The goal is just to get to 25x your annual spending. Once you're there if you earn 7% interest and only spend 4% (what you'd normally spend in a year), you've now not only spend no money (only a piece of the interest) and that extra 3% left over accounts for inflation. So you build a pool for 25 years of spending, then just coast on that for the rest of your life.
The key is to realize that it's not your earnings, but your spending, so it would behoove one to get that spending as small as possible to get to coasting more quickly.
The math works out in one of those "assuming a spherical cow" senses. It doesn't account for a market downtown for any length of time, nor a required change in spending habits (illness, emergency).
The extra 3% interest being earned that you're not spending (remember the goal is spending 4 of the 7% of interest ) SHOULD cover inflation. Hopefully. I'm not the sort to bet on that though.
The key is to realize that it's not your earnings, but your spending, so it would behoove one to get that spending as small as possible to get to coasting more quickly.
The math works out in one of those "assuming a spherical cow" senses. It doesn't account for a market downtown for any length of time, nor a required change in spending habits (illness, emergency).