By my best calculations, going back to my piggy bank years, my personal spending has increased by 10% annually—and my assumption is that I will continue shelling out at this rate well into the future. Sure, I am a spender, but when you really think about it 10% is not crazy. Both hidden costs such as rising property taxes and obvious money pits such as kids factor into my 10%. Though I have only been tracking my spending in recent years, I suspect that subconsciously I have been aware of my rate because I have always managed my career and investments to accommodate it. What’s your number?

So When Can I Retire?

When planning for retirement, I have to make sure I have enough income-producing assets to provide a monthly income that grows annually by my 10% spending increase rate. Traditionally retirees give up their monthly paycheck and start living off their assets—so why am I planning to continue growing my assets in retirement? The answer, my friend, is simple: I hope to opt out of the rat race quite a bit earlier than the typical retirement age of 65 (and beyond). And with rising life expectancy rates, in spite of my stubborn refusal to eat anything green and leafy I anticipate being only about halfway down the road when I retire—which means that I cannot afford to start drawing down my retirement assets on Day One.

WTF What Is Your Point?

My point is that your retirement nest egg might need to be bigger than you think to maintain your lifestyle. I believe that tracking your spending increase each year and making projections into the future is a productive activity that will help you make career choices and investments to support your financial needs. Be warned, however, that factoring in this increase when thinking about retirement savings can be overwhelming—particularly if your rate is high like 10%—because the upshot is that you have to earn more each year while also increasing your investing and saving. Your 3% yearly raise is not going to be enough, but careful planning and smart decision making can keep you on track financially. How you live your life is up to you.