Make Work Optional

Financial Independence • Cash Flow and Debt Management • Emotional Intelligence

Director of Financial Planning • Enrolled Agent • Advisor

Intro comments on ‘work optional’

Two choices – Make More or Spend Less

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How Much Wealth is needed to make work optional?

Opportunity Cost

First, notice the subtle differences between the question above, and the question, “How much money do I need to retire?” There are a lot of folks who have enough money to retire comfortably, but who choose to continue working. Others would love nothing more than to “hang it up,” so that they can do anything but work. For many of us, we might feel one way when things are going well and quite different when they’re not, sometimes within the same week! Circumstances and attitudes can change quickly, even if you’re someone who cannot envision retiring. Your [spouse, boss, business partner, body, health, interests, or grandchildren] may have other plans for you!

Before trying to answer the titular question, first ask yourself, “What would I be doing if work was optional?” What if you had the option to take a job with lower pay that would bring you more enjoyment? What would that freedom mean to you?

My goal as a financial advisor is most often to make sure that my clients are on the path to growing their assets enough to make work optional sooner rather than later; your answer to these deeper questions is what should guide the work we do together and the decisions you make along the way. Even if you have a longer way to go before you can confidently stop working (realizing that many people never have the means to even have a choice), how can you do more of the things you want to do now?

What is the answer?

Let's make this happen

This seemingly complicated question can be boiled down to a simple, but powerful metric: your Total term score.

This single number estimates the number of years a person could live on his or her current assets if they did not grow. This includes your cash, investments, business value, and real estate equity (i.e. excluding personal and business debts).

Take a simple example of a person with $1M in assets, who spends $100k a year. Their Tt score would be 10.

Would you be comfortable if you stopped making income, knowing that you could afford to live your current lifestyle for 10 years?

Most people would say no.

What if you had $2M in assets and a Tt score of 20, would you be comfortable without earning an income then?

Perhaps if I’m 75 years old, but not if I’m 55 years old. Two people can have the same Tt score, yet be in very different situations.

Likewise, two people can have the same net worth and have very different outlooks depending on their spending habits.

There are only two ways to increase your Tt score: grow your assets or decrease your spending, and most folks would rather focus on the first input! So, while there’s beauty in the simplicity, the Tt score is not without nuance.



What is your Tt score?

What is your Tt score and what can it mean for you and your wealth?

Want to calculate your own net worth and Tt score, along with other key financial metrics?

Click here to create an account on Elements, and access our easy-to-use app.

Investment Returns & Inflation

Never run out of money?

You’d need to earn a 10% return above the rate of inflation (i.e. $1M * 10% = $100k. In other words, ignoring inflation, your 10% return would grow your $1M to $1.1M throughout the year, but you’d be withdrawing and spending that $100k in earnings, such that you would end the year exactly where you started. Could you reliably earn 10% + inflation every year so that you’ll never run out of money? The short answer is, no, unlikely. A 10% return on top of inflation, year after year, is too aggressive. While it’s certainly possible to achieve investment returns above 10% at times, what happens if your investments go down in a given year? Returns can be volatile, and you still have to live, so you’ll eat into your nest egg and need to cut expenses or go back to work.

What Tt score do I need to make work optional?

This is a personal question, and you want to make sure that you have a good understanding of your actual living expenses, some idea of what they will look like going forward, and whether you are willing to be flexible (i.e. adjust your spending if needed). But, to give a straightforward answer, most people target a Tt score of 25-30, at which point work can become optional at any age with investment returns of 4%-3.33%. This is a rule of thumb, not the end-all-be-all. Of course, none of us can be certain what our futures hold. We make the best decisions with the information available and then revisit them over time to be sure we’re on track.

It's that Easy?

Simple, yes. Easy, no.

Tt score may be the single most descriptive metric I look at as a financial adviser because it captures so much information in a single number. If your net worth is in the range of 25-30 times your annual spending, you should feel pretty good about declaring your financial independence and making work optional. 

Of course, other factors matter, and certainty is rarely on offer (in life or with money). This is especially true if you are on the borderline and stretching to retire early, or if your assets are concentrated and illiquid (like equity in your business and your home, or within retirement accounts that you cannot access without penalty until a certain age). On the other hand, perhaps you’d like to continue working, switch part-time, or have other sources of income: you might be able to make work optional well before reaching a Tt score of 25. Are your investment mix and the level of risk you are taking consistent with your goals and your situation? How might taxes now and in the future impact your ability to reach your goals sooner vs later? Is your spending really what you think it is, and how might that change over time? What about social security, healthcare, insurance…

Those are questions for another day, and before going there, remember to step back and focus on the bigger questions that will serve as your guide: 

  • What is your definition of wealth and a life well lived?

  • What would you be doing if work was optional, or if you felt the flexibility to take a different path now? 

  • What would that freedom mean to you and your family? 

What does your financial health look like?

Get started with our easy-to-use mobile app to create your own scorecard, and we’ll follow up with a few thoughts by email.

Working • Freelance • Retirement Ready • Retired

BBK Headshots

Cody Lachner, CFP®

Cody is a Lafayette-based financial advisor and joined the team in May of 2022 as our director of planning.  Cody serves his own clients and guides the enhancement of BBK’s financial planning department.

He was born and raised in northwestern Indiana and is a proud alumni of Westville High School and Purdue University.

Cody is an Enrolled Agent (EA) with the IRS which enables him to provide guidance and communicate with the IRS on tax matters on your behalf. He has also earned his Masters degree in Personal Financial Planning.  

Cody, and his wife, Julia, are a very active couple.  They love the great outdoors and their adventures have taken them on multiple backcountry trips in Alaska. 

Cody’s primary areas of specialization are in helping folks plan for early retirement (Financial Independence, Retire Early). He has helped many families become financially independent so they can spend more time pursuing their own outdoor interests. 

Please visit to learn more about Cody and his pursuit to help folks become financially independent.