Retirees need 50x spending to stop worrying, new book says

Most retirement advice is backward, say two authors whose new book argues that knowing who you are matters more than any savings formula.

Retirees can stop worrying about running out of money only when their portfolio reaches 50 times annual spending, according to a forthcoming book by Edward McQuarrie and William Bernstein that challenges conventional retirement planning.

"If your investment portfolio is 50 times your annual spending, you can stop worrying about whether you'll run out of money," McQuarrie, an emeritus business professor at Santa Clara University, and Bernstein, a neurologist and investment adviser, said in a joint interview.

The average 30-year real return on U.S. stocks since 1793 is about 6.2%, but over the 30 years ended in early 1995 the annualized real return was only 4.3%. Across all 30-year periods, stocks have produced a real return of less than 4% annually about one-eighth of the time, according to McQuarrie's research.

The 50x rule means a retiree spending $40,000 a year would need $2 million in savings — a target that requires saving at least 20% of earnings every working year, the authors said. For those who undershoot, the margin for error shrinks dramatically if markets underperform or retirement lasts longer than expected.

The Personality Question Most Planners Ignore

The authors' central argument is that retirement planning should start with self-knowledge, not spreadsheets. People who hate spending and fear dying broke should underspend without shame, they said. Those who feel deprived by saving and want to enjoy their wealth need everything to go their way — strong market returns, good health and a shorter-than-average lifespan.

"BMWs, fancy clothes and Birkin bags aren't lifestyle choices," Bernstein said. "They're IQ tests."

The book, "Retirement: How to Save Enough, Invest It Well, and Make Your Money Last," is scheduled for publication in March 2026.

The 20% Rule and the Luck Factor

For younger workers, the authors recommend saving at least 20% of earnings every year of their working lives — a level that demands both discipline and favorable market conditions. They also advise against lifestyle inflation when income rises.

"Continuing to live as you did before, even as your means take a jump upward," is the best way to "turbocharge a program of retirement savings," McQuarrie and Bernstein wrote.

For those nearing or in retirement, the key is flexibility. Cutting spending is the ultimate way to retain control, they said, warning against rigid withdrawal rules that lock retirees into fixed spending levels regardless of market conditions.

The Risk of Living It Up

Retirees who want to maximize enjoyment face the highest risk. If they live longer than expected or markets deliver below-average returns, they could exhaust their savings.

The authors cautioned against aiming to "come as close as possible to bouncing the check to the undertaker," warning that such an approach works only if everything goes according to plan.

This article is for informational purposes only and does not constitute investment advice.