Shockingly Simple Math of Retirement

Shockingly Simple Math of Retirement

Parkinson’s Law and Retirement

Parkinson’s Law states that work expands to fill the time available for its completion.

So true! If one has two weeks to do a project, I bet it will take 14 days! If it has to be done tomorrow, well, get ‘er done!

Have you heard of Parkinson’s Law before? What can we learn about retirement when contemplating its implications?

Let’s look at Parkinson’s Law, tie in the Shockingly Simple Math, and see what it all has to do with retirement.

The History of Parkinson’s Law

“It is a commonplace observation that work expands so as to fill the time available for its completion.”

So begins his 1955 essay where Cyril Northcote Parkinson eponymously coins his Law. He goes on to say:

The total effort which would occupy a busy man for three minutes all told may in this fashion leave another person prostrate after a day of doubt, anxiety and toil.

A busy person who knows what he or she wants finishes it. What application does Parkinson’s Law have to retirement? Let’s take a detour and look at the origin of Financial Independence—the Shockingly Simple Math—to find out.

Shockingly Simple Math and Retirement

MMM’s Shockingly Simple Math Behind Fire launched many down the path to Financial Independence. He boils it down to one factor: savings rate. Savings rate directly correlates with time until freedom.

Once you have seen his math, either your eyes are open and you can never go back, or, well, not.

Here it is:

Savings Rate = Income – Expenses

For me, it was thrilling and eye opening. Prior, I was just working. No real goal in mind. Sure, I had done well. But what was the point? Retirement? Who wants to think about that?

But Financial Independence—what a sweet goal! Once you have an end in mind—a goal—the rest falls into place.

What was the goal?

To save for retirement? To enjoy the process? Seriously?

Savings rate directly correlates with the time it will take to be financially independent. To chose your life’s work.

What does this mean in retirement?

Shockingly Simple Math and Parkinson’s Law

What is the Savings Rate in Retirement? It is Parkinson’s Law!

Instead of income and expenses, you have purpose and time.

Retirement = Purpose – Time

Work expands to fill the time available for its completion. What is the work of retirement? And how much time is available?

This is where it gets tricky, because the work of retirement is living and the time available is unknown.

This leads me to two conclusions:

  1. Figure out your purpose
  2. Do it now!

If all you have is time, then you better do it now! Or is that the right idea?

“Savings Rate” and Retirement

Mis-Representation of Parkinson’s Law

Figure 1 (A Common Mis-Representation of Parkinson’s Law)

If we replace effort above with purpose, is figure 1 how retirement is supposed to work?

Sure, this is a college freshman’s view of a term paper. Intense effort in the beginning, followed by the long tail of never completing the work.

Does this work for Financial Independence? Maybe! Massive effort in the beginning and then no ending.

How about with purpose in retirement? You see this is not ideal.

Another View of Parkinson’s Law in Retirement

Let’s look at the way a senior gets a term paper done.

shockingly simple math of retirement

Figure 2 (A Better Representation of Parkinson’s Law)

This is more like the seniors who know that graduation is eminent. They know how to knock a project out at the last minute. Or as you can see above, nothing is done early on, and then peak effort happens right before the end. And you run out of time.

Not an ideal way to run retirement either.

How the Shockingly Simple Math of Retirement Works

So, if you buy that savings rate is retirement, and income minus expenses is purpose minus time, what does the graph of both financial independence and retirement actually look like?

Parkinson’s Law in Retirement

Figure 3 (Parkinson’s Law in Retirement as Represented by the Compound Growth Curve)

In Financial Independence, small improvements compound over time and lead to freedom.

In retirement, constant attention to your purpose compounds over time as well, and the result is the life well lead.

Small, incremental improvements. Purpose and time. When does the time end?

Financial Corollary to Parkinson’s Law

Interestingly, there is actually a financial corollary to Parkinson’s Law: Spending Rises to Meet Income.

This is discussed as “life-style inflation” and cursed by the frugal as rotting of the soul.

Indulge me in adding a retirement corollary to Parkinson’s Law: Time Increases to Meet Purpose.

When “all you have is time” is incorrect, that is, you don’t know how much time you have, then purpose can only increase the time you do have. Purpose compounds and expands time.

Retirement Corollary to Parkinson’s Law

The Retirement Corollary to Parkinson’s Law:

Time Increases to Meet Purpose.

THIS is what Parkinson’s Law teaches us about Financial Independence and Retirement.

Early on, focus on savings rate to reach freedom.

Later, when you are free, purpose expands what time you have left.

If you don’t want to get something done, don’t set a time for its completion.

If all you have is time, will you be like the Freshman eager to knock out the work but never to finish it, the Senior late to the dance, or compound your purpose to make time infinite?

Posted in Financial Independence, Retirement and tagged , .


  1. Nice math!
    My conundrum now that I have reached FI is transitioning to noncareer focus. God and family and charitable giving remain central. FI is wonderful. Don’t get me wrong. So I’ve cut back to 3 day 24 hrs per week psychiatric practice which I really love at 60yo.
    But lol. I feel like I should embrace some new purposes now that I’ve reached this FI milestone. And not finding new purpose is failure. Maybe I’ve been on the wheel so long I don’t want to get off! Like I’m just another geriatric unable to adapt, waiting for for the next great adventure, death!
    I know. Nice existential problem to have. Lol.
    But am interested whether anyone else has had or anticipates having a similar conundrum.

  2. I retired at 60 and only work 8 hours a week on average. But I volunteer a good bit chairing a college board and a charitable foundation board that runs a hospice, medical clinic, health club, etc. I also volunteer with the university I attended and do various church activities. My retired wife and I also share many active hobbies like social and team tennis, pickleball, running, hiking and bushwhacking, off road trail riding, fishing and skiing. Generally my week is pretty filled with all of these activities plus I have a blog where I post about career, money and retirement. No way I could find time to work 24 hours a week! If you are married, I’d suggest finding some shared hobbies with your spouse that also keep you fit. There is a danger of growing apart without shared focus, and fun activities you do together has helped us stay close and engaged with each other. Of course we do the same activities with others as well. I sometimes think I should come up with some all consuming passion project, but so far I haven’t found one, and really I don’t feel like I’m missing anything.

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