I've read about some early retirement extremists (check out Mr. Money Mustache and Jacob at Early Retirement Extreme) who live on relatively low annual budgets (ranging from $7,000 for an individual to $25,000 for a family of 3. The trade-off for going without some luxuries and living a modest lifestyle is retirement well before 65 - in their early 30s.
Mr. Money Mustache rarely eats out or drives a car and Jacob chooses to live in an RV. Those guys seem perfectly content with what they are doing, but I have a hard time seeing myself living like that for the rest of my life just to make retirement by 35 possible. I could certainly do it for a period of time, but not for decades on end!
So part of what I'm trying to figure out is this - should I adjust my expectations for lifestyle and live on less, OR should I need to focus on saving more money to afford the lifestyle I currently think I want when I retire.
If my family only lived on $25,000 a year, it is possible that my husband and I could both retire in the next year or two (the hubbie isn't interested in early retirement right now as he is really enjoying what he is doing for work). But I don't see how that would leave much room for pursuing the travel and hobbies that I currently see as part of my retirement life.
The other option is to work longer and save more. I have the 5 year plan going right now, and I *think* that will leave me with the lifestyle I want, but I won't have a great sense of this until I get closer to retirement. I also need to keep in mind that retirement for me won't mean a full-stop on any income-producing work, just the ability to quit working for an income if I want. Who knows where new hobbies or business-ideas will take me and the income streams they might produce.
I guess the important thing to figure out is, what is my top priority? A type of lifestyle or more free time? What would you choose?