Pretty sure the savings rates discussed are to help motivate 10% savers to get to 40%, not 45% savers to 95%. I personally find the thought behind MMM to be somewhat motivating. Why does it seem this board is slanted towards the negative? Does it just seem more intelligent to slant towards pessimism or are that large a percentage of well financed individuals generally negative thinkers? Which formulas do you like to utilize that have no possibility of outlier situations that you personally deem unrealistic? So just ignore the mathematics behind savings rate because the chart includes outlier percentages that are not as relevant to most anyone's experience? Gotcha. In other words, it an elegant theoretical exercise but not really reflective of most people's actual situation. Sure, if you assume you are starting from point zero, costs stay the same (ahem, taxes), and there are no other means of spending (be it existing resources or debt). Do that for 2 years, and you've got 38 years' worth of retirement savings, at 0% real return. Ergo each year of savings=19 years of expenses. If you're saving 95% of your income, that means you're living off of 5%. Likewise, even if I only saved 5%, I'm fairly certain I could retire before I die (probably won't make it another 66 years!). Even if my savings rate was 100%, I wouldn't be under two years from FI (I imagine that's true for most). I don't think the chart really works all that well at the outlier numbers. Most have lifestyle goals they need to do to balance out with having to spend time working. But very, very few people have getting to FI as soon as possible as one of their goals. Yes the key to getting to FI is to minimize spending while maximizing income. Not being able to afford medical care is physically painful. Giving up the horse is emotionally painful. There is a lot more flexibility in have high expenses and being able to cut versus having low expenses but they are all essential. Going from 50k of spending to 6k IS catastrophic. Going from 450k to 50k FEELS catastrophic. The time to retirement drops so fast not just because of greater savings rate, but because lower spending rate means less money is required. On the other hand if you can really live on $20k/year while working you can still live on $20k/year while retired. The problem here is that dropping from $450k/year spending to $50k/year spending will feel catastrophic even though $50k/year is still a very nice income as far as many are concerned. What savings rate does someone with 500k earnings need to ensure they will have a nice retirement and remain in the top 10% of households, in absolute terms? 10%? 5%? Sure, their standard of living takes a hit, but they are still better off financially than a 40k earner who saved 50% of their income. People with high incomes can choose to barely save at all and still retire in comfort.
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