This isn't specific to the book but the general method of basing your FIRE figures on post-tax dollars ... doesn't that distort the calculations?
eg lets say my expenditure is $40,000. The 4% rule-based calculator determines that I can retire when I have 25X that amount.
However my pre-tax income needs to be $50,000 to have $40,000 to spend. This means I need an extra $250,000 in my FIRE principle, which isn't an amount to sneeze at.
Am I missing something?
Note: I live in Australia and we don't have access to our (relatively) tax-free retirement income until we're 65 or older.
I think we've got two separate things here. One is calculating your savings rate, which is a personal decision for people and we can debate our own thoughts on that front, as well as sharing tax information to convert back and forth between the two choices, and the other is FIRE amount. FIRE amount needs to account for the tax loss, but at the rates you will be realizing post-retirement.
On the FIRE amount front, the next part of that is that tax rates are marginal, as well as in the US at least, being much more favorable to owners of capital than to income. 15% long term capital gains rates, as well as the possibility of no capital gains taxes are to be accounted for, and those apply post-FIRE, but some things are not at all usable while earning income. As well as that, another US trick is realizing taxable income by taking a taxable hit converting pre-tax accounts to tax-free but while maintaining yourself in the lowest income tax brackets, that converted principle can then be accessed after a 5 year seasoning period, and the gains after you take that initial low-tax rate hit are then not ever subjected to taxes if you wait till actual retirement age.
