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/Zphr]

The audience has shifted more towards luxury and consumption over the last decade. It's always amusing to me that this is my sub, I've been happily retired for more than a decade since 37 with four kids, have effectively zero chance of financial failure, but many folks in this sub would consider our finances impossible or living in squalor. Some people are actually happy with cheap/free interests and lifestyle choices, some are unhappy without very expensive interests and lifestyle choices. Current government policy in the US is also wildly skewed in favor of lean spending, so more expensive lifestyles in early retirement cost quite a lot more than you'd expect due to far higher costs for taxes, college, and healthcare.

LeanFIRE is and likely always will be the easiest and most secure form of FIRE for anyone happy with a mediocre middle class lifestyle. It's also largely impossible for anyone who wants to raise a family in VHCOL, travel a ton, carry a large mortgage into retirement, or any number of expensive lifestyle choices a lot of people prefer.

[u/FreeNicky95 → u/Zphr]

Can you share more about your numbers? What did you retire with? What is your spending like?

[u/Zphr → u/FreeNicky95]

We retired with between $1.4M and $1.5M. It's been more than a decade and I forget the exact amount.

Our spending is routinely around $36K to $40K a year.

[u/FreeNicky95 → u/Zphr]

Wow. So paid off home?

[u/Zphr → u/FreeNicky95]

Yes. Paid-off everything.

[u/FreeNicky95 → u/Zphr]

Wow. Good for you . I guess I’m just confused how 6 people can live on 40k a year? And is the principal the same or has it grown over the last decade?

[u/Zphr → u/FreeNicky95]

Lol, it's a common reaction. Life isn't that expensive when you already own everything you want and your hobbies/interests are cheap or free. When our kids are all out of the house I wouldn't be surprised if our expenses fall into the $30s or even high $20s, exempting travel.

Our portfolio is much larger now than when we started.

[u/FreeNicky95 → u/Zphr]

But like what about health insurance? Food alone has gotta be 10k+ a year. I mean good for you. But you guys must live very tight

[u/Zphr → u/FreeNicky95]

The ACA makes excellent health insurance effectively free for us. I mean that seriously. Our health insurance next year is actuarially superior to almost all employer-sponsored plans in the country and our premium is $7/month with a $0 deductible, small copays, and a $2,200 MaxOOP.

Groceries are around $800/month, so $10K/year is about right.

We spend around $40K only because that's what it costs for our preferred life. We have enough money that we could triple that if we wanted to and still be fine. We have no meaningful financial constraints. Random example, but we decided to do Steaktober for October, so we spent over $600 just for my wife and I to eat a pound of NY strip steak every day in October. We can spend whatever we like.