A little while back Flexo from Consumerism Commentary asked "do you need 80% of your current income in retirement?" While that might be accurate for some people, like most "rules" in personal finance there are exceptions. It is these exceptions that make it difficult for me to endorse.
There are numerous factors that weigh into that 80% number. For one example, there's a lot of military families out there and they'll be getting pensions (yes, I still believe government pensions will be there, we'll just pay taxes to make it work), and very well subsidized health care. This would eliminate one of the biggest costs or retirement as well as bring in income that "doesn't need to be saved" in advance. My fiancÃ©e is in the military so this is definite possibility.
For another, there are the people that are living below their means and saving money now. I know it's rare, but if you are reading this, the odds are higher that you are one of them. If you are are socking away money and living beneath your means now (and you are 35 or younger), you'll have accomplished two very important things:
1) You'll have adjusted your lifestyle to the point that living on 80% of your current income is the norm. Jonathan from My Money Blog is living off of 57% of this his after-tax income.
2) You'll have saved enough money that there's the a chance that you'll actually make more than 80% of your current income in retirement.
In the end, you need to look at what's right for you. Maybe it's a good guideline for you and maybe it's not. I guess that's what a lot of personal finance is about.
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