Kevin O’Leary’s 90-Day Formula for Retirement Planning

Shark Tank star Kevin O’Leary offers a straightforward way to help people organize their retirement savings: calculate what he calls your “90-day number.”

Here’s how the method works and how it can be put into practice right away.

What the “90-day number” is

The approach involves totaling all income earned over the last 90 days and then subtracting all expenses from that same period, according to The Street’s coverage of O’Leary’s book. If the result is positive, it suggests you are spending less than you earn and may be able to increase retirement contributions. If the number is negative, it points to the need to cut spending.

The idea is not to forecast exactly when retirement will happen. Instead, it turns long-range planning into immediate actions. Depending on the result, it may encourage you either to save more for the future or to rein in spending so you can redirect more money toward retirement. O’Leary sees it as a wake-up call for people who want to save more but are letting expenses get in the way.

Why a 90-day review can work better than a monthly budget

You can apply the same method to a monthly budget, but a 90-day lookback can be more practical because it smooths out irregular bills, seasonal spending and swings in income. A single month may look weak if you face an unexpected vet bill or car repair, even in a financially strong year. On the other hand, a bonus can make one month appear unusually strong in a year that is otherwise less profitable.

By reducing the influence of one-time items, the 90-day view offers a clearer picture of whether your lifestyle is truly affordable. It also connects well with how much you can contribute to retirement accounts each year. If debt payments and overspending are eating up cash flow, it becomes harder to increase contributions. Keeping expenses under control can help you raise contributions to a 401(k), an IRA, or other retirement savings accounts, and possibly even max them out.

How to apply the number to retirement savings

If your calculation leaves you with a positive number, you may want to put some of that extra money into a 401(k) or IRA, especially if you already have an emergency fund covering at least three to six months of living expenses. A negative number can be a signal to cut costs, such as eating out less, or find ways to increase income.

You should also think about how much you expect from Social Security. And keep in mind that the best financial plan will depend on your goals, risk tolerance, savings and income.