I've always been suspicious of this 'rule of thumb' as well. I think it is based on a number of assumptions about spending, jobs, and lifestyle that do not hold true for us, and probably will hold true for fewer people in the future.
E.g., Assumption is that you have kids, and might be saving/paying at least something toward their college expenses. Of course, kids are a big cash drain you won't have later in life (theoretically). However, you might not have kids (we don't) or you might end up helping your kids out more/longer than you planned, financially speaking.
E.g., Assumption is that you have a job that requires a lot of spending on clothing (nice clothes, regular shopping, dry cleaning, etc) or in some careers (e.g., real estate), nicer newer cars. Not applicable in our case, and thus, no room to reduce spending.
E.g., Assumption is that you will be in one of the following housing situations in retirement: 1) you own a 'forever' home that you have paid off, so you will have no mortgage payment; 2) you will sell the large house you raised your kids in, and downsize to a cheaper smaller place that costs you less, possibly gaining a chunk of cash equity in the process; or 3) if you cannot afford the housing costs you could bear while working, you will relocate to a cheaper location/area of the country. None of these are applicable in our case. We live in one of the cities with the cheapest housing in the country, in a modest starter home. We have no desire to stay here in retirement, and we may even need a LARGER home in early retirement to support needs of aging parents living with us. So we are planning for housing expenses to stay the same or actually INCREASE, at least until very late in retirement.
Assumptions about retirees willy nilly relocating to cheaper parts of the country is also questionable, unless said retirees have friends or family living in said cheaper locations. Most people strive to avoid leaving their social network, if they like where they live.
E.g., Assumption that you will no longer be eating out, doing expensive traveling, etc. That makes very little sense to me. Yes, if travel inclined you will likely travel less and less with age. But initially, you are likely to want to travel MORE. Being retired leaves a ton of previously occupied free time. Even if you travel cheaply, or locally, you might potentially burn a lot of money in the early years, just in gasoline costs alone! Same with all other hobbies. Not all hobbies cost much money, but most cost SOME money. And you will have a lot more free time to do those hobbies.
E.g., Assumption is that medical spending won't suck up all that extra cash. This is very hard to predict. Medicare takes care of a lot if your health holds out that long, but it does not pay for hardly anything related to long term care needs, either in home or in a facility. And about 50% of us will need that type of care for some period of time.
So yeah, we are planning for spending a minimum of the annual $ amount equivalent to our current take-home pay, which is somewhere between 20 and 30K MORE per year than what we currently spend.