How much do you need to retire early

Most of us would love to retire early, but are worried about the savings we would need to build up to be able to realize our dream of retiring early. There is a simple thumb rule which provides us with insights on how much savings we need to invest in low risk instruments to be able to fund our retirements.

Calculate your annual expenses. Multiply this by 25. Is it lower than your net worth? If yes, congratulations, you are financially independent and historically speaking you can go for a few decades without a job. Now multiply your expenses by 35. Do you still qualify? If yes, then historically, you could go on forever.- Early Retirement Extreme

The thumb rule is assumes that your savings are interested in low risk instruments yielding 3%-4% annualized returns. however, the rule does not account for inflationary environment where the value of rupee keeps on devaluing with time.