I’m convinced that the financial industry is out to scare people into submission.

How many times have you heard about the upcoming retirement CRISIS? BABY BOOMERS AREN’T SAVING ENOUGH, the scary voice on TV says. They have to get their act together NOW, or else they’re stuck with a terrible retirement of cat food and staying in their son’s spare bedroom. Those types of articles/news stories are everywhere.

Because of that, the apparent desire for everyone to hang up the skates at 50 even though they’ll probably live until 90, and the terrible investing habits of the average human, personal finance writers have started to move away from the commonly cited rule that you only need to save 10% for retirement. Some are even going as far as saying that 20-25% of your income might not even be enough, because I dunno. Fear is apparently good for business.

But is it really realistic? Let’s take a closer look at a few scenarios and see whether the ol’ save 10% for retirement rule still stacks up today.

Scenario #1 — The new grad

Note: I’m going to ignore inflation for all of these calculations, because laziness. 

Let’s say you’re 22, and just finished a tour at one of Canada’s finest keg delivery places universities. You’re starting a new job and want to make sure you’ve got enough for retirement. So you set aside $5,000 per year of your $50,000 salary for 43 years, because apparently your boss is a jerk who never gives raises.

How’d you do at the end of your working life? Let’s have a look, assuming an 8% return.

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Well, that was easy. I don’t even have to crunch the numbers, I’m pretty sure a 30-year retirement can be funded by $1.8 million. At a 4% withdrawal rate, buddy is taking out $72,000 per year. He’ll be okay.

Scenario #2 — Slacker friend

But what about his slacker friend, who doesn’t do a damn thing towards his retirement until he hits 35? We’ll give the slacker friend the same salary and expected return.

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Now we’re running into a few problems. Slacker friend can afford to withdraw about $25,000 annually once he hits 65, which is probably cutting things a little tight. He might have to downsize or make some other decisions that he probably doesn’t want to be considering.

But wait a minute. If slacker friend works for almost 50 years, he’s probably accumulated some pretty serious money into Canada Pension Plan. Say he qualifies for an extra $800 per month because of CPP. Suddenly, his income balloons to almost $35,000, which is probably pretty doable.

Scenario 3 — Midlife guy

Now we’re getting to the guys who haven’t done well. Here’s midlife guy, who is 45 and hasn’t saved a nickel towards retirement. Can he get away with only saving 10%?

The answer, as you might expect, isn’t pretty.

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At a 4% withdrawal rate plus our estimated $800 per month in CPP benefits, midlife guy is only going to be able to generate about $20,000 per year in income. That puts him at a pretty serious risk of running out of money, unless he’s got stuff to sell or is willing to work until he’s 70.

The numbers just get more depressing as the examples age, so we’ll stop there.

The takeaway

Here’s the deal with rules of thumb. They’re not usually great.

There are just too many variables to factor in. Somebody saving 10% of a $100,000 salary is going to do better than someone saving 10% of a $40,000 salary. And somebody who can live on $20,000 per year in retirement doesn’t need as much tucked away as someone who has 14 leech grandkids to support.

Saying that, I’m pretty comfortable saying that damn near everyone would be in pretty good shape if they consistently put aside 10% of their income throughout their working lives. Even those people who skipped a few years would be in decent shape, especially if they consistently put money into CPP.

But if you’re someone who didn’t get started until 45, 10% probably isn’t going to cut it. That means you’ll either have to get more aggressive or start planning to move in with someone during your golden years. Or maybe you’ll work until 70 rather than 65.

So remember, if your favorite personal finance writer starts telling you that saving 10% for retirement isn’t going to cut it in today’s world, don’t just take that at face value. Over saving is definitely a thing, and just about every retirement calculation I see excludes CPP, which I think is a grave mistake. By planning for the worst, you could save hundreds of thousands too much, affecting your life today. What’s the better choice — going on a dream trip now, or growing that $10,000 into your fourth million come retirement age?

We need to remember that not everyone is as hardcore about this stuff as we all. When we make retirement saving seem really hard, people have a habit of not bothering. Which is why it pays to give personalized advice, not fear mongering.

Tell everyone, yo!