The article doesn’t mention “luxury”. It mentions being able to afford the average retirement expense of $63,609 for 20 years. They seem to be assuming the retirement balance is stored as cash earning 0%, with 2.5% inflation (and hope you don’t live past 85 or have unexpected expenses in final years). However, as you note 4% rule of thumb comes to approximately the same total $63,609 * 25 = $1.6M.