Early Retirement Calculator

This calculator helps plan early retirement by combining Bitcoin and traditional investments. Features include interactive portfolio growth graphs, multiple Bitcoin price prediction models, real-time scenario testing, post-retirement income, and detailed projections considering Social Security benefits, 401k contributions, and market parameters. Here's how it works:

1. Investment Growth & Market Parameters

• Investment Return While Working: Typically 6-8% for a balanced portfolio based on historical S&P 500 returns. Example: 7% is a conservative estimate for a diversified portfolio of stocks and bonds.
• Investment Return After Retirement: Usually lower (4-6%) due to more conservative allocation. Example: 5% reflects a more bond-heavy portfolio to reduce risk.
• Annual Inflation: Historically averages 2-3% in the US. This affects both your investment returns and cost of living adjustments.
• Bitcoin Price Model: Projects future Bitcoin price based on historical patterns and your growth assumptions. The model considers Bitcoin's historical volatility and potential for exponential growth while accounting for market cycles.
• Take Profit Strategy:
  • Take Profit Rate: Percentage of Bitcoin holdings to sell when reaching price targets (e.g., 20% means selling 1/5 of holdings)
  • Take Profit Start Year: When to begin implementing the take-profit strategy (typically aligned with approaching retirement)

2. Contribution Phase

• Annual Salary Increase: Typically 2-5%, matching or slightly above inflation. Higher rates (6-10%) possible in tech or high-growth industries.
• 401k Contribution: Maximum allowed is 23,000$ (2024). Typical range is 10-15% of salary.
• Employer Match: Common ranges are 3-6% of salary. Example: A 100% match up to 4% means if you contribute 4%, your employer adds another 4%.
• Max Match Salary: The salary cap for employer matching, often 100% but some companies limit it (e.g., 75% means matching only applies to first 75% of your salary).

3. Retirement Phase

• Social Security Benefits:
  • Start Age: Can begin at 62 (reduced benefits), Full Retirement Age (66-67), or delay until 70 for maximum benefits
  • Monthly Benefit: Get your personal estimate at SSA's Benefit Calculator
• Other Income After Retirement: Additional income sources like consulting work, book sales, YouTube revenue, rental income, or part-time work. This helps reduce portfolio withdrawals.
• Other Assets at Retirement: Assets that will be converted to cash at retirement, such as:
  • Primary home sale proceeds
  • Secondary property sales
  • Vehicle sales
  • Other valuable assets
  These are added to your traditional investment portfolio in your retirement year.

4. Understanding the Values

• Nominal Value (Future Value): This is the actual dollar amount you'll see in your accounts in the future. It's higher than the real value because it includes inflation. For example, $1,000,000 in 30 years will buy less than $1,000,000 today.
• Real Value (Present Value): This shows what your future money is worth in today's purchasing power, after adjusting for inflation. This gives you a better idea of your actual wealth because it accounts for the fact that money loses value over time due to inflation.
• Why Both Matter:
  • Nominal values help you understand the actual numbers you'll see in your accounts
  • Real values help you understand your true purchasing power and make better retirement planning decisions
  • For example, if you see "$2M nominal ($1M real)", it means your $2 million in the future will buy what $1 million buys today

4. Cost of Living Abroad

Default monthly cost ($3,750 or $45,000/year) assumes living abroad. Here's a comparison of popular early retirement destinations:

• Mexico:
  • Monthly living costs: $1,500-$3,000
  • Min wage: ~$250/month
  • Doctor's salary: $1,500-$3,500/month
• Portugal:
  • Monthly living costs: $2,000-$3,500
  • Min wage: ~$850/month
  • Doctor's salary: $3,000-$5,000/month
• Thailand:
  • Monthly living costs: $1,500-$3,000
  • Min wage: ~$300/month
  • Doctor's salary: $2,000-$4,000/month
• Malaysia:
  • Monthly living costs: $1,700-$3,200
  • Min wage: ~$300/month
  • Doctor's salary: $2,500-$4,500/month
• Panama:
  • Monthly living costs: $2,000-$3,500
  • Min wage: ~$450/month
  • Doctor's salary: $2,500-$4,500/month
• USA Comparison: $4,000-$8,000/month depending on location

Useful Resources for International Living:

• Numbeo - Detailed cost of living comparisons
• Expatistan - Real-time cost of living index
• International Living - Comprehensive guides and retirement indices
• Escape Artist - Resources for living, working, and investing abroad

5. Results

• The chart shows your portfolio's projected growth over time
• The table provides detailed year-by-year breakdowns of all financial components
• Key metrics are displayed to help you assess the feasibility of your retirement plan