When Can You Afford To Retire?
The dream of being able to wake up when you want and where you want is a luxury. Enjoying your free time after reaching retirement appears to be fading even for those earning above-average salaries.
When your monthly passive income exceeds your monthly expenses, you are ready to retire. Finding passive investing solutions that are safe and sustainable are why we exist. Retirement.net is "Where investors come to retire early". You don't need to wait until your 65 to start enjoying life and you certainly don't need to be a millionaire to retire early.
What is financial independence?
Financial independence is having enough passive income that you no longer have to work for money. You become financially independent when your investments grow faster than your monthly expenses. Their are many ways to generate income using your money but most will not even beat inflation.Â
Example:Â Suppose you have $500,000 worth of bitcoin that grows at a rate of 12% annually which equals $60,000 per year in growth. Now assume you sell only the profit.
If your expenses are less than $60,000 annually you are officially financially independent. You are generating more income than you spend annually.
You will not have to worry about running out of money during retirement.
The problem with relying on dividend stocks is that dividend stocks usually fall in value after ex-dividend date. To retire you need to know how much your savings will grow.
Bitcoin was designed to beat inflation and grow faster than any other asset class over the last 14 years. It will continue to grow higher since only 21 million coins will ever exist and no more will ever be created. Around 25% of the Bitcoin supply have already been lost forever due to reasons such as getting lost, being burned, or seed phrases being forgotten, removing these coins from circulation. That means less than 16 million coins remain in circulation. The Bitcoin mining process was designed to get 2x as difficult every 4 years. At the same time more and more merchants are accepting Bitcoin as payment. Bitcoin adoption has even spread to large well known institutions such as Fidelity and PayPal. Many stock brokers will even allow you to buy or sell Bitcoin futures. That is what makes Bitcoin so unique. This is why Bitcoin will continue to increase in value.
What if you need more income...
Everyone has different income needs. Some people want to have a more lavish retirement and therefore will need to save more money. Some people want to retire as soon as possible and are more willing to cut back some expenses. The key to staying financial independent is how much money you spend. "The more you spend, the more you will need to save. The less you spend, the less you will need to save".
How much money do I really need in savings to retire?
If you spend $50,000 annually, you will need to save a minimum of $500,000 to retire. As a general rule, your savings must be at least 10 times your annual spending in order to retire using The Perfect Bitcoin Retirement Plan.
Is that really enough money?
Some people spend less and some people spend more monthly.Â
Below are some options available to maximize your spending power:
* Invest more money into your Bitcoin portfolio
* Relocate to a more affordable city or country
* Supplement your income with Social Security, pensions or inheritance
* Downsize your home and lifestyle
How long does it take to reach financial independence?
An important factor to financial independence is your savings rate. The more you save, the quicker you can reach financial independence. Retirement is a number, not an age. Once you reach a certain number in the bank, working becomes optional. I personally retired at age 31 and you too can retire from anywhere.
How much do you spend monthly?
Either estimate your monthly expenses or use an automated approach like Mint.com or PersonalCapital.com. Both are excellent websites that allow you to link all of your accounts and pull your financial data automatically. The goal is to know how much you spent in the last 12 months. We can then assume that is how much you will spend each year going forward. Both websites cater to different needs. Mint.com is focused on budgeting and PersonalCapital.com is focused on investing. I suggest trying both websites and just use the one you feel most comfortable with.
Create a budget
Once you are tracking your spending, you should be able to easily identify where your money is going. Your objective is that you want to reduce your expenses so that your savings will cover your ongoing monthly expenses.Â
How do you get started?
Before we get started, we're going to assume a simple scenario:Â
1. You can calculate your monthly expenses using our simple templates
2. You have a crypto exchange account or can open a new account
3. You have existing liquid savings
3 Simple steps To start
1. The first step is to calculate your monthly expenses.
2. The second step is to copy The Perfect Bitcoin Retirement Portfolio.
3. The third step is to automate paying all your monthly expenses.
How much should you have saved for retirement?Â
“The amount you should have saved for retirement depends on various factors, including your age, lifestyle, and goals. Here are some general guidelines to consider:
Retirement goals: First, consider what type of retirement lifestyle you want. These factors will impact the amount you need to save. Do you plan to travel extensively, downsize your home, or work part-time?Â
Retirement age: The age at which you plan to retire will also affect how much you need to save. If you plan to retire earlier, you will need to save more to cover your living expenses for a longer period of time.
Social Security: Social Security benefits can provide some income during retirement, but they likely will not be enough to cover all of your expenses. Consider how much you will receive in Social Security benefits and factor that into your retirement savings.
Current savings: Take a look at your current retirement savings and estimate how much you will have by the time you retire. If you are behind on savings, you may need to save more to catch up.
As a general rule, financial advisors often suggest that retirees should aim to replace at least 80% of their pre-retirement income. This means if you currently make $60,000 per year, you should aim to have $48,000 per year in retirement income. To achieve this, you may need to save between 10% and 15% of your income annually starting as early as possible.
It’s important to remember that retirement savings goals are not one-size-fits-all. It’s always a good idea to consult with a financial advisor who can help you determine your retirement savings needs.Â
Who are you?
This page is maintained by Avi Rosner. I was formerly an accountant and real estate investor who was successful in achieving financial independence by age 31. I created this site for investors interested in learning how to retire early using Bitcoin.