[cpfohl]

If you're living frugally, your annual expenses will go down. Supposing you continue living frugally after retiring (which is easier, since you have more time to "DIY" expensive things you formerly hired someone for or paid extra not to have to do), you don't need 5 million. Wow no.

Let's assume the common 4% withdrawal rate. $5 million will provide you with $200,000 a year for all eternity. This assumes you never do anything for extra money. It further assumes you never put any money back into the investment (because, you know, you're not saving for retirement anymore).

Going even more conservative with a 3% withdrawal rate you'll be pulling $150,000 a year.

Interest is beautiful, living frugally combined with interest is even more so. Supposing you wanted to pull $30,000 yearly you'd only need $750k.

More on this at mrmoneymustache.com

[porker]

But.. interest rates are currently running below inflation (here in the UK). With that happening, you're going to need to top up the fund to something higher, to ensure withdrawings can increase in line with inflation for the rest of your life.