The 10X rule to have enough to retire by age 55?

[Aerides]

While I agree the metrics for this article are wonky, at the time we retired, adding DH's and my gross incomes together, x10, was about the size of our investments. Plus the paid off house, no debts, which I don't see mentioned in the piece.

We absolutely saved more than 50% of our gross, especially in the final years. And 10x your salary "today" to someone still saving, isn't the same - hopefully - as 10x their salary the day they retire. Over the course of that timeframe salary should increase, as should the target number, if that's the anchor. Which is why it doesn't make much sense as expenses are the most important number.

So it's poorly written, just another way to try to frame how-to-fire, but not really getting it right.

 

[MarieIG]

https://www.early-retirement.org/fo...-answer-before-asking-can-i-retire-69999.html

Somehow I feel as if I have seen an emphasis on expenses before. Can't quite put my finger on where I saw that . . .

 

[Koolau]

20x-30x earnings for me upon retirement would have been between $20M and $30M. Trouble with this is that it does not factor in the amount of your earnings you spend (or save). In our highest years, we did spend a bit more, but we saved a ton (and yes, our taxes were pretty high too). Our normalized spend is about $150K/year. $30M would have allowed us to spend $1.2M (ish)/year, which is ridiculous.

Heh, heh, it would be FUN to try to spend $1.2M (ish)/year. Starting to sound like "Brewster's Millions."

 

[GravitySucks]

I had around 8x income saved when I retired at 54 9 years ago. Guess it's back to work.

Also,

I can't use another rule of thumb, I only have 2 thumbs.

 

[JJpop]

Never heard of this but it's a rough approximation or starting point for thinking about how much to save for retirement.



https://www.travelandleisure.com/tr...lctg=d60154956f69ab584141e6d0bf753000a604385b

No assumptions about returns or inflation or references to Social Security, other retirement savings like 401k or IRA.

$80k is a decent salary so $40k a year may not be too little to maintain a similar lifestyle.

If someone made say $200k, then $100k is still a healthy budget but maybe when making $200k, it funded a bigger lifestyle.

She gives just a very broad description of FIRE:



Then suggestions of side hustles and passive investment such as rental properties.

In the broadest outlines, retiring at 55 fits in with what this travel magazine site promotes, in a way.

OTOH, they want to promote tourism so even if this "financial wellness educator" touted LBYM principles, that would go against what the site is promoting, because they're trying to get its readership to spend on travel both before and after retirement.

Totally ridiculous concept that I keep seeing in different forms.
Are our salaries indicative of our expenses?
What if I make 500K and you make 80K
So I need 5M and you need 800K even though or expenses are pretty close ?
Your ending salary is meaningless.
It is your expenses and how much money you have saved.
Why do people have to keep coming up with some magical and worthless formula?

 

[Koolau]

Totally ridiculous concept that I keep seeing in different forms.
Are our salaries indicative of our expenses?
What if I make 500K and you make 80K
So I need 5M and you need 800K even though or expenses are pretty close ?
Your ending salary is meaningless.
It is your expenses and how much money you have saved.
Why do people have to keep coming up with some magical and worthless formula?

I guess because it looms large in our legend (or some such.) Most folks like a simple formula to help them plan. I think the 4% rule or 25X last salary seems to be just about as simple - yet accurate as anything I've seen. It comes close to agreeing with FIRECalc most of the time as well. YMMV

 

[DrRoy]

This formula has one spending half of pre-RE income. I spend more.

 

[CRLLS]

Totally ridiculous concept that I keep seeing in different forms.
Are our salaries indicative of our expenses?
What if I make 500K and you make 80K
So I need 5M and you need 800K even though or expenses are pretty close ?
Your ending salary is meaningless.
It is your expenses and how much money you have saved.
Why do people have to keep coming up with some magical and worthless formula?

For many, yes. Lifestyles rise or fall to meet their income. Right or wrong, this is a (very?) rough rule of thumb to have a retirement life similar to the style that you have lived before. IMO, any rule of thumb is better than no rule but not as good as a deep analysis of one's retirement lifestyle goals. I found the 25x very helpful when in the accumulation stage. I used 25x after taxes, FICA, health insurance and savings were deducted. Not a perfect method, for sure It was a simple way of assessing my path of retirement savings. When I got closer, I did a deeper dive.