I recently met with a business owner who seemed less than thrilled to have this meeting that his CPA insisted upon. I used to ignore the elephant in the room in these situations but, with three young kids, I have little time to waste. I just asked why he was taking the time away from the business to meet with me if he didn’t see the benefit. He replied, “I don’t know why I need a retirement plan if I don’t plan to retire. I’m going to work until I die.”
According to a Transamerica study from 2025, 52% of workers retired earlier than expected. Sixty-two is the median retirement age in the United States. Of the more than half of folks who retire early, about half do so because of changes at work. About a quarter leave due to health. The remaining 25% leave for a whole slew of reasons. I think you get where I’m going here. You can’t plan to work forever if more than half of people retire early for reasons that are largely out of their control.
Here are three questions to ask yourself so that you walk away with a real plan:
1. If I were forced out today, would I be okay?
Because I generally feel there aren’t enough acronyms in our industry (obviously kidding), I am now going to group everyone who wants to work until death as the “WUD” camp. I also think it’s important to differentiate these folks from those who retire from their profession and continue to work in some capacity. I think this is generally a good practice.
For team WUD, it is impossible to answer the question of whether you would be okay without knowing how much income you need on a monthly basis. In other words, what are your expenses? By telling yourself that you will work until you die, you give yourself permission to ignore your expenses because you know that they are less than your income. If income is greater than expenses, no need to plan, right?
Figuring out your expenses does not need to be a painful process. You don’t need a spreadsheet breaking down dry cleaning and dog food. Start with a total number. Look at your bank debits across two years. Most banks will provide this on an annual statement. Divide that total number by 24 and voila, that’s your number. I know this doesn’t tell you whether you’d be okay…yet.
2. Where is my financial finish line?
I’ve been toying with phrases to define what this number is. It could be your “freedom figure” or your “autonomy amount,” but as it relates to work, it is the amount you need to no longer have to work. Unfortunately, this number is not static because of inflation and the fact that the longer you work, the fewer years you need to fund once you retire. But I would think of work like a race. No one would run a race without a finish line. This number is a finish line. You are welcome to keep running once you hit it, but you don’t have to.
Here’s how you get there (all figures are made up):
Income sources (Social Security, pensions, etc.) ($5,000)
-Monthly expenses ($15,000)
= Income Gap ($10,000)
Gross up to account for taxes (25%) $13,300
Make it annual: $160,000
Assume a 4% withdrawal rate (or whatever you think is safe): $4,000,000
That is your financial finish line if you are trying to cover an income gap of $13,300 per month. I believe that everyone should know this number. Your career is like running a marathon. No sane person would run a marathon without knowing where the finish line is.
3. If I actually did die at my desk, would my family be okay?
Let’s say your WUD aspirations come to fruition. You need to ask yourself this question from both a qualitative and quantitative standpoint.
The business owner I mentioned at the beginning of the story ended up sticking on the call with me, and I think he actually had a decent time with it, but you’d have to ask him. I asked what would happen to the business if he dies with it. According to his estate plan, the kids would get it equally. Kudos to him for having this in writing. I asked if this would be a good situation. He told me it would be a disaster. More commonly, the spouse steps into the business. Ask yourself the question in that situation. More broadly, are your ducks in a row? If you died at your desk, would the business, and more importantly, the people that business supports, be okay?
On the financial side of things, this is a similar calculation to what we covered in number two. The math can become a bit cruel because the income streams typically go down by more than the expenses do. The exercise is exactly the same, but you have to change the numbers.
In retrospect, my tone toward team WUD seems a little disrespectful. I’m sorry. Ironically, I can totally relate. I am a business owner and understand that in almost all careers, so much of our identity is tied to what we do. When I was an employee, if you’d asked what I do, I’d have said, “I am a financial planner.” As an owner, I would reply: “I own a wealth management firm.” Life is hard to imagine without that title. Saying I’ll work until I die is easier than trying to figure out what’s next and whether or not I’m prepared for it financially.
This article is provided for informational and educational purposes only and should not be construed as investment, tax, or legal advice, or as a recommendation regarding any particular strategy. Whether a Roth conversion is appropriate depends on an individual’s financial circumstances, tax situation, investment objectives, and applicable law. Tax laws are subject to change and their application may vary. Examples discussed are hypothetical and are intended solely to illustrate general planning concepts. They do not reflect the experience of any specific client or guarantee future results. Consult your financial, tax, and legal advisors before implementing any strategy.