I mess around with all of my accounts on an excel sheet I made and found out the following:
Starting with $620,000, if I took out $40,000 a year at a 7% growth rate, this would still grow at $500 a year.
Would it be crazy to retire with $620,000 in your retirement account if $40,000 would be easily feasible?
Not saying I would do this, but it makes me think that maybe aiming for $2 million (like so many suggest) would be overkill.
The scary thing that I see with a lot of people is that they do not fully understanding what their expenses are going to be in the future. I think that is the number one thing to do. Once you have that then you can figure out how much you will need to support that lifestyle.
If you are single are you saving enough for a spouse, or are they expected to continue to work while you are retired? Do you have parents/family that may need help in the future? Do you have enough fluff in your budget to take advantage of the amazing changes that technology will be bringing us.
For a lot of people, employer benefits are significant. If you are paying $350 a month for medical, your employer is probably subsidizing in excess of a $1,000 a month for a family plan. As a business owner with a family I pay over $25,000 for medical, dental, and vision. My employees pay $4,000. Many would say that you could get subsidized ACA insurance. How stable do you think this is? I would probably budget at least $15k for a family for medical expenses.
If your employer is providing you with a cell phone, gym membership, Costco membership, credit card mileage points, etc. Make sure that you are truly figuring out what all of these are going to cost when they stop paying for them.
The other significant area is that when you are young and spry, you can do everything. Moving a house can be done on your back. When you are 45 you value your back more. Your health, teeth, eyes, and everything are great when you are under 30. As you age, expect the costs to go up.
I think MMM sometimes paints a glamourous ideal that since we are Mustachian that we can do everything until we die. As someone who is in his 40's, I can see more medical expenses, more hiring out physical work, and more expenses that you would not imagine when you are young. Your brain slows down. My father was the President of a sizable company. My parents are 80 and use an asset advisor. On MMM we would say that is stupid. Based on their cognitive abilities, I think that is a good safeguard of their assets. Losing 1%, so they don't do stupid financial mistakes is genius.
MMM's budget has also exploded with wastefulness according to him. He is getting older, he is like 44. He has not experienced putting kids through college, helping out with a wedding, house, and all of the other things that are going to pop up. Even in elementary through high school there are tons of expenses that pop up.
For professionals you have one shot at banking the money. Once you have been out of the workforce for 15 years, you will not command the premium that you do at the height of your career. Make sure that you have truly figured out what the future holds.
Lastly, the sequence of risk and the amazing success that our country has had over the past 100 years may provide rosier models than what the future holds. Your retirement is going to effect how much you will receive in Social Security payments for the rest of your life. SS is projected to only be able to pay out 75% in the future. Will our government shore up this program or will they let it wither?
Lots of unknowns!! It should be exciting! Make sure you have the ammunition to weather what life throws you.