, and for a while she regretted it. What she got instead was an internship in Washington D.C. that ended up shaping her entire career. A tradeoff she didn’t fully choose so much as stumble into, and it worked out in ways neither of us would have predicted.

Same decision. Very different outcomes. Neither of us saw the full picture at the time.

The Tradeoffs You Miss

New parents often talk about the version of themselves that existed before they decided to start a family. The same is true if you changed careers or moved to a new city. The old life ends, a new version begins. That’s part of the tradeoff.

You’re not just choosing between options. You’re choosing between outcomes. Each decision creates a different version of your future. And a new set of tradeoffs.

That’s easy to see in hindsight. It’s harder to recognize in the moment.

Most decisions don’t feel like tradeoffs at the time. People often just decide what feels like the right thing to do. But underneath that decision is another layer. You’re choosing one path over another and giving something up either way.

Circling back to how to divvy up my raise. When I set how much to save, I knew there was an amount I needed to put away and a goal I was working toward. The tradeoffs were still there whether I acknowledged them or not.

• Save the same percentage. I’m trading the chance to spend more now—on travel, experiences, more stuff.

• Spend more instead of save. I’m trading future flexibility.

We’re in a much stronger position now than we were early on. Some of that came from being disciplined about those raises and bonuses. Some of it came from keeping certain costs simple.

Take our home for example. It was a real stretch for us at first, but we’ve stayed in it and the breathing room it’s given us financially has been significant. It’s not something I thought much about at the time. Now my wife and I talk about it often.

That flexibility has allowed us to pull back a little and make more room for life now. We travel more. We’ve gotten more comfortable spending on things that matter to us. The tradeoffs are still there. We’ve just gotten better at choosing which ones we’re willing to accept.

You can’t eliminate tradeoffs. You can choose which ones you’re willing to accept.

Depending on where your savings are, you might decide you’ve built in enough flexibility already. Or you might decide that money is still better off going toward your future.

The last financial decision you made, did you consider the tradeoffs? Did you actually choose which ones you were willing to accept? Or was it an afterthought?

The tradeoffs are there either way. You just get to decide whether you see them or don’t.

— Brad

You've likely now made it through the Start Here posts. From here, everything else builds on these ideas. Explore the archive or subscribe for free to follow along as new posts come out each week.

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

The need to think about where we could and couldn’t afford to spend our money was always there. Going out meant finding happy hour specials or timing a visit to one of my wife’s work receptions where there was free food and a drink if you played it right.

Vacations meant driving to the beach for a long weekend. Flying somewhere for a week wasn’t in the conversation. We were putting just enough into our retirement plans to capture the employer match and not much more.

The script said save consistently, invest for the future, stay in a job with good compensation. We were doing all of it. It just didn’t feel like we were getting anywhere.

Then things shifted. My career was advancing. Promotions, raises, the way forward starting to feel real. And my wife made a career change that nearly doubled her salary. She started traveling for work and I could occasionally join her, which meant nicer hotels at no extra cost. Things that had required careful planning suddenly didn’t. The financial pressure lifted a bit.

And here’s what I expected to happen next: clarity.

More money meant more options. More options meant easier decisions. Easier decisions meant finally feeling like we were moving in the right direction.

That’s not quite what happened.

The savings started growing. The trajectory looked good. But the questions that followed weren’t the ones I expected.

Not “am I saving enough”. I knew the answer to that. The harder questions were underneath it.

Were the decisions I was making for the future the right ones to prioritize over living more fully now? Was the nest egg I was building actually going to lead to the future I wanted? I didn’t have a clear picture of what that future even looked like beyond a number I was supposed to hit.

Even my career felt a bit unresolved. I spent years on a path that could have led to partnership. I was close at one point. But during Covid—when how I worked changed and my wife took on a new role that shifted how we divided everything at home—I started seeing that path differently. Eventually I chose a different one.

That decision didn’t come from the financial plan. It came from finally slowing down enough to ask what I was actually building toward.

The financial progress was real. The certainty about whether it was the right progress wasn’t.

Most financial advice is good at telling you what to do. Save this percentage. Invest this way. Hit this number by this age.

What it’s less good at is helping you figure out whether the decisions behind those actions are pointed in the right direction for you specifically. Whether what you’re optimizing for is actually what you want. Whether the tradeoffs you’re making now will feel worth it later.

Those aren’t questions the script answers. They’re the ones that show up after you’ve been following it long enough to wonder if it’s taking you somewhere you actually want to go.

I still sit with that. The savings are growing, the timeline is taking shape, and I still find myself wondering whether the choices between now and retirement are the right ones. Whether it will all add up the way I’m expecting.

That uncertainty doesn’t mean something is wrong. It might just mean you’re paying attention.

If that feeling sounds familiar, there’s a way to look at this that helps.

— Brad

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Or read more at The FI Equation.

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

Sometimes you just feel stuck. You’re not directionless, you just can’t seem to move.

You might find yourself watching accounts grow without acting, running scenarios without deciding, or feeling close but never quite ready.

Maybe you haven’t even gotten to the point where there’s anything to watch. Some are so certain they’ll make the wrong move, they just stay put.

This might show up as:

• missing out on an employer match because you aren’t sure how much to contribute

• letting money sit in your checking account, slowly losing value to inflation

• delaying opening an investment account because you don’t know what to choose

So you sit and wait. The information to proceed must be somewhere. Once you find it, then you’ll move.

The real problem isn’t the lack of information. It’s the expectation that you need certainty before you act.

Think about the last decision you put off.

Was it really because you didn’t have enough information? Or because you didn’t want to be wrong?

What’s Behind the Behavior

A lot of what we learn early in life comes with some level of uncertainty.

Take driving.

You can follow the rules, pay attention, and do everything you’re supposed to do. Most of the time, that’s enough. But everyone understands that it doesn’t eliminate risk entirely. Accidents still happen, even when you’ve done everything right.

That possibility doesn’t stop you from getting in the car. It just becomes something you account for.

The same idea shows up in other parts of life.

You can follow a doctor’s advice, choose the recommended treatment, and still not get the outcome you hoped for. There’s uncertainty in how things play out, even when the decision itself is well-reasoned.

We don’t expect certainty in those situations. We accept that there’s some level of risk involved and move forward anyway.

But when it comes to decisions around our financial independence (FI), that expectation often changes.

Instead of approaching them the same way, it’s easy to start looking for a level of certainty that doesn’t exist. The expectation shifts from making a thoughtful decision to making one that can’t go wrong.

And when that becomes the standard, it becomes much harder to move at all.

I had this happen to me early in my career.

My first accounting job was fine, but I wasn’t learning as much as I should have been, or as quickly. I was falling behind some of my coworkers, and the situation probably wasn’t the right fit. But I kept delaying the decision to move on because I didn’t know if anywhere else would be any different, or maybe even worse.

Then people who joined the firm after me started getting promoted. Not me.

I thought about leaving. Then I’d reconsider. Another year passed. Still no promotion. Still I didn’t move.

It wasn’t until the financial crisis forced my hand that I finally took another job.

I was promoted within months.

That one still stings a little. And it’s hard not to wonder if I’d started moving sooner, would that promotion have come sooner too? And the pay bump that came with it?

The Tradeoff

When you start looking for a decision that can’t go wrong, waiting begins to feel like the safer choice. There’s time to gather more information, think through more scenarios, and avoid committing too early.

Waiting feels like the responsible thing to do, especially when trying to avoid being wrong. It creates a sense of being thoughtful and careful with decisions.

For a while, that can feel like progress. Before long, it creates a different set of tradeoffs. Delaying action takes time to reveal itself and can easily be overlooked.

The cost of waiting for certainty begins to appear as:

• years of missed growth

• decisions you never tested

• learned experiences you delayed

They tend to build quietly, in decisions that keep getting pushed out.

The contribution you haven’t increased.
The account you haven’t opened.
The change you’ve been meaning to make.

Eventually, that pattern starts to feel less like waiting and more like standing still.

Acting carries risk too. You might lose money, regret a decision, or have to adjust sooner than you expected. But taking action creates something waiting never will.

Information.

Even the bad outcomes can provide value. A person will often learn more from an investment that lost them money than one that performed well. Losses tend to reveal how you actually respond when things don’t go like you thought. Not how much risk you thought you could accept, but how much you actually can handle.

You begin to see how your assumptions hold up, how you respond to outcomes, and what you would do differently next time. Something you can use to improve future decisions and actions.

Over time, those adjustments start to move you closer to what you’re actually trying to solve for, even if the path isn’t as direct as you expected. You’re no longer trying to figure it out from the same place.

Be Careful

There's a natural tendency to judge decisions by their outcomes alone. A bad result means the decision was wrong. A good result means it was right.

That kind of outcome bias leads to the wrong conclusions.

The S&P 500 has dropped 20% roughly 25 times over the last 100 years. Someone who retired early and watched the market fall might conclude they made a mistake. In most years, the outcome would have looked completely different. Same decision. Different result.

So, was their decision wrong? Or were they just on the unlucky side of a range of possible outcomes?

The decision and the outcome aren’t the same thing. Confusing the two is where the thinking breaks down.

Recalculating

I have an embarrassing admission. I have a terrible sense of direction. It’s a running joke that if I have a 50/50 chance when turning left or right, I’ll pick the wrong one more often than I should.

I used to dread driving somewhere new because I didn’t want to get lost.

Then GPS became readily available, and everything changed. If I made a wrong turn, it recalculated and showed me a new way to keep going. I wasn’t lost. I was just recalculating.

I wasn’t any better at directions. I had just become more comfortable pivoting from one way to the next.

Too often we treat decisions like they are permanent and can't be corrected. A wrong turn isn't the end of the route. It's just a prompt to recalculate.

That’s what having a direction does. It doesn’t remove uncertainty, but it does make it manageable.

Staying Put vs. Getting Started

There’s a natural desire to balance the need for certainty with the desire to move forward.

At a certain point, waiting stops being about getting it right and starts to look more like avoiding decisions altogether.

A plan only becomes useful once it’s tested. The feedback you need doesn’t come from thinking through more scenarios. It comes from seeing how your decisions actually play out.

The goal isn’t to eliminate uncertainty. It’s to make decisions that can hold up across a range of possible outcomes.

Consider two people who want to start putting extra savings each month into a brokerage account.

Person A plans to wait until they better understand markets and the investments they want to make. Until then, their money stays in a checking account.

Person B doesn’t know much about markets or investing, but decides to invest part of their money now and sets up a recurring automatic transfer for future monthly amounts.

Even without calculating which outcome is better, there’s a difference in what each person learns—either by staying stopped or struggling forward.

Person A may build familiarity with concepts and follow what’s happening in the market, but their understanding remains somewhat abstract. Their money sits.

Person B starts to learn through experience. They see how they react when their investments fluctuate, begin to understand their tolerance for risk, and recognize what they would change going forward. Eventually, those adjustments begin to shape how they invest.

The difference isn’t that one of them had a better plan. It’s that Person B began to understand how their own FI equation actually works by using it.

By creating the brokerage account and setting up monthly transactions, they’ve built a system to learn, adjust, and improve.

The plan might not be what’s holding you back. It might be the expectation that you need to get it right before you start.

Don't wait for the perfect plan before you open the account, make the contribution, or take the job. You’ll learn more once you start moving and see what happens.

— Brad

New here? Start here.

Or read more at The FI Equation.

If this way of thinking about financial independence resonates, subscribe for free to get future posts emailed each week.

Subscribe now

This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

Even when things are going well—excelling at work, saving more than you used to, life feeling busy but balanced—you still feel unsure about the decisions you’re making.

I get it. The only person who wouldn’t be surprised by how often I’m looking at my finances is my wife.

You might be feeling this too. It’s hard to know if we’re making the right choices.

The questions probably sound familiar:

• Should I spend more now, or save it?

• Am I saving enough, or too much?

• Should I change jobs even though things are working?

• Am I any closer to what I want, or just further along the same path?

• What path am I even on, and am I happy with where I’m heading?

The questions pop up often, but the answers? Rarely. Or at least not without some intention.

Right now you, and many others working towards their financial independence (FI), probably reduce everything down to reaching a savings goal for retirement—your FI number.

Decisions get reduced to: does this help me reach it or not?

No, you’re not doing something wrong. There’s value in that. But it’s too narrow to guide your decisions.

I didn’t come up with my own framework for thinking about this overnight. For a long time I just followed what I thought I was supposed to do — save at least 10%, invest for the future, stay in a job with good compensation and security. Things I’d read or heard along the way. A script that made sense on the surface.

The problem was it didn’t always reflect what was actually happening.

There were stretches where my wife and I watched our savings grow while our spending grew right alongside it. We weren’t actually getting ahead. We were just moving faster on the same treadmill. The progress was visible. The feeling of getting somewhere wasn’t.

Then there were the milestone benchmarks. You’ve probably seen them. The ones that tell you how many times your salary you should have saved by 30, by 35, by 40. For years those numbers made me feel behind. My wife and I both knew we’d earn significantly more later in our careers, but in our 20s and 30s we couldn’t seem to measure up. I didn’t stop using them so much as I quietly decided they must be flawed for our situation.

It wasn’t until our 40s that we started actually hitting those milestones. By then our combined income was much larger than it had ever been, which made the targets harder to hit in a different way.

Just saving more or picking up a few tactics doesn’t really solve it either. It helps to look at it a little differently. An expanded view that doesn’t just work around the number.

Shift the focus to your decisions and what they’re built on.

Future posts will go deeper into this, but the core idea is this: the FI number alone won’t give you what you need. There’s a bigger equation at play. One that’s shaped by your decisions and how they connect to each other.

When those connections aren’t clear, it’s easy to keep making progress without ever feeling more certain about where it’s leading.

I still feel that. I can see the savings growing, watch the timeline take shape, and still find myself wondering whether the choices between now and retirement are the right ones. Whether it will all add up the way I’m expecting.

The progress is there. The clarity isn’t always.

— Brad

New here? Start here.

Or read more at The FI Equation.

If this way of thinking about financial independence resonates, subscribe for free to get future posts emailed each week.

Subscribe now

This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

Financial independence is the point where work becomes optional. Getting there is about more than reaching a number.

If you found this, you’re probably not starting from zero.

You may even be doing well. Your income has grown. You’re saving more than you used to.

And still, something feels off. You’re not doing something wrong, but it’s not always clear what it’s all adding up to. Or whether the decisions you’re making are pointing you in the right direction.

If that sounds familiar, these four posts are the best place to begin:

1. The Number Is Just the Beginning

   What financial independence (FI) actually means, why the simple calculation is just the starting point, and what the FI equation is built on.

2. You’re Doing the Right Things. So Why Doesn’t It Feel Like Enough?

   If you've ever felt the gap between making progress and feeling certain about where it's leading, this is the next step.

3. The FI Equation

   This introduces the lens. Financial independence isn’t just a number to reach. It’s something you’re constantly solving. A set of decisions, tradeoffs, and assumptions that shape the outcome over time.

4. Every Decision Has Its Tradeoffs

   Where the thinking becomes more tangible. Every decision creates a tradeoff, whether you can see it or not. This is where that starts to matter.

If this way of thinking resonates, explore more posts or subscribe for free to follow along.

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Ready to explore more? Browse all posts at The FI Equation. Or if you want to know more about me and why I started writing this, you can read that here.

— Brad

Retiring earlier doesn’t just mean you work less. It can require significantly more money and introduce a completely different set of tradeoffs.

That’s because financial independence (FI) isn’t just reaching a number. It’s an equation that keeps shifting as your life does.

Change the Inputs; Change the Outcome

Time is unique because it affects both sides of the equation at once.

Let’s look at an example to see this in action.

Mary is 57 and planning to retire at 64. Based on her current spending and savings trajectory, she’s on track to reach her FI number by then. But like a lot of people, Mary starts asking a simple question:

What if I retired earlier?

I ask myself this question all the time.

Let’s say instead of 64, she wants to retire at 59. That might seem like a straightforward decision.

Stop working five years sooner and give up those five years of additional savings. But it’s not that simple.

What Actually Changes

Retiring earlier doesn’t just shift the date. It changes multiple parts of the equation at once.

You’re giving up years of:

• Peak earnings (income)

• Compounding investments (savings)

And taking on years of:

• Additional withdrawals (expenses)

• Health insurance coverage (expenses)

Less income and savings, combined with higher expenses, means less margin for error if things don’t go as planned, and less flexibility. That’s where the tradeoffs become real.

This is the FI equation in action and why I think it’s so important to view it from this lens.

Why This Matters More Than It Seems

Those five years carry a lot of weight. Extending retirement by five years means:

• More exposure to market variability

• More time your plan needs to hold up

This isn’t a small adjustment. It’s starting to feel like a completely different equation.

The Tradeoff

Let’s make this more concrete.

Assume Mary currently has $1.2M saved and is saving an additional $80K per year for retirement. If we assume a 6% annual return:

• Scenario 1: If she retires at 64 (in 7 years), her portfolio grows to almost $2.5M

• Scenario 2: If she retires at 59 (in 2 years), her portfolio grows to about $1.5M

That’s nearly a $1M difference—from just five additional years.

What’s easy to miss is that this isn’t just five years of lost savings.

It’s about losing five years of compounding on your entire portfolio, while also adding five more years of withdrawals.

That’s why the gap becomes so large, so quickly.

To make this more tangible, assume a 5% withdrawal rate:

• Scenario 1: Retire at 64 with $2.5M portfolio at 5% withdrawal rate = $125K

• Scenario 2: Retire at 59 with $1.5M portfolio at 5% withdrawal rate = $75K

That’s not a small gap. It’s the difference in how much room she has and how often she has to think about what she spends.

Travel, helping family, even smaller decisions that repeat over time start to feel different with less margin.

In Scenario 1, she likely won’t think twice about stopping at her local coffee shop.

In Scenario 2, she may start to limit how often she goes.

Those small decisions add up. Not just financially, but in how her days feel.

Mary’s routine stops were more than just a coffee break. They connected her to the community. Gave her that energy boost that comes from interactions with the friendly and familiar locals she’d gotten to know over the years. Brought a little more enjoyment to her day.

Would she now stress about the growing cost each time instead of being in the moment?

With a smaller amount to spend, every choice carries a little more weight.

Time compounds in both directions. It can help you, but it can also work against you.
Even small changes in retirement timing can have outsized consequences.

Shrinking your time horizon to retirement means:

• Less time to build your portfolio

• More years your portfolio needs to support

Understanding the Decision:

So what is Mary really choosing?

If she retires at 59, she gets five additional years of freedom.

But she’s doing it with:

• Smaller portfolio

• Lower sustainable spending

• Longer time horizon to sustain it

If she waits until 64, she gives up those five years, but gains:

• Significantly larger portfolio

• More flexibility in spending and withdrawals

• Extra margin for error

Retiring early could easily mean giving up five of her most financially impactful years. It’s reasonable to think she’s probably making more later in her career than closer to the beginning or middle.

And remember that retiring earlier reduces your overall savings and increases the burden on those savings at the same time.

Another Cost to Consider:

But before you conclude that retiring earlier is the wrong choice, there’s one more factor to consider: opportunity cost.

For those not familiar, opportunity cost is what is given up (missed opportunity) by choosing one thing over the other. In Mary’s case, we know the financial opportunity cost would be greater if she retires early. We saw that in the example above. But what about nonfinancial costs?

I find the nonfinancial opportunity costs of working longer start feeling bigger when I’ve stepped away from the office for a bit and start thinking about all the work emails I’ll return to. How much nicer Monday morning might be if it didn’t involve “getting all caught up again.” The relief of waking up with ownership of how I want to spend the day. My day.

Delaying retirement isn’t risk-free. It assumes you’ll have the time, health, and circumstances to enjoy those extra years later.

Most people have seen or heard of situations playing out where that didn’t happen.

For some, the earlier years of retirement may be the most valuable. Energy is higher, options are broader, and more is still possible.

That doesn’t make retiring earlier right. But it does make the decision more than just a financial one.

Mary also has the power to adjust, by increasing savings or reducing spending, to shift the outcome.

Until you’ve considered the impacts on everything, including opportunity cost, you haven’t seen the whole picture.

Retiring earlier isn’t free. It’s paid for with either more effort towards saving, lower spending, or higher risk. But retiring later has its costs too.

Where Flexibility Comes In

Remember that this isn’t a binary decision.

Mary doesn’t have to choose between working full-time until 64 or stopping completely at 59.

She has options:

• Transition to part-time work

• Reduce spending in early retirement

• Delay certain expenses

• Adjust along the way

Each of those changes the equation, and that’s often overlooked.

A More Useful Way to Think About It

The idea of retiring earlier is appealing. But once you start to see what it requires, the decision becomes more nuanced.

It’s not just about leaving work sooner. It’s about what you’re willing to trade for that time.

Increase time in retirement, and the required resources go up. Adjust spending or income, and the equation shifts again.

If you’re thinking about retiring earlier, what are you really trading for those extra years?

What might become harder to do later than sooner?

It’s worth taking a closer look at what you’re really giving up and getting in return.

Remember, change the inputs, and you change the outcome.

— Brad

New here? Start here.

Or read more at The FI Equation.

If this way of thinking about financial independence resonates, subscribe for free to get future posts emailed each week.

Subscribe now

This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).

I followed the 4% rule for years without thinking much about it. It’s one of those ideas that’s widely accepted and rarely questioned. It shows up in almost every conversation about financial independence (FI). For many, it becomes the default starting point.

Developed by Bill Bengen in 1994, it was meant to answer a simple question:

How much could someone withdraw each year without running out of money?

But there’s an important detail that often gets glossed over. It was designed to work during the worst-case periods (the Great Depression and the high inflation of the 1970s). Not average conditions. Worst-case ones.

I’d missed this distinction myself until recently. And that’s when I started to see it differently.

How many of us want a lifelong plan that directly impacts how we live based on the worst-case scenario?

When you build a plan around worst-case scenarios, you’re not just protecting yourself. You’re shaping what your life looks like on the other side of that decision.

What Safety Actually Costs

For a long time, I followed the same thinking. Use 4%. Be conservative. Give yourself some margin. It felt responsible.

But being safe and being right aren’t the same.

At some point I started running the numbers on what staying at 4% actually required. How many more years my wife or I would need to keep working to build a portfolio large enough that 4% covered our expenses. How much more we'd need to save each year to get there. I wasn't comfortable with either answer.

Yes, 4% is safer than 5%. And 5% is safer than 6%. Lowering your withdrawal rate will always reduce the risk of running out of money. I’ve seen suggestions of 3%, even 2.5%.

Yes, we might experience low portfolio returns for a prolonged period.
Yes, something could happen that impacts our savings or spending.

But does that mean you should plan for something even more conservative than a strategy already built to survive the worst 30-year period ever experienced?

In the short term, maybe. Over the long term, it’s highly unlikely.

At some point, you have to ask whether you’re protecting your future or limiting it.

Not finding the right balance could be wasteful.

The 5 Iron on a Par 5

I have a significant slice with my driver. It’s bad enough that I stopped using it off the tee and started hitting my 5 iron instead, even on par 5s where most people would never consider it. Safer. More predictable. Fewer disasters.

Eventually I started avoiding the first tee altogether on days when I knew people were watching. At some point the plan to avoid the bad outcome started to affect whether I showed up at all.

That’s what over-conservatism does. It starts as a reasonable adjustment and gradually becomes the thing that keeps you from playing the game the way it was meant to be played.

Building a retirement plan around the worst-case scenario works the same way. The adjustment feels responsible. But over time it shapes what the plan allows, and what it quietly rules out.

The Assumptions Behind the Number

The 4% rule maintains several assumptions:

· Your spending stays relatively consistent

· You won’t adjust along the way (except to account for inflation)

· And you need to survive the worst financial environments we’ve ever seen.

That level of protection comes at a cost. More years working. More saving. More delaying decisions. All to solve for a version of the future that may never actually happen.

Not a likely outcome. Not even a moderately likely one. The worst-case version.

And it rarely stops at 4%.

The 4% rule doesn’t exist on its own. It gets layered with other conservative assumptions: higher spending estimates, lower expected returns, longer time horizons. Each one feels reasonable on its own, but together, they push the target out more than most people realize.

Many people don’t over-save because they’re disciplined. They over-save because they’re unsure. And while useful, the 4% rule can reinforce that uncertainty.

It Was Never Meant to Be Fixed

To be clear, I’m not saying the 4% rule is wrong. I’ve used it. I’ve referenced it in other posts. It’s simple, familiar, and works well for quick calculations.

But it’s not the only way to think about this.

I started noticing a pattern. Every few years a new wave of thinking would emerge recommending something even more conservative—3.5%, even 3%—based on current market conditions or sequence of returns risk. And then the markets would keep performing. And the conversation would quietly move on.

At some point I started wondering whether the conventional wisdom always knew as much as it sounded like it did.

That skepticism got reinforced when I learned that even Bill Bengen had updated his own thinking over time. His more recent work points to a higher safe withdrawal rate—closer to 4.7%—and suggests higher rates may be worth considering depending on assumptions and investment allocations.

It was never meant to be a fixed answer.

Lately, I’ve started using 5% as a baseline in my own thinking. It forces a different conversation. There's more risk involved, but there's also more optionality. More room to decide how to spend time and money rather than locking into a narrower path.

The Impact: 4% vs 5%

Let’s make this real.

Say you want to spend $100K per year in retirement.

At 4%, you need $2.5M.
At 5%, you need $2.0M.

That’s a $500K difference.

Run your own numbers at different withdrawal rates to see how the math changes for you.

For a lot of people, that’s not just a number. It’s years of working longer at a point in life where your time starts to feel more valuable.

Or look at it from the other angle. If you already have $2.5M saved, 4% supports $100K per year while 5% supports $125K.

That extra $25K means less hesitation and more saying yes to the things you want to do.

It’s not too hard to imagine which version of retirement feels better.

What Happens in Real Life

In practice, people don’t use fixed withdrawal rates.

They retire with a portfolio and spend what they need. If markets struggle, they adjust. If things go well, they loosen up.

I don’t build my margin only through the withdrawal rate. I build it in other places too. My budget includes a miscellaneous expense line I’ve deliberately set higher than I expect to need. I’ve bumped up the health insurance line to account for uncertainty there. And I’ve added to my travel and hobbies budget lines so I can spend more or less in a given year depending on our situation, health, and what the economy is doing.

The margin is there. It’s just distributed differently.

I’m not telling you to ignore the 4% rule entirely. It’s still a useful tool. In some environments, it may even be the right one. But there's a difference between using it as a starting point and treating it as the ceiling on what's possible.

Starting closer to 5%, or even above, means accepting more uncertainty. But it also reduces the risk of over-saving for a future that may never happen.

And like everything else in the FI equation, it’s changeable.

If you spend more early or markets don’t cooperate, you adjust. If things go well, you have more flexibility later.

The Other Risk

The risk of running out of money is real, and it should be taken seriously. But there’s another risk that doesn’t get talked about as much: spending years optimizing for safety and never actually using the flexibility you built.

When every assumption is conservative, the result isn’t cautious—it’s excessive.

A plan can work perfectly on paper but still not translate into a better life.

Are you stacking conservative assumptions on top of each other without realizing it? It’s worth looking at how they add up and what they’re costing you.

The 4% rule isn’t inherently bad. But it was designed to minimize failure. That's not the same as building the retirement you actually want.

When you build a plan around the worst-case scenario, you should be clear about what you’re giving up in return.

— Brad

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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).