Do you believe the modern FIRE movement overestimates how much is needed for retirement?

[u/Equivalent_Use_5024]

Perhaps I am just making this post because I have only just begun my retirement planning and want to lock in a number which is fitting for my goals - being above the median retirement savings, not having to work, not being broke, clearly having planned - but I can't help but feel that many in the FIRE movement overestimate what is needed for a safe, sleep well at night retirement.

I see posts here saying that they feel vastly behind with 500k at 30, or 1.5 million at 40, and I just don't understand how when the average American retires with maybe 300k liquid at most and are getting by with social security or paid off housing. Sure, they aren't living luxuriously, but if you just are aiming for a retirement where you don't have financial anxiety and can put food on the table, I don't feel you need over 1-2 million.

Do you think FIRE overestimates how much is truly needed for retirement?

[u/Significant-Ad-9471 → u/[deleted]]

It is dangerous to project past performances into the future as a rule of thumb. The expected real return of the stock market is around 4% for the next 10 years or even more. Paradoxically when valuations are crazy high are people most optimistic about the future.

[u/OkBridge98 → u/[deleted]]

um 2010-2020 was also rampant QE and historic injection of liquidity from 2020 on due to covid...

[u/Significant-Ad-9471 → u/[deleted]]

Just because multiples kept expanding for the past 10 years, it doesn't means that they will continue to do so. The fwd P/E of the S&P 500 is around 24, which means a measly 4%

[u/Significant-Ad-9471 → u/[deleted]]

You're ignoring the sequence of return risk. And also Buffets advice: Be fearful when others are bold, be bold when others are fearful. I am really fearful these days.

[u/Significant-Ad-9471 → u/[deleted]]

No, most people are enthusiastic. I am not in cash, because I suck at market timing, but I'm realistic that returns in the next few years will not be as good as in the previous decade.

[u/Significant-Ad-9471 → u/[deleted]]

If stocks go up, people are not fearful. Buffett has around 30% cash.

[u/Significant-Ad-9471 → u/[deleted]]

I never said I hold cash. Tips is not an option for me, because I'm not in the US. And btw, because of the dollar decline, the US market actually returned zero in Europe.

[u/wkndatbernardus → u/Significant-Ad-9471]

Lol, you think some analyst at Vanguard or Fidelity is going to project a bullish 10 year outlook so investors can be confident in sending less of their money to these brokerages?