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"To maintain living standards into old age we need roughly 20 times our annual income in financial wealth. If you earn $100,000 at retirement, you need about $2 million beyond what you will receive from Social Security. "

Just because you are used to spending a certain amount of money while working (you probably pay for transportation and maybe lunch, work clothes etc which all go into chipping away at the $100k not to mention the taxes you pay on being in a certain income bracket and things you buy that you don't need because of how secure you feel that are totally discretionary and you would be happy w/o like a newer digital camera) does not mean that that should be the base number to multiply anything by.

There are also many things you spend money on that you can cut out as well. You don't have to buy as many gifts you don't have to attend as many entertainment things you don't have to dine out as often as you do when the money is flowing freely. If you raised children and by the time you retired they moved out you don't spend money on them like you used to. Or at least, given the proper set of circumstances, hopefully you don't have to.

Added: People's spending, like companies, tends to rise to the level that they have available to spend. Not all of this is fixed spending that you can't get rid of.




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