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#5--a rough estimate on how much you'll need to retire, 20 times current living expenses. Or in your case, about $1.8 million. This conservative figure allows for inflation and longevity in retirement.

But this figure assumes his current living expenses equal his $90,000 annual income and he retires today. His actual expenses are probably significantly less than this, since he's confident he can save "most" of his income away for an early retirement.

What he'll need to retire at 40, using this rule of thumb, is 20 times whatever his expenses will be 18 years from now. To replace his income, assuming his $90,000 income keeps pace with 3% inflation over the next 18 years, would require about $3 million ($150,000*20).
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