Kevin O’Leary’s ’90-Day Number’ Rule for Retirement Saving

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Kevin O’Leary, known for his role on Shark Tank, has a straightforward method to help individuals plan and save for retirement: determining their “90-day number.”

Here’s a breakdown of how the strategy works and how you can start implementing it today.

Understanding the ’90-day number’ concept

The 90-day number approach involves totaling all your income from the past 90 days and subtracting all expenses incurred during the same period. As reported by The Street, a positive number indicates that you are living below your means and should consider increasing your retirement contributions. Conversely, a negative number suggests the need to cut back on spending.

While the 90-day number does not provide an exact timeline for retirement, it offers actionable steps for immediate implementation. This rule serves as a wake-up call for individuals who aspire to save more but find themselves hindered by excessive spending.

Advantages of a 90-day perspective over a monthly budget

While a monthly budget can serve a similar purpose, a 90-day view proves more beneficial as it accommodates irregular bills, seasonal financial variations, and income fluctuations. Unexpected expenses or windfalls in a specific month can distort the overall financial picture for the year.

The 90-day outlook helps mitigate the impact of one-time events and assesses the sustainability of your lifestyle. By keeping expenses in check, individuals can free up funds to bolster contributions to retirement accounts like 401(k)s and IRAs.

Optimizing retirement savings using the ’90-day number’

A positive 90-day number signifies a surplus that can be allocated towards retirement savings, particularly if you already have an emergency fund in place. Conversely, a negative number signals the need to cut back on expenses or explore additional income sources.

It’s essential to factor in expected Social Security benefits and tailor your financial plan based on your unique circumstances, including goals, risk tolerance, savings, and income levels.