davelj’s scenario looks reasonable, although I am more conservative myself.
For every year you want to be able to live off savings, you will need today to earn a lot more than you spend. Let’s make some assumptions and do simple math here:
Assumptions
1. Assume you’ll think you have enough when your savings would last you through age 92.
2. Assume you first become able to retire when you’re age 62.
Simple math
Under these assumptions, you’ll be earning for (62-42) / (92-42) = 20/50 = 40% of your life. So if you spend 40% of your net after-tax income during those earning years (including expenditures on cars and rent or other housing expenses) and save the other 60%, you should be on track for retirement as early as age 62.
You can adjust the numbers to fit with your own goals for financial independence and security.
What I am doing here is conservative because it assumes your son and others in his generation who are still working when you want to be retired will only want to provide you with $1’s worth of real goods and services to you for each $1’s worth of goods and services you provided to his generation. Most baby boomers assume the generation after them will be much more generous than that, even though there are fewer of them. We shall see.
