RunningBum
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jun 18, 2007
- Messages
- 13,249
I agree with you and I don't at the same time. Expenses determine needed nest-egg I agree.
But what you have (perhaps) not considered is that lifestyle, and it's associated expenses are highly correlated with income.
Therefore the 62% of income Canadian data point is indeed worthy of discussion.
The fact of math dictates that there has to be some number that is retirement expenses divided by working income. It doesn't say that number has to be useful or indicative. One way to see would be the standard deviation of that 62%. The higher it is, the less likely the number is to have any real value. Taken to extreme, if 5 people spend 100% of what their income was, and 5 spend 24%, the average is 62%, but nobody actually spent anywhere close to 62%.
Many people here on e-r.org probably aren't getting into the lifestyle associated with their income. See this current thread http://www.early-retirement.org/forums/f28/hiding-your-wealth-not-a-poll-81873.html for example. Others may, but I don't think it's to be recommended. I'll give you that there is some correlation. If you were a CxO in working life you are likely to be a country club type in retirement, and a middle class worker probably isn't going to be splurging on first class vacations, but the extent of the expenses will vary too widely, for reasons I already mentioned, to be of value for individual planning. This is why, when newbies come here and ask "Can I retire now?", the comeback question is "What is your retirement budget?", and never, that I've seen, "How much are you making now?"
But feel free to discuss. I'll stay out of it.