Retirement Formula based on the value of your house?

[swabby01]

Cant agree with the methodology

Too many variables. Is the house paid for? Does it have a mortgage?

What are the housing prices in your area? If someone has a $1M paid off home in California (a very modest home in Silicon Valley), they need nowhere near $300K a year to live, or $7.5M in assets to draw from.

Are you planning to retire in place? Are you going to move?

Do you intend a simple "homebody" lifestyle? Are you going to travel more?

Got to throw the "BS" flag on this methodology - I am a subset of the case that ziggy29 hypothesized.

Retired 8 months ago
Live in California
House paid for
Current value $1M
My Assessment: No way we will EVER need $300K/year and $7.5M in the bank even though we pretty much beat those numbers. We are living on about $6K/month which includes many one time expenses like new patio, new spa new Viking BBQ island, 10K solar House painted and new windows. We are putting away more each month then we spend. Only risk is the prevailing "Tax the rich" mentality sweeping the nation because people continue to be sold the bill of goods from our congress that rich don't deserve to keep anything they worked for all of their lives. Rant over - sorry but honestly that IS the only risk to our retirement.

 

[Sunset]

What if you rent ? or don't wear shoes ?

Then you would have to use the car method, take the value of your most expensive car * 1.8 should be your spending.

 

[triangle]

I think many are overlooking the point that this article is written for the masses who are not yet retired. Working class families with a mortgage who are not as financially savvy as most FIRE people and wondering how much will they need to retire in the future.

Sure the advice is too simplistic, but hopefully it helps the casual reader to think more about their long term savings goals. And people nearing retirement age think more about their housing and spending needs. IMO it is better than those old ING commercials asking the nebulous question "what is your number?"