A comment I made on his blog post as a response to another commenter. I thought it was an interesting consideration so I've included it here. Nords, I thought your last two paragraphs were a nice validation of the notion that, so frequently, following the 25x expenses mantra already has its own ability to "spend up if necessary" built into it. As someone who earns a very high income I keenly feel the opportunity cost of giving up the job for early retirement. I think my future self will say it was worth it though.
"It must be noted that 25x expenses already includes a standard deviation in it because it’s historically based on worst case scenario. The majority of the time, someone calling it quits with 25x expenses is able to spend more over the coming years because the portfolio has grown as a rate that outpaces your expenditures. I think many people have difficulty trusting this, which is is why they plan to save more. This, in effect, isn’t just doubling up on the safety margin. It’s SQUARING it because now the doubled up portfolio will outpace one’s expenses in the majority of scenarios where one withdraws 4% of the initial portfolio value, leading to an even larger runaway portfolio balance over time. Saving beyond 25x then represents one of three things, either a belief that the future will be worse than anything in the past, a lack of understanding that someone spending 4% is most likely inevitably able to spend more, or being so risk intolerant of not being able to flex higher with future expenses that, even though it would occur in only the worst case scenarios, it is too great an opportunity cost to stop working. Perhaps there’s a middle ground where the fear of 4% not being enough, and the math that it is, and the realization that the effect of overshooting is squared, not doubled, might allow someone to trim how far they want to overshoot."
