Where you say, "However, if you are planning to retire at 40 with additional 20 years extra than the average retirement age you would need around $2.25 million ($50k x 45 years)," you're assuming your investment returns in retirement will exactly equal inflation. That's probably too conservative. On the other hand, assuming you'll spend exactly the same every year (even adjusting for inflation) for 45 years is probably not conservative enough, unless you do move someplace where the cost of living is much lower.