As the announcement of our annual Cost of Living Adjustment (COLA) approaches, I’ve found myself thinking through the possible outcomes. It’ll likely land somewhere between 1% and 3%—already an improvement over last year, when I received 0% as a new hire. Still, with inflation averaging around 4% in recent years, it’s easy to feel like I’m falling behind.
But that isn’t the full picture.
This morning, while updating my net worth, I spent some time using a calculator I built to project its future growth and estimate what a 4% withdrawal could provide at different points in my life. One thing immediately stood out: year after year, my projected retirement income increases by far more than any annual raise I’ve received from an employer.
That realization changed my perspective.
By consistently investing and allowing compound growth to do its work, I’m effectively creating my own raise. Every dollar invested today has the potential to increase my future income far more than a small annual salary adjustment.
That’s not to say compensation doesn’t matter. It absolutely does. Employees deserve to be paid fairly, and it’s reasonable to expect raises that keep pace with the cost of living. But it’s also important to recognize that my ability to build wealth exists because I have meaningful employment in the first place.
In my case, I genuinely enjoy my work. Transitioning from full-time clinical practice to academia came with a significant pay cut, but it also gave me flexibility, purpose, and a career I look forward to each day. Along the way, I benefit from employer retirement contributions, health insurance, an HSA, and a steady paycheck that allows me to continue investing. Those benefits compound just as surely as my portfolio does.
The more I’ve learned about financial independence, the less I view work as something to escape. Instead, I see it as a powerful tool for building the life I want. Financial independence isn’t only about reaching a number—it’s about creating options. When you enjoy your work, have flexibility, and continue growing your investments, every additional year of employment can significantly strengthen your financial future.
So if my COLA ends up trailing inflation this year, I’ll probably be a little disappointed. But I won’t lose sight of the bigger picture. The largest raises in my future likely won’t come from my employer—they’ll come from the assets I continue to build over decades.
Whether you call it FIRE, financial independence, or simply good financial planning, I think the goal is the same: build a life you don’t constantly need a vacation from. Work hard. Save consistently. Invest patiently. And make room for the things that matter most—family, health, faith, friendships, and serving your community.
A paycheck can improve your standard of living today. Building wealth can improve it for the rest of your life.
