How We Calculated Our “Enough” Number for Early Retirement

Today I’m (finally) sharing something that I’ve wanted to write about for a long time, but haven’t tackled because there is no easy formula: how to determine what is “enough” to save for early retirement.

“Enough” is perhaps the centrally important concept to early retirement.

Calculating it with some degree of accuracy is critical for everyone, especially when we’re talking about much longer retirements than most traditional retirement advice is based on. All of us eyeing early retirement fall somewhere on a spectrum: those in a hurry to quit as soon as possible, regardless of whether they’ve truly saved a safe amount, and those (like us) who are inclined to oversave and are at risk of working forever if we don’t force ourselves to take the plunge. (There’s no risk-free option, after all. Either risk saving too little or risk spending all your good years at work.) Those in the former camp probably have a natural tendency to underestimate their enough, while those in the latter likely overestimate. It’s good to know your own probable tendency heading in, so that you can correct for it in the calculation.

As with all of our posts, I don’t share our actual numbers (here’s why), but starting with someone else’s numbers is the worst way to think about this anyway, because it artificially anchors your own thinking to a set of circumstances that may not apply to you at all. If you’ve read financial independence blogs for more than a post or two, you’ve probably seen numbers in the range of $1,000,000 in investable assets and $40,000 in annual spending multiple times, which makes those numbers feel like the “right” range, when they may, in fact, be totally wrong for you. (Or totally wrong from a future safe withdrawal rate perspective. Remember recency bias.)

If you already have your “enough” number in mind, then consider this post a method of pressure testing your thinking to ensure you have adequate wiggle room built in. And if you’re just starting your planning, this will help you think about the key factors that determine how much you’ll want to save before you pull the plug.

efore we talk “enough,” I can’t not mention the eclipse, and how incredibly lucky we felt to get a blissful and unobstructed 2 minutes of totality. (Which we may or may not have traveled to see.) 😉 We definitely learned that a total solar eclipse is two events: the partial eclipse leading up, which is cool but not life changing, and the time of totality, the enormity of which we were completely unprepared for. Pictures and video will never be able to capture what totality actually looks (or feels) like, and while we were stoked to get this shot of the corona, in real life the sky did not look black, and the light was so much more shimmery and nuanced than the photos show. Aside from the incredible beauty of totality, we were both totally caught off-guard by how much emotion came with the moment. We now completely understand the “totality or nothing” sentiment that eclipse chasers espouse, and hope all of you who didn’t get to experience totality this time around will find a way to experience it in a future event like the eastern North America eclipse in 2024 (we’re eyeing Durango, Mexico for that one), if not sooner elsewhere. Odds are good after this one that we’ll soon count ourselves among the eclipse chasers of the world — a privilege early retirement will allow us! 

And now back to “enough.”

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