How Can Anyone Retire With Such Nonsensical Advice As This: How Much Money Do You Need To Retire?

I came across this blog, (click here) written by a certified retirement dreamer, that in order to retire, you need this:

Decide How You Want to Live in Retirement

The next step is to decide if you want to live on less in retirement, as traditional retirement planning suggests. For simplicity, let’s say you live on $10,000 a month now. Without work related expenses, you’re happy to plan on income of $9,000 a month.

Living on less doesn’t sound too good to me. But shifting your thinking to priorities, conscious decisions, and having funds for life without fear can feel pretty great.

Really lady? You can’t imagine living on $9,000 a month, when you’ve been accustomed to $10,000 a month? Who are your clients? Are they listed in the Forbes Top 500? Because I don’t know if you heard, but most Americans can’t even afford to come up with $400 cash in an emergency. That’s 4 in 10 working Americans (click here) who don’t have cash let alone have enough funds to hold them in any form of retirement!

Which brings us to the author’s Rule Of 25:

Rule of 25 Retirement

When estimating how much money you need to retire, you can stop right here if you want and take a shortcut with the Rule of 25.

This rule simply takes your annual expenses and multiplies them by 25 to get the amount of money you need to retire. (I cannot find the name of the actual creator of the 25x retirement rule to give credit.)

With the Rule of 25, if you spend $100,000 a year, you’ll need $2.5 million to retire, for example.

So everybody, you need $2.5 million dollars socked away if you want to continue living on $100,000 a year in your retirement. I wouldn’t even know what to do with $100,000 a year in my retirement. WTF are you doing people? How do you spend $10,000 a month? How many vacations can you go on? How many Mercedes can you drive? How big is your home? Shouldn’t your mortgage be paid off by now? What the heck are you doing? I’ll never know. I only know one person who lives on $100,000 and that’s my sister. And she’s ALWAYS broke!

Stock Photo Source: Kiplinger

I need between $25,000 to $30,000 a year to live my comfortable, affordable, happy life. Once we are fully retired in less than 3 years: Social Security for two, One pension and interest earned off our investments will net us a comfortable $42,500 annually. In other words, hubby and I will be doing better in retirement than when we were working. We ain’t no millionaires. All together, our total assets only come to around $650,000 (most of this is our home) if we were to liquidate. But we have no intention of doing that ever.

My retirement advice has always been the same: buy a home, preferably no later than age 35, get it paid off before you turn 65. Never take out the equity. Let the home do your retirement savings for you. Buy a home you will stay in for like forever, do most of the upkeep, maintenance and repairs yourself, all the while knowing you are building equity to fund your retirement years. Try to have at least $260,000 saved to cover your Medicare co-pays over the next 20 years after turning 65. Make sure you work the 35 needed semesters to qualify for Social Security and Medicare. Those programs are NEVER going away.

Don’t let the experts scare you. Your retirement is possible and doable. You don’t need millions to make yourself happy. You need a roof over your head, food on the table, medical coverage, money saved for emergencies, good friends and a family who loves you. And God. Never ever forget about the blessings our good Lord bestows upon us. He’ll make sure we get through our retirement years safe and sound!




  1. Another excellent post. Concerning the $260,000 for Medicare co-pays, is that with or without a Medigap policy? Thank you.


    • Hi Lisa. I think it is for ‘without’. BUT you bring up a very good point. You still have to pay a certain amount for your Medigap coverage. For me, I have to pay $135.50 every month for Part B (Part A is free for everyone). My Plan D drug coverage costs me $35.70 a month and my Medigap is $65 a month = $236.20 a month, which is $2834.40. I still have to pay 10% of whatever medical care I receive (in addition to the annual $195 deductible through Medicare). So, as you can see, medicare really isn’t free BUT it is a helluva lot cheaper than any private insurance. My 10% over the year runs about $900 and my drugs run me around $12 a month which is $144 annually. All total, I am paying $4074. Let’s say hubby will be like me, so that $8148 for the both of us X 25 years of retirement=$203,700. Hubby, however, will not be like me because he has a heart condition and we won’t be able to afford paying his 10%. So, he’ll get a better Medigap plan that pays 100% of the 20% Medicare makes us pay. That policy will cost way more than my $65 a month policy. Perhaps $150 to $217 a month! You can see how this adds up. But still, way better than paying the 10% to 20% for open heart surgery yourself!
      I really feel people should at least try to save as close to the $260,000 as possible. If worse comes to worse, you can sell your home at retirement, downsize and have the ready cash available to cover your Medicare expenses.
      Hope that helps.


      • Thanks Lisa. In retrospect, I think the $260,000 is ‘WITH’ the Medigap insurance. Otherwise medicare would be priced out of existence. Either way, the $260,000 figure is a barometer. People should at least try to aim as close to the figure as possible. Thanks again for your comments.


  2. I’m hoping to save enough to be able to take 10,000 a mos in retirement. Will I spend all of that? Probably for medical and long term care insurance alone. Medical expenses can blow any budget. We are on track to be able to have that. We are blessed, fortunate and grateful. but we did this all by ourselves. My parents were very lucky to have an awesome pension, social security and medical expenses paid by my father’s previous employer. (this is how it used to be done). We, on the other hand, had to put money away in investments to equal what my parents have. We were lucky that life didn’t throw us a bad hand.
    We don’t spend $10,000 a month now, and don’t foresee spending it in the future. But we want to be sure we have enough for medical expenses. I guess we shall see if we make it.


    • Sharon, your parents were very lucky, to have an employer do that for them. Nope, things aren’t like that for many others nowadays. I have no idea what $10K a month must be like but kudos to you and your husband. May you two never need long term care and may you always have the best of health.
      Thank you, as always, for your comments. 🙂

      Liked by 1 person

      • Hi Mr. Millionaire. I haven’t spoken with you in a long time. What do you find hilarious?? What do you find intoxicating? Know what I find amusing and comical? That you’ve been steadily working your ass off, diligently socking money away, investing in the stock market, and your net worth is only $619,000. What’s so funny is that I never worked one iota as hard as you and my net worth is $650,000. I made my money the easy way: invested in real estate, that I lived in. I sold my Hampton home in 2001 and was able to retire fully at the age of 50. Now, again I’m on my way to being another millionaire simply from real estate. And you? You’re still working, and struggling and saving and waiting to be a millionaire. Yawn.
        I find you to be boring.
        Now, THAT hilarity is intoxicating.


  3. Hi Cindi, There are two sources for the Rule of 25 that are usually quoted a CFP William P Bengen and the Trinity Study. I read the entire blog you are basing your article on and she was just giving a hypothetical 10, 000 current monthly income down to $9000 eliminating work expenses. The typical work expense deduction is 15% that financial advisors use, but usually is even more like 25% if you are contributing to 401k, 403b, or IRAS.
    Camille makes an important point of multiplying your expenses by 25 not your gross income as a starting point and then subtracting your known income streams of Social Security, pension, etc. and the difference is the income retirement gap that needs to be filled by savings, side hustle, investment, rental properties, etc. or you can use frugal methods to curb the need.
    FYI: My entire college educated family members who are still working all are making more then $150,000 including retirees as a family and those not retired are socking away money for retirement. Incomes have definitely changed dramatically since I left the work force., my old researcher job entry pay is paying twice my ending salary. As an early FIRE at 45 and now 21 years of retirement, I would add when you retire plan on using less then a 4% withdraw in the beginning from savings more like 2-3%.
    I actually do it little different. I wanted to try to increase my net worth at least through age 70 when RMD start and my taxation would be higher. The stock market volatility and Great Recession were a challenge to this goal but I managed to add a little in bad years. I am like you with a paid off home and car and no credit card debt and having done my traveling when I was younger the $10,000 a month isn’t necessary to have a good life but could be a reality if you need long term care in the Northeastern United States. Lara


    • Lara, yes indeed salaries have changed dramatically, at least since the days when I had a full time job. Both my daughters make in excess of $100,000 a year. Good for them. But I am not my daughters and I’m of the retiring age now. Not them. Also, both my brother and sister live on much more than $100K a year in their respective retirements and again, unfortunately, not me. I’ve always struggled, as have mostly every one else. We’re the forgotten retirees. No one really writes anything for people who earned around $50K to $75K a year. We have no idea what living on $10,000 a month would entail.
      BTW, I have two college degrees.
      I based my retirement on ‘the sure thing’. For me, that was Social Security and Medicare. We had no idea Nick would get a pension from Disney. That was a BIG surprise. Also, with all the turmoil in my and Nick’s life (occasional long term unemployment as one example) we couldn’t depend on Nick’s 401K nor my retirement fund from my long term employer (which I had to sue to get this money)
      On paper, everything looks so lovely and brilliant. In real life, not so much. Things happen. I write about ‘what ifs’ and ‘what to do when the shi** hits the fan’. It’s very difficult to get advice or read any articles for that matter, when people are down and out, through no fault of their own. There are more of us out there than we realize. My message is one of hope: we can retire, we can live well and we can be very happy in doing so. We don’t need a lot of money to retire successfully.
      BTW, my brother and his wife were surgeons. They made millions and both retired at the age of 58. My sister, OTOH is just a thief. She stole most of her money. I’m going to write a post about her in an upcoming week. As soon as I can get over the anger I feel about her. ‘Nuff said.


  4. I net 3,000 dollars a month, after taxes, insurance, retirement, is taken out and my gross is 50 grand a year. I would fall over if I had money like that….lol


    • HI Cindy. I know. I know. We can dream. The secret is if and when we ever do come into money, if we continue to live just like we are today, we can sock a lot of money away in good savings plans. That’s what I hope to do. Lifestyle creep can be a killer. 🙂 Thanks again for your comments.


  5. I know more then a few who have saved and make over $10,000 a month in retirement. I did life differently. That is OK. They have their retirement plans (most of which I did when I was much younger). The key to my happiness in retirement is, “No comparisons, no competition”. I love my life. Still dreaming. Still traveling, Still saving.

    Liked by 1 person

    • Janette, I like the ‘no comparisons’ statement. And I do know some retirees who do the competition thing. I avoid those like the plague! Thanks for sharing.


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