hey everybody welcome back to laptop seniors today we're talking about early retirement and I'm going to go through the math of how you get there that you can retire early especially if you're watching this in you're younger if you're in your 20s or 30s if you're closer to retirement with the way most people are usually you start thinking about it seriously when you're maybe 10 years out and you got some saved I'm going to go through the math for you to to actually retire and have a pretty decent retirement but you don't realize it and you don't realize it because so many Financial analysts and financial people and you see it on websites all the time and they oh put your age in here put what you make cling there's your answer you need a million five you need a million four you need a million one to retire comfortably I can tell you flat out yes that is correct to a degree but to a different degree it's 100% wrong you don't need that much money that's an insurmountable number for most people probably have what you need right now but the thinking has got to dramatically change okay and we're going to go through that in order to run you through the thinking I got to give you a couple stories that happened with me I retired at the age of 62 I could have called it a day at 55 56 somewhere in that range um because of the things that happened to me earlier which I'm going to go through with you and plus a really close friend of mine had died and all he wanted to do was retire at the age of 65 sell his business which was a great business worked like a dog his entire life all he wanted to do was retire and have a good life and somewhere around 64 he got lung cancer and died never got to retire never got to do the fruits of his labor and I thought you know what I am not going to have that be me so how did I get there well first off let me start I left home at the age of 19 this is 1969 when I left okay I had 200 bucks in my pocket I owed $1,500 on my car and I had a full-time job in in a different city and that's where I went and the full-time job that I had was I was making $150 a week the only reason I'm pointing that out is you know I didn't come from a whole bunch of money so how did I get to pull that off like what what caused that just prior to me taking this full-time job and moving away I'm going to college and I had a part-time job and at this part-time job I met this guy because I'm working like weekends you know while I'm going to school and I get done at 6 o'clock in the morning this other guy would come in at 5:00 in the morning he'd get ready for his shift one of the things with this particular guy was and what he makes is important and where I'm going to go with this he was an alcoholic this is reality all of a sudden it's not like school in the morning at 5:00 in the morning he would open up a bottle of beer pour it into a glass he would put a you know whiskey into a shot glass drop it down boiler maker woo wolf that thing down sometimes he would do two because his hands would shake like this you know and he didn't have Parkinson's his hands would shake and then after having the drink they would stop so that's the guy okay again making somewhere between $6,500 and $7,500 a year here's the thing for the late 40s and all of the 50s and maybe even a tiny bit of the 60s he was doing $100,000 a year every year year after year after year after year that's a million one in today's terms so this guy's doing a million one for 13 14 years I meet the guy he's at this little tiny little junk company in a Backwater Town making 6500 bucks a year and he's got the shakes one day I get done he comes in I'm in the back and all of a sudden you know I hear an ambulance and stuff he had a stroke and never saw the guy again they took him out and that was it so that's number one number two right at the same time as that I'm going to school and I go to a Personnel Administration class and the teacher stands up in front and he's got a tape deck in front of him and he goes I'm going to play this tape for you if you want to leave leave I totally get it you don't have to wait around when it's done somebody please turn the tape off and um and I'll see you you know the next class next week and I was like wow this is really weird but prior to that he he said something that you know stuck with me for all this time as a matter of fact the teacher's name was Neil Whitehurst he's the only teacher that I know at all that I can remember their name that's how much this guy's that one class one day stuck out to me okay because it's coming on the heels of me seeing this alcoholic guy you know get dragged away you know uh in an ambulance and never seeing him again and knowing his story he plays the tape and the tape basically is Earl Nightingale who is a guy that you know did tapes and you know he's kind of like Anthony Robbins kind of thing okay basically he's laying out a ton of facts and and Social Security information and and wealth information it's in it's an hours or 45 minutes whatever worth of nonstop information of Why without Social Security most people will never ever be able to retire and they might not even be able to exist you know and this is making an monstrous impression on me because I had just seen this other guy all of a sudden when it come up on retirement and not have it enough to retire on this just becomes instantly the prime directive like in Star Tre I'm seeing this firsthand of what you know that tape was talking about a few years after that in my third full-time job in the third different city that I had to move to a bunch of guys and now we're like I don't know 22 23 somewhere in that range I don't know a bunch of bunch of guys are at over at one guy's apartment somehow we got talking about retirement and then what would be a good retirement to you know to have you know and at the time because you know salaries were so much lower then and we were all like wow if we could have a retirement where we earn $40,000 a year that would be amazing so that turned into and this is where the math starts to kick in but I'm going to go through math with this again here a little bit more than this but 40 Grand you know how are we going to get that when you're retired and that turned into well let's do some math here the interest rates right now are 10% you can get 10% pretty much in any bank because that's what they were paying at the time so 10% of what gives you 40 Grand $400,000 right 10% of 400 Grand is 40 Grand okay and that's what we're shooting for now again everything was lower then but I'm going to show you something that's going to be surprising to you and you probably be like whoa I had no idea from that point on at the age of 22 or 23 whatever I was at the time it was some one of those years earning $400,000 and putting it away growing a $400,000 nest egg in cash that was the target for my entire life now the fascinating thing about that if you're shooting for $400,000 is that you will probably amass that but you don't know it most people probably have it and I'll go through that when I do the math section which is right here let me give you one more thing now this is way more down the road decades from that revelation of let's take a shot and try to earn $400,000 okay it's 2003 2004 somewhere in there and I'm making I'm making good money um you know I'm managing 3 400 people and um you know and everything's great and I decide I want to go to Mexico never been there We've Been to Spain and all over Europe and and I like the Spanish language and all that sort of stuff so I thought okay let me go to Mexico I see if I can get a handle on learning Spanish because I kept trying to do it with books and onair courses and anyway so I I go to Mexico and this is where an enormous eyeopener occurred to me part of going to a school I was in quaka and I'm living with a couple an old Mexican couple and they had kind of an okay house um the the room that they put me in there was a bunch of other students there each had their own room I mean it was just brick the the walls were brick the ceiling was brick it was you know this one lone light bulb you know that you if there was a breeze you'd see it go like this I'm in the room and it's a pretty decent sized room and there's a bed and there's a you know chair and a and a desk and that's when I'm there and the couple who were a really nice old couple it's funny I'm actually older now than that couple was but to me they were really really old at the time they were like in their 60s it was Roberto and poita and she was an amazing cook and what was part of the deal was for $18 a day okay this is really important to you and this is probably thinking like what am I talking about this for this is weird no it's really important to you especially if you're working right now and you got any apprehension about anything let me make this really really clear for you and I'll go slow I was paying $18 a day to live in this room and it was nothing right at home about but still it's a room it's you know it's heated and all that sort of stuff and I had room and board she cooked breakfast and she cooked dinner now that in our terms right now today that's about $31 a day so here's where I'm going with why I'm telling you that that's about $111,000 a year or about $960 a month if you're on Social Security you're probably making more than $950 a month and for $950 a month in that situation you have room and you have food the rest of the stuff you're on your own but that's a pretty low amount it was an eyeopener for me because not that I was necessarily going to do that but I didn't rule it out you know it's a backup plan if you will this is a backup plan that if I really because I was single at the time if I really needed it I could go do this I I'd be fine with it the other part of it was that this is sort of a side note to this if you're retiring um you know and but you're still working right now I had a super high pressure job you know I work for someone who you billionaire Who U definitely was a Taskmaster I loved working for the guy and all that sort of stuff but it's like you were working and so there was intense pressure all of a sudden knowing that I had more than enough savings to live the rest of my life with this older couple provided they didn't die and I'd have to fight another older couple I could live with them the rest of my life and have have a great life that's as bad as life would be and it was like okay that's pretty darn decent so after those stories and an idea of how I got to be able to retire early at 62 I want to get to the math now because you're probably sitting on more assets and more money and and able to retire better than you think you can or actually retire early and how you view it okay let's start here if you're going to retire early you have to figure out how early are you going to do that and I just started out at age 62 and I took it up to age 70 because those are the numbers that typically pop up 62 66 70 and this is mainly for us Social Security but if you're a Canadian CPP and probably other countries too it's going to work out the same because they're Actuarial figures and you know every country's going to try to spend as least as possible so let me show you what this is so see where it says SS Max per month and SS Max yearly okay that's the monthly rate that you're going to get you know and what it adds up to over 12 months if you are getting the max of us Social Security again this is us stuff now I know most people don't get the max um but where I'm going with this is you'll see at the end it's going to hold true regardless of what you're getting so even if that 2710 at age 62 was 1,500 at the end it's still going to come out the same so let me explain this because this is a big question that you have to answer for yourself and a lot of it has to do with how long do you think you're going to live I know that's kind of grim but this is part of it so let me show you what I did at age 62 you get 271 a month that comes out to $332,500 a year now that next number is the difference the payout the difference to age 70 okay so if you look at the figure for this age 70 you'll see it's $558,000 5847 6 see the difference so the difference between 32520 and 58476 is 25 Grand 25956 that's the difference if you start retirement at age 66 the difference between what you get for that year is $122,000 a year let's keep moving more to the right so the total payout gain to 70 years old knowledge if you started taking it at age 62 when you come up to age 70 the government would have given you $260,000 and another 160 bucks if you take it at age 66 the government is going to pay you $183,000 456 bucks between 6866 and age7 okay so that's what you're going to make now let's move to the next column farther over to the right how long to get even two numbers there 10 and 142 now what that means is is how many years to get even for what you've already made versus if you went at age 70 how much you know larger the amount that you're going to be getting in other words if you retire at age s you're going to be get a large amount if you retire at age 62 you get a smaller amount but the difference in between for those eight years between 62 and 70 you're picking up $260,000 that if you retire at age 7 you're going to leave behind you're not going to get that it's going to take you a while to catch up to that okay what you would have gotten upfront that time that it takes is 10 years so to cut to the chase if you retire at age 62 versus age 70 getting the max here of Social Security but any number whatever you would get is going to work out the same as far as the years to get even you need if you're retired age 62 you need to live to the age of 80 to get even in or to put it in a different way only after the age of 80 do you start dropping behind if you if you die at age 75 or 76 or 77 or 79 you're going to come out ahead than if you retired at age 70 it's just that simple it's the same thing for age 66 if you retire then and start getting Social Security at 66 versus 70 the payout the gain is only $183,000 but there's less of a difference between what you get at 66 and what you get at 70 so how long to get even it takes you 142 years amazing way if you 14 and a half on to 66 is 80 and a half it still comes out to 80 so here's the question you you have to assess your own health and your family history and a whole bunch of other things and how you think things are going to go question of retiring early and when to take Social Security really starts out with how long do you think you're going to live are you going to make 80 are you going to make 85 are you going to make 90 how far beyond 80 are you going to get one other thing to think about here and it's pretty important really there's a lot of talk in government that us Social Security is going broke and you get varying years that come up it's like 2035 2032 2037 somewhere in that range now are they going to kill Social Security no that would be political suicide there's no politician in the world that's going to possibly you know cut that out it ends Social Security payments you know the country would go insane because so many people have paid into it however they may actually cut it so there's one other thing that adds into this for retiring early let's say you're age 62 right now and you want to think about taking retirement right this moment okay if they start changing Social Security at 2032 okay that's 8 years from now so for eight years you're going to be pulling that money versus waiting 8 years to your age 70 because when you get to age 70 all of a sudden that Max and again it'll work for all numbers doesn't have to be the max I'm just choosing the max because these are hard numbers off of the Social Security Site that $ 58,4 se6 at retiring at age 708 years from now may not be that at all and I get inflation it would go up and all that stuff but that number might be $40,000 but meanwhile you've been pulling 325 for all those years now I'm not making a case for hey you should absolutely retire at the age of 62 or age 66 I'm just pointing out numbers that a lot of people don't figure on and there's really two things here how long do you believe you're going to live because 80 is the magic number if you can make 80 and you believe it going early isn't all that bad if you think you're going to go to 90 then you might want to not go early and the other thing is how long is social security going to be paying exactly the way it's paying now how long before they start cutting things because you just know the social security system is broke and at some point they're going to have to do something every year the Canada employment insurance commission which is one of the government agencies puts together a list of annual household income for typical families in countries around the world here's 72 countries from around the world that you can see what the household income is for a typical family now this isn't a rich family this isn't a poor family this is some family that's kind of average in the middle and a lot of these numbers are not from like right now 2024 they're like 2021 2022 2023 or over the last three years somewhere in that range and they're not exactly super accurate but then they're not that far off either so let me go here if you look at the median income median income for a household this is basically the middle okay it's not an average because an average if somebody made it makes $10 million and somebody else makes 30 grand if you average those two together the number is going to be way higher a median income is closer to real life this is what roughly if kind of a family you know a person is going to be doing and again two person family you double it up or right so if you just look at the map all these countries are making way way less than these two countries and this country and this country okay you can see that if you are living in one of these two you know or this one or this one or these and certainly Australia the odds of you making a way higher income and hopefully a higher Social Security you know retirement income pension type thing and having savings and all of that your odds are so much higher that if you just decide to bail out of one of these countries and go to any of these other ones that are not this dark dark blue you're going to be in way better shape so let me push this back up again median income let's just look at the numbers Luxembourg 28,000 again double this up okay just double the numbers up so let's just start going down a little bit F farther where it really starts to get interesting so if you're let's just out just pull us out in time well here let's start with Spain Spain so Spain is a big thing for people to retire to right okay so you double this up for an average middle class family doing okay let's just call this 15 grand instead of 14695 let's call it 15 grand 2 * 15 30 grand that's the number you're shooting for to have a middle class income living in Spain 30 grand Estonia 26 go down a little bit farther here Israel interesting I mean not given what's going on there I don't know if I'd want to be there right this moment but you know $25,000 does it Poland 22 ltia 20 Greece how many people would like to retire to Greece probably a lot 18 18,000 Malaysia so many people retire in Malaysia great country good climate all that sort of stuff and this is why let's call this 9,000 so it's 18 Grand Uruguay 14 Grand this is 2021 right now this is higher but still it's probably closer to $177,000 again not that big of a deal Panama average person 7 7714 again it's 2021 I'm sure this is now 16 17 18 somewhere in there if that was what you're shooting for that really is a low number for income coming in to be middle class even if you triple these numbers or quadruple these numbers they're still low numbers that's all I'm trying to point out here okay just before we get into the calculations I wanted to narrow that list down of the 72 countries into just countries that people would be considering for retirement I mean certainly there's more countries that people would retire to not everything is on their 72 list ones were missing and some of them were obvious some of them weren't but I'm just going to pull out the ones that make sense to do for what we're doing right here and that's going through how you retire early okay let's start crunching numbers and I'm going to try to go slow here because looking at numbers is always you know you're I start to glaze over I'll try to make it as easy as possible starting from the left you see 100,200 300,000 then you go to the next column 4.6% and then the next column 4600 9200 138 those what that is is if you had $100,000 and you had a 10year bond and it was paying 4.6% which is easy to get right now like no problem at all good corporate bonds or even government bonds will pay you that for 10 years and that's what you're going to get per year so at 100 Grand at 4.6% easy math it's you're going to get 4600 a year if you had 200 Grand you get $9,200 if you have $300,000 you get 138 you know and so forth up and down the line there okay so that's what those three things are the next column over the fourth column you see that 21,24 and 36 Cents that's what all Social Security recipients in the US get that's everybody however see where it says average retiree 8% higher an average retiree as opposed to all recipients because some of the recipients of Med of of getting Social Security you know they're on medical disability or some other thing they're not a retiree an average retiree gets $1,995 a month $1,995 * 12 is 22863 so you get $228 63 from Social Security as an average retiree assuming you had $100,000 that you could put into a 10-year bond at 4.6% you're going to add on another $4,600 so 228 adding on another 46 you end up with $ 27464 that's what you would make with 100 Grand in savings that you're going to be getting interest on on a 10-year bond so you can count on it for 10 years and an average retiree Social Security payment per year 27,467 hold that number in your head let's jump down one more Rong exact same thing is happening but you're getting more interest if you have $200,000 now at the end of the year you're making $ 32,000 if you have $300,000 you're making 36 almost $37,000 and I'm talking about you have nothing else all you have is that money the 300 Grand and you have your Social Security coming in you have no other savings let's go down One More Level just to make it interesting we'll go to $400,000 at 4.6% plus the Social Security payment and you're now pulling in $41,250 so if you happen to have 400 Grand you're going to be pulling $41,000 let me just drop down a rung and just say you only have 300 Grand and I'll show you why you probably have that you have $300,000 that you can put into a bond and it comes out to 36,6 64 here's some countries that I took from the other two websites that I showed you and just put them here I pulled out the ones where people retire and this is the household income come per year that you would need to live as a middle class person in that country so let's compare the 36,6 164 Grand if you had $300,000 to throw into a bond along with Social Security all of these countries all of a sudden become yours Italy Panama Spain Uruguay Thailand Portugal Mexico Serbia Serbia actually has a lot of people retiring there um and also Bosnia Vietnam balet and Indonesia turkey all of a sudden all of these countries become on your radar and it's doable not just skimping by you are a dead in the-middle or better middle class citizen in these countries actually everything but Italy works on here if you just have $200,000 and you're pulling 32 Grand in from Social Security and for the interest on the bond okay so you go like well wait a minute man I I I don't I don't have $200,000 or I don't have $300,000 well maybe you don't but I'm guessing the odds are pretty high that you actually have it you just don't think of it so let's move over one last thing where I'm going to show you some housing prices so where do you get that extra money for that 10-year bond pulling 4.6% or 5.2% I was just looking at us treasuries you know yesterday as I was about to cut this thing and record and you know there's 10year bonds so actually you can go out farther and they're they're pulling five let's start here if you have a home this is an average sale price by state now I'm assuming that you're old you're going to be 66 years old you've been working all your life if you were in Hawaii you probably bought your home back when you were 30 years old you've owned it third 30 years it's paid for or mostly paid for and you're going to get rid of it and they're going to hand you tax-free a million dollars a million $3 38,000 that's what it's worth California this is a typical home price 800 Grand actually these are probably low for California but let's just go with these 800 Washington State 640 Massachusetts 600 you'll get the idea I'm going to go through this quickly anyway let's just go down the list as the prices start dropping go down one more time this is the the Bottom Rung 13 7,286 for West Virginia I've actually looked I was curious for West Virginia was looking on real estate there's a lot of homes that are not $137,000 again this is an average a lot of the homes would be mobile homes where you know they're selling for like maybe 50 or 55 or 54 here and then other homes are somewhere in the 200 something range so I think when you get into this low rung these 130 160s 177 180 you know and up in here I think you could probably pretty easily add 100 Grand to almost all of these numbers so again let's just assume you're going to be pulling $300,000 out of that $300,000 on a 10-year bond paying 4.6% is going to be somewhere around 13 to 14,000 you add that onto your Social Security which is going to be somewhere around 23 Grand put those two numbers together and you're probably going to come out somewhere around 36 $37,000 a year and that's assuming you have no other saving hold what I've been doing in your head and then marry that against the countries that we were looking at ultimately that's why you can retire early and go to these countries and have a decent life or a fantastic life or you if you've really done well or a spectacular life and you go like how's that work out the key to retiring early though for most people and knowing that you're going to do okay is you have to leave North America if you're living in Canada or the US you pretty much have to leave it's funny that it's been 54 55 years somewhere in that range from when a bunch of us were in that guy's apartment noted sometimes that how that number can actually still work the dramatic differen is is where it will work it's just that you have to find the right place the right country the right town the right City the right everything that makes that 40 Grand work because the 40 Grand as I've gone through with you that's more still than a monstrous amount of the population of the world average people not you know not people who are super poor average people make and exist on and have a fine life there's so many countries where that occurs you just have to get out of the the thought process of well I want to do this in North America because that may you know hopefully it's not for you if you're watching but that may be a big problem right now that may be a big problem for you eight or nine years from now if inflation doesn't subside which a lot of economists think we're in for this for a good five six years that it's not coming down you know despite everything that you hear on TV anyway you know this thing is kind of gone on for a while already and I hope it it's helped if it has helped you know hit the like button that's always good hit that notification Bell for when the new videos come out and as always if you have not already please subscribe it really helps the channel it helps it grow I noticed that when we did that video on the comparison between Uruguay and Argentina and Panama because you can see where people are coming from what countries and all that sort of stuff I noticed that for some reason probably because it had Argentina on it Argentina is a hot property right now for retirement you man I see see it everywhere that people are talking about going to retire in Argentina um because of the new guy and also because everything is so cheap they don't care about the inflation they they'll deal with it with American money just like I've explained to you but anyway I noticed on YouTube when you get to look at the analytics that YouTube itself took that video and it start ramping it up they really pushed that video like they're basically broadcasting it out to other people who might be interested thank you very much for watching we really appreciate it see you [Music] oh
