I love my job. Part of that love is that I also hate it sometimes. Maybe 10% of the time.

In the moments that make up the 10%, I’m usually bugged out about things like  tech issues or someone sending the wrong report. When that happens, I tend to remind myself of a little early retirement trick I developed a few years ago.

To my surprise, Mr. Money Mustache employed this same trick back when he was working his IT job. Maybe I’m not alone in this approach.

So, what’s the trick?

Figure out how many days of retirement you are earning with each day of work.

Work becomes much more bearable — especially when you’re deep in the trenches — if at the end of the day you can say, “Alright! 25 more days of retirement!

(That’s our actual number and feels AMAZING each day!)

This post might be a bit math heavy, but I promise, the end result is you’ll be able to know not only how many days of retirement you’re earning, but also, what a day of retirement at 65 costs you today.

(If you want access to an online site that handles the calculations for you – check out the comments where Loan Analyzer built a tool that let’s you put in your numbers. If you’re not quite sure what to make of it, read below and you’ll gain a clearer understanding of what the numbers mean.)

For us, the cost today for one day of retirement at 65 is $11.79.

Knowing that number makes it incredibly easy to spend wisely when we know, with certainty, what our opportunity cost is.

If you stick with me here, I’ll walk you through calculating what your numbers are.

First, let me go over 3 built-in assumptions to my formula:

3 Built-in Assumptions to the Formula

1. Our annual budget in retirement at age 65 is set at $40,000, excluding any potential income from outside sources such as Social Security. $40,000 is pretty high (in my option), given that the majority of retirees wish they had as much.

2. We have inflation increasing the cost of living each year at 2%. If I had more time I would explain how having a separate level of inflation for medical costs makes sense, especially in the United States, but for now, I’ll have 2% overall.

3. Annualized returns from our savings are at 8%, reflecting a large equity position gaining 6%, with ~2% dividends each year.

Okay, now that those assumptions are out of the way, let’s look at the formula.

How to Make Deferred Spending Feel Tangible Today

There are five steps to figure out the, “day worked earns X days of retirement,” calculation.

First, take the expected savings from this month and divide by the number of working days in the month, say 20. For us, we are taking our expected savings from the entire quarter over 60 working days.

Next, we take our annual budget and divide by 365. Our $40,000 budget turns into a cost of $109.59 per day.

Okay, the next two steps are tricky, but I promise, the final one is easy and liberating!

We need to build out two two different equations (tricky), then divide one over the other (easy)

Step three is take the result from step one, our savings per day, and multiple it by (1+i)^n, where i = expected market return and n = number of years to 65. Here’s a picture of our calculation:

Make Deferred Spending Feel Tangible Today - Photo 1


This number represents the future value of our savings today invested at the 8% return mentioned in the assumptions.

Step four is to take the cost of living per day today, and multiple it by (1+r)^n, where r = inflation and n = number of years to 65. Here’s our calculation:

Make Deferred Spending Feel Tangible Today - Photo 2

This value represents our expected cost of living, based on the 2% inflation assumption from earlier.

The final step, as promised, is easy. Take the results from step three and divide by the results from step four.

Make Deferred Spending Feel Tangible Today - Photo 3

This number is the number of extra days of retirement we earn per working day.

For us, that means everyday we come home from work, we have just saved enough money to comfortably afford another 24.9 days of retirement!

If our quarter shapes up as expected, that means we will have saved enough money for at least 1,494 days or 4.09 YEARS of retirement. All in ONE quarter!!!

Let’s take it back for a second to that moment I felt crummy at my job. You can now see how gratitude is only a thought away. Being aware of these numbers helps me to appreciate the power of frugality.

That’s how you make deferred spending feel more tangible today.

How to calculate the cost today for one day of retirement at 65.


Only one step here. Take the expected cost per day in the future, or step four above, and divide it by (1+i)^n, where i = expected market return and n= number of years to 65. Here’s our calculation (notice the picture says Step 3 in the numerator, but it should read, “Step 4”:

Make Deferred Spending Feel Tangible Today - Photo 4

Our cost per day at 65 is $11.79!

It makes it a lot easier to forgo that impulse purchase when we realize $12 buys us an entire day of retirement!

Okay, I apologize for all the math. This was actually more math than I use in my job as a CPA!

Make Deferred Spending More Tangible Today - Photo 5
Does it help to know how your savings today translate to physical days of financial freedom? Do you feel less inclined to spend impulsively when you know that same purchase can secure multiple days or weeks of your retirement?

Master Distiller

P.S. Thanks to Loan Analyzer in the comment for putting together an online tool that handles the math for you!

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