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[quote=Anonymous][quote=Anonymous][quote=Anonymous]An advisor is not going to tell you this either..

A good rule of thumb (assuming you are retiring at 65) is to have 25X your annual spend (the year you will retire) in savings (or 4%).  The assumption is that it will last you at least another 25 years even if your net worth grew just enough to keep up with inflation.

This will automatically take care of the reduced spend associated with a LCOL area. [/quote]

DP: I use a combination of my income benchmarks and 25x my intended spend.  It's very easy to think it will be much cheaper in a LCOLA but it's not always the case. We used to live in a LCOLA and some things were much cheaper, but travel, for instance, cost more because we'd have to fly regional to get to a major airport and work out parking/taxis etc.   In retirement where we intend to travel more this could add up.  Likewise, grocery stores were further away--now I can get 95% of what I need from Costco which is less than it cost to shop in the local grocery store in a LCOLA even though food costs were supposedly cheaper there on average.  We also drove a lot more--which resulted in more gas and more wear and tear on cars.
My parents are in a LCOLA and have found for some medical things they need to go to a further away hospital which involves staying hotels etc. even for outpatient.

It's also hard to anticipate how things like your health care costs, home services and travel/entertainment will go up even if you don't move, whereas it's relatively easy to figure out what you won't have to pay anymore (e.g., mortgage, work expenses).  Using your income as a benchmark can be helpful to just confirm you're not assuming you are going to want to live on so much less.  Note the Fidelity income benchmarks for instance only assume you will spend 45% of your ending income in retirement from your retirement assets and that the remainder will come from SS and not having to save 15% of your income for retirement.  But for high income people, ss won't replace nearly as much.

https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire[/quote]

I'm the PP you responded to.. It is good to measure yourself against multiple standards as you seem to do (I do as well).  Just wanted to start off OP with the most straightforward and most widely accepted metric out there.

I also use a few other income-based models - Fidelity, Millionaire Next Door and another source that I don't recall.  Fidelity says that you should have 1X income by 35, 3X income by 45, 5X income by 55 and 8X income by 67.  I break this down by year - For example, fidelity is 5X at 55 and 8X by 67, that's about 0.25X each year so 56 would be 5.25X, etc.

The other source (that I don't recall) has the same concept but a bit more aggressive - 4.5X at 45, 7.5X by 55 and 12X by 67.

Millionaire Next Door - Average Accumulator of Wealth (Age*Income/10) and Prodigious Accumulator of Wealth (which is 2X AAW). The PAW model is the most aggressive model out there.  If you can keep up with that you should be good.

I also use a more conservative 33X benchmark for my personal expense-based model with a goal of 50X in expenses over the next 5-10 years.

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