You probably need 25 to 30 times your current salary saved to retire??????

[kcowan]

All these rules of thumb are just starting points. There is no substitute for some detailed planning. We did a detailed budget at retirement and tracked actuals for three years. The total was very close but the detail was substantially different. Family situations and health can be bigger variables than planned spending.

Now we do more tax planning and do not track actuals although we have all the data.

 

[jIMOh]

All these rules of thumb are just starting points. There is no substitute for some detailed planning. We did a detailed budget at retirement and tracked actuals for three years. The total was very close but the detail was substantially different. Family situations and health can be bigger variables than planned spending.

Now we do more tax planning and do not track actuals although we have all the data.

YES YES YES.

I like how people snip reply to argue without seeing whole picture.

The 25X is a planning figure.

25X salary?
25X gross salary?
25X gross salary+bonuses
25X yearly spending?

will person be traveling.

25X=.04=4% SWR ... so anyone talking 4% SWR is talking 25X, it's just a matter of what the "principal amount" should be.

I need to plan 20-30 years out. I need a goal, because a goal makes it easier to measure success/failure. I base my goal on my salary/ my wife's salary (GROSS pay, without bonuses) and regular retirement age (67-68).

Realizing that we save 16% of our gross pay, FICA/medicare is about 7% more, and our mortgage is around 40% of our gross pay, I could see myself retiring on "50%" of what I've projected.

But travel expenses and healthcare expenses could be 50% of current gross pay just as easily in retirement. I need a number to plan from, and I think gross pay is the closest place to start.

If you use a different number to plan with, feel free to share.

One aspect I like to suggest with financial planning is it's like "peeling an onion" there are many layers.

The simplest plan is save x% and be debt free.
Then there is an insurance layer.
Then there is a tax layer
then there is a quality of living layer
then there is an estate planning layer
then there is an early retirement layer
then there is a child's education layer
then there is a taking care of elderly parents layer.

And I'm sure many of you have other layers to consider. FIRE means most of the layers, IMO, are accounted for.

 

[NinjaPigeon]

I actually think the estimate is pretty accurate. Considering that social security is a fantasy to Generation X and that medical expenses continue to skyrocket as life expectancies increase and you end up with a need for a large nest egg to retire on.

Besides, would you rather find out you saved too much or too little? If you saved too much you can always blow it by renting a villa in Italy for a decade!

 

[crazy connie]

A lot of americans have always lived in close proximity to where they grew up and that is frequently small town middle America. If they have modest income and modest homes, well a lot of them have the mortgage gone in their mid-50's on what they bought for 35 to 60 thousand when they were starting out. For these folks modest pensions and small savings along with SS allows a decent life.

Remember simple living can have simple costs. Many here are educated and have followed the big bucks career and many have allowed advertising to dictate lifestyle.

We all have decisions to make and I pray that each person makes the best of decisions. I really do not want to have to open my wallet for another government bailout. I prefer to leave my scraps on the table to my kids and some select charities that are my choice.