You Are No Longer A Slave When Your QSR Is Greater Than 1

"When I was still working professionally, every month clients would ask, “When can I retire?” My answer was always the same: “It depends on your QSR.”

Although I reached the ability to retire at 50, I didn’t stop working for income until I was 60. I enjoyed my work as a financial planner and investment advisor, and I was truly blessed to work with some outstanding younger associates who made going to work fun. My work had purpose, and I went home most days happy and fulfilled.

That said, the COVID shutdown changed my industry, and the regulatory environment under the Biden Administration became an ever-increasing source of irritation. So, when my associates offered to buy me out, I jumped at the chance.

Now in my second year of retirement—leading a troop of Trail Life USA boys, completing farm chores, babysitting grandkids, serving on the Frontier Institute board, doing volunteer work, playing guitar, and learning welding and woodworking—I am not bored.

I still do a little professional consulting, but it doesn’t interfere with my priorities. I have a rich and fulfilling life, and I am grateful.

I understand others are not so lucky. Many folks feel trapped in jobs that prevent them from doing the things that truly make them come alive. Instead of playing with grandkids, volunteering at the food bank, or traveling the world, they’re slaving away at a job whose only joy is a much-needed paycheck.

When I was still working professionally, every month clients would ask, “When can I retire?” My answer was always the same: “It depends on your QSR.”

QSR stands for “Quit Slaving Ratio.” It’s a simple formula that helps you determine when you can quit working for a paycheck. To safely retire, you want your QSR to be higher than 1.

To figure your QSR, take the monthly income you expect in retirement (Social Security, pension, rental income, investment income, etc.) and divide it by your anticipated monthly retirement expenses.

INCOME ÷ EXPENSES= QUIT SLAVING RATIO

Let’s look at two different couples considering early retirement.

Our first couple’s desired lifestyle will cost $8,000 per month in retirement. This allows them to take a couple of international trips per year, visit their children, buy gifts for their grandchildren, give generously to their church, and attend monthly music concerts put on by their local orchestra and chorale.

Assuming this couple expects:

• A small pension from Boeing: $900/mo
• Social Security income: $1,500/mo
• Spouse’s Social Security: $1,320/mo
• Rental home net income: $780/mo
• Investment portfolio worth $900,000, expected to generate $3,000/mo
  (calculated using the 4% rule: $900,000 × 4% ÷ 12 months = $3,000/mo)

Then their expected income in retirement is $7,500 per month. Therefore, their QSR looks like this:

$7,500/mo INCOME ÷ $8,000/mo EXPENSES = 0.9375 QSR

Because this couple’s QSR is less than 1, I would not recommend they retire just yet. Unless they either increase their monthly income by $500 (e.g., part-time work) or reduce their monthly expenses by the same amount (e.g., take only one international trip per year), their retirement years will include the anxiety that comes from consistently spending more than they receive.

Let’s take a look at another example.

Our second couple worked hard to pay off their mortgage a few years early, and they decided to drop their $2,000/mo health insurance in favor of enrolling in a health care sharing ministry for $600/mo. Both enjoy hiking, camping, and playing cards with friends and family. In this case, this couple will need $6,000 per month to fund their anticipated retirement.

Assuming this couple expects:

• A teacher’s pension for the wife: $3,200/mo
• Social Security income: $1,520/mo (wife)
• Social Security income: $1,360/mo (husband)
• Roth IRAs totaling $300,000, expected to generate $1,000/mo
  (calculated using the 4% rule: $300,000 × 4% ÷ 12 months = $1,000/mo)

Then their expected income in retirement is $7,080 per month. Therefore, their QSR looks like this:

$7080/mo INCOME ÷ $6000/mo EXPENSES = 1.18 QSR

Our second couple’s QSR is higher than 1, and I would tell them they could quit work today if it was preventing them from doing the things they would rather be doing instead. Even though our second couple has less income than our first, their QSR is still greater than one, so there is no need for them to be a slave to anyone.

I have many friends who continue to work well into their 60s and 70s because they enjoy working. One of the social challenges of being good at the jobs we enjoy is that employers see our value, and they offer us more and more money to take on greater responsibilities than we would like.

It is not uncommon for older, reliable workers to accept promotions at higher earnings they don’t need, merely because their employers offered the opportunities. When clients came in and announced they were retiring, I would often say, “I thought you liked your job; why are you quitting?”

The client would usually confess they liked their job at 40 hours a week, but the new promotion and higher salary meant working evenings and weekends, and the stress of management robbed them of their joy.

In those cases, I often suggested they go see their employer about working only 30 hours—with no exceptions—at the same hourly wage.

If the employer didn’t like it, they could always quit. Most of the time, the employer was happy to keep the good employee at the same high wage, even at reduced hours.

Sometimes the key to happiness is not to have zero work responsibilities—just less of them. People who are good at their jobs and have a QSR above 1 have lots of bargaining power. They have nothing to lose by offering a win-win for both the employer and the reliable employee.

I think nearly everyone wishes to have the ability to stop doing things they don’t enjoy or feel called to do. By first determining our QSRs when we are younger, and then working toward getting them above 1, we can ensure our later years are filled with activities that are fulfilling, enjoyable, and productive.

Freedom is achieved when our choices and behaviors move us closer to where we aspire to be, and QSRs above 1 give us the greatest assurance we will arrive there.