A more realistic approach is tracking your current monthly spending or budget (if you have one). Your monthly spending reflects the lifestyle you live and will want to continue to have in retirement. Spending does not include money put in savings.

While others may disagree my experience is monthly spending does not change in retirement. While you don’t have kids at home, you end up spending money on adult kids and grand kids. Also how will you handle medical expenses until Medicare kicks in. So factor in inflation to your current monthly spend to your projected retirement date and you will have the required monthly revenue stream.. I have additional pot of money set aside for travel and big purchases.

The 4% rule is fine but remember this it is greatly impacted by the first 2 to 4 years of market trends when you have the most money in your retirement accounts (basically if you retire at the wrong time you will be sweating out the later years of retirement). For my sanity I have a guaranteed revenue stream to meet my monthly budget going forward.

Unfortunately I do not have a plan for long term assisted care for both of us…..if it comes to that…not sure many retirees have actually though that through…..a bit depressing.