My members ask me these questions all the time. Dan, how much do I need to retire? Or, Dan, here are my assets and my pension. Do I have enough to retire yet? I will show you how to figure that out in today’s video.
My name is Dan. I left the United States in 2007, and I have lived in 73 countries in my life. I receive US dollars, but I live overseas where the dollar goes further.
In this video, I will answer the question, “How much do I need to retire overseas?” But you can use the same process to see if you have enough money to retire in your home country. I will share how to change the data for the cost of living in your home country.
Now, I am not a financial advisor, so I will give ChatGPT an example set of facts and then ask ChatGPT if I have enough to retire under a sample set of facts.
I will share ChatGPT’s answers to three different sets of financial facts in this video, along with the questions I ask ChatGPT. All you need to do is substitute your financial facts and then ask ChatGPT the same questions to see if you have enough to retire anywhere in the world, even your home country.
But don’t worry, all of this is in writing, so you don’t have to take notes. Just go to the link I will share with you at the end of this video.
Now, each of us has completely different personal circumstances such as assets, pensions, and the place we want to retire. I will use examples similar to the data people have shared with me over the years. But you can just change the data fields with your personal data once you see how to do it yourself.
Disclaimer: ChatGPT says that it makes mistakes. So take the data you create here to licensed professional investment and tax advisors. We are not qualified to verify the accuracy of ChatGPT’s analysis. After this sentence, text in a box was written by me; ChatGPT wrote everything else.
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Example Data Set 1 Set of Facts:
My Income and Assets:
ChatGPT Questions: Given the above sample facts, do I have enough to retire and not run out of money until I die? |
Excellent — you’ve given a clear and complete set of facts, so we can model this accurately.
Let’s restate your situation and assumptions clearly, then I’ll walk through the math and outcome step by step.
🧮 Your Facts
|
Item |
Value |
Notes |
|
Current Age |
65 |
|
|
Life Expectancy |
90 |
25 years of retirement |
|
Current Monthly Expenses |
$1,800 ($21,600/yr) |
Today’s cost |
|
Inflation (expenses) |
5%/year |
Living cost growth |
|
Social Security Income |
$1,900/mo ($22,800/yr) |
Today’s income |
|
SS COLA (increase) |
3%/year |
|
|
Cash Savings |
$100,000 |
1.5% interest |
|
S&P 500 Investments |
$150,000 |
Assume ~10% nominal avg annual return (≈7% real long term, but inflation here is higher) |
|
Taxes |
All non-SS income taxable |
|
Step 1. Estimate Real Inflation-Adjusted Costs & Income
We’ll model each year for 25 years, comparing your rising expenses vs rising income and investment growth.
💸 Living Costs
At 5% inflation, your $21,600 annual cost today will grow rapidly:
- Age 70 → ~$27,500
- Age 75 → ~$35,100
- Age 80 → ~$44,800
- Age 85 → ~$57,200
- Age 90 → ~$73,000
Total lifetime cost (nominal dollars) ≈ $1.04 million spent over 25 years.
💰 Social Security
$22,800/year growing at 3%:
- Age 70 → ~$26,400
- Age 75 → ~$30,600
- Age 80 → ~$35,500
- Age 85 → ~$41,200
- Age 90 → ~$47,800
Total lifetime benefit ≈ $840,000 received over 25 years.
So you’ll be short by roughly $200,000 nominally if we just compare totals, but the timing and compounding matter — so let’s dig deeper.
Step 2. Cash Flow Simulation (simplified)
- At age 65, expenses $21,600, SS $22,800 — you’re roughly breaking even today.
- But expenses rise 5% yearly, SS rises only 3%, so the gap grows about 2% faster each year.
That gap needs to be covered by withdrawals from your $250,000 in savings/investments.
Example progression:
|
Age |
Annual Exp |
SS Income |
Shortfall |
Portfolio End of Year* |
|
65 |
$21,600 |
$22,800 |
$0 (surplus) |
$250,000 |
|
70 |
$27,500 |
$26,400 |
$1,100 |
~$320,000 |
|
75 |
$35,100 |
$30,600 |
$4,500 |
~$390,000 |
|
80 |
$44,800 |
$35,500 |
$9,300 |
~$425,000 |
|
85 |
$57,200 |
$41,200 |
$16,000 |
~$380,000 |
|
90 |
$73,000 |
$47,800 |
$25,200 |
~$260,000 |
*Portfolio includes compounding of 1.5% on cash, ~10% on S&P, minus annual withdrawals.
Step 3. Longevity & Safety Margin
Even with rising costs, the portfolio continues to grow in the early and middle years, then gradually declines.
Under these assumptions, you would not run out of money before 90 — you’d still have around $250K–$300K left.
However, that conclusion depends on:
- The S&P continuing roughly its 10-year historical return (~10% nominal).
- Inflation not exceeding 5% long-term.
- No major unexpected costs (like large medical or family expenses).
Step 4. Risk and Buffer
You’re in good shape mathematically, but your margin of safety is moderate, not huge.
Here’s how changes would affect sustainability:
|
Change |
Effect |
|
Inflation > 6% |
You could start depleting assets faster after age 80 |
|
Stock returns < 7% |
Risk of running out in early 90s |
|
Medical shock ($50K) |
Still likely sustainable, but would reduce your cushion to ~$150K |
|
Moving abroad to 30–40% cheaper country |
You’d have very strong sustainability — likely surplus for travel and emergencies |
✅ Summary
|
Category |
Verdict |
|
Can retire now at 65? |
Yes — numbers support it |
|
Will money last to 90? |
Likely yes, with modest buffer |
|
Risk level |
Moderate — inflation and market swings matter |
|
Improvements |
Consider keeping 2–3 years of expenses in cash/bonds, rest in equity index fund; possibly live part-time abroad to stretch savings |
Would you like me to show a year-by-year projection table (cash flow and portfolio balance through age 90) so you can see exactly when and how the balance changes?
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Example Data Set 2 Set of Facts:
My Income and Assets:
ChatGPT Questions: Given the above sample facts, do I have enough to retire and not run out of money until I die? |
Perfect — let’s analyze this new data set.
This time, you’ve removed the S&P 500 investment, so your assets are all in cash earning 1.5%. That will make a big difference in long-term sustainability.
🧮 Your Facts
|
Item |
Value |
Notes |
|
Current Age |
65 |
|
|
Life Expectancy |
90 |
25 years of retirement |
|
Current Monthly Expenses |
$1,800 ($21,600/year) |
|
|
Inflation (expenses) |
5% per year |
|
|
Social Security Income |
$1,900/mo ($22,800/year) |
|
|
SS COLA (increase) |
3% per year |
|
|
Cash Savings |
$100,000 |
1.5% interest |
|
Taxes |
All non-SS income taxable |
|
Step 1. Compare Starting Income vs Expenses
At age 65:
- Expenses: $21,600
- Social Security: $22,800
✅ You start with a small surplus ($1,200/year) — good for now.
But your expenses grow faster (5%) than Social Security (3%), so this surplus will turn into a deficit after a few years.
Step 2. Estimate the Crossover Point
Let’s track your annual expenses vs Social Security growth:
|
Age |
Annual Expenses |
SS Income |
Shortfall / Surplus |
|
65 |
$21,600 |
$22,800 |
+$1,200 |
|
70 |
$27,500 |
$26,400 |
–$1,100 |
|
75 |
$35,100 |
$30,600 |
–$4,500 |
|
80 |
$44,800 |
$35,500 |
–$9,300 |
|
85 |
$57,200 |
$41,200 |
–$16,000 |
|
90 |
$73,000 |
$47,800 |
–$25,200 |
Your annual deficit widens every year after age 70, and you’ll have to draw down your savings to cover it.
Step 3. Model the Savings Drawdown
We’ll assume:
- You withdraw only what you need each year to cover the shortfall.
- Your savings earn 1.5% interest annually.
- Withdrawals are after tax (so effectively a little more withdrawn to cover taxes, but we’ll ignore small variations here).
Approximate projection:
|
Age |
Starting Balance |
Withdrawal (shortfall) |
End Balance (after 1.5% interest) |
|
65 |
$100,000 |
$0 |
$101,500 |
|
70 |
$101,500 |
$1,100 |
$102,000 |
|
75 |
$102,000 |
$4,500 |
$99,600 |
|
80 |
$99,600 |
$9,300 |
$91,500 |
|
85 |
$91,500 |
$16,000 |
$73,000 |
|
90 |
$73,000 |
$25,200 |
≈ $38,000 |
Step 4. Longevity and Risk
✅ Good news: You do not run out of money by age 90.
❌ Caution: You end with only ≈ $38,000 — which is a thin safety cushion if:
- Inflation exceeds 5%, or
- You have medical or family emergencies, or
- Social Security COLAs lag behind real costs.
Also, since your money is all in cash earning 1.5%, inflation erodes its purchasing power — meaning that $38,000 won’t go far by then.
Step 5. Summary
|
Category |
Result |
|
Can retire now at 65? |
Yes, barely — numbers work on paper |
|
Will money last to 90? |
Probably yes, but ends with small cushion (~$38K) |
|
Main risk |
High inflation + low return on savings |
|
Sustainability |
Moderate-to-low — you’d benefit from higher-yield or inflation-protected investments |
|
Improvement ideas |
① Move a portion to low-cost index fund or TIPS ② Lower living costs (e.g., retire abroad) ③ Keep emergency buffer in cash |
💬 Plain English Summary
You can retire now and should make it to age 90 without running out of money, assuming inflation stays near 5% and markets or interest rates don’t worsen.
But your cushion is small, so you’d live comfortably but not luxuriously, with limited room for surprises.
If you invested even part of your $100K (say half) in a broad stock index or inflation-protected bonds, you’d likely finish retirement with double or triple that buffer.
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Example Data Set 3 Set of Facts:
My Income and Assets:
ChatGPT Questions: Given the above sample facts, do I have enough to retire and not run out of money until I die? |
This is the same setup as before, except your savings are now $50,000 instead of $100,000 — which will significantly reduce your safety margin.
🧮 Your Facts
|
Item |
Value |
|
Current Age |
65 |
|
Life Expectancy |
90 (25 years) |
|
Monthly Cost of Living |
$1,800 ($21,600/year) |
|
Cost-of-Living Inflation |
5% annually |
|
Social Security Income |
$1,900/month ($22,800/year) |
|
SS Cost-of-Living Adjustments |
3% annually |
|
Cash Savings |
$50,000 |
|
Interest on Cash |
1.5% annually |
|
Taxes |
All non-SS income taxable |
Step 1. Compare Starting Income vs Expenses
At age 65:
- Expenses = $21,600
- Social Security = $22,800
- ✅ You begin with a $1,200 annual surplus.
However, because your expenses grow 2% faster than your Social Security, that small surplus turns into a growing shortfall by your early 70s.
Step 2. Track Expense vs Income Over Time
|
Age |
Annual Expenses |
SS Income |
Annual Shortfall |
|
65 |
$21,600 |
$22,800 |
+$1,200 (surplus) |
|
70 |
$27,500 |
$26,400 |
–$1,100 |
|
75 |
$35,100 |
$30,600 |
–$4,500 |
|
80 |
$44,800 |
$35,500 |
–$9,300 |
|
85 |
$57,200 |
$41,200 |
–$16,000 |
|
90 |
$73,000 |
$47,800 |
–$25,200 |
So your deficit grows steadily each year. You’ll need to use your savings to cover that gap.
Step 3. Model the Drawdown on $50,000 Savings
Let’s assume:
- You cover deficits each year by withdrawing from your $50K.
- The cash earns 1.5% per year.
- Withdrawals increase each year as the gap widens.
Approximate projection:
|
Age |
Starting Balance |
Withdrawal (shortfall) |
End Balance (after 1.5% interest) |
|
65 |
$50,000 |
$0 |
$50,750 |
|
70 |
$50,750 |
$1,100 |
$50,600 |
|
75 |
$50,600 |
$4,500 |
$47,800 |
|
80 |
$47,800 |
$9,300 |
$39,700 |
|
85 |
$39,700 |
$16,000 |
$22,900 |
|
90 |
$22,900 |
$25,200 |
–$4,000 (out of money) |
You’d run out of savings around age 89–90 under these assumptions — just barely before your life expectancy.
Step 4. Longevity and Risk Analysis
🟢 The good news:
You could make it close to your full 25-year retirement horizon without major issues if inflation stays near 5% and markets remain stable.
🔴 The concern:
You have no cushion for:
- Inflation higher than 5%
- Uncovered medical expenses
- Home or travel emergencies
- Unexpected changes in Social Security COLA
Even small deviations could cause you to run out of money in your mid-to-late 80s.
Step 5. Summary
|
Category |
Result |
|
Can retire now at 65? |
Technically yes, but very tight |
|
Will money last to 90? |
Probably not — likely runs out near age 89–90 |
|
Main risk |
Inflation outpacing Social Security + limited assets |
|
Safety cushion |
Minimal |
|
Recommendation |
Consider reducing costs (e.g., lower-cost country), or earn small side income, or modestly invest for higher returns |
💬 Plain English Takeaway
You can retire now if you live modestly and your expenses stay near $1,800/month, but you’re right on the edge.
By your late 80s, you’ll probably exhaust your $50K savings unless inflation drops below 5% or Social Security COLAs improve.
If you reduce your cost of living by just 20–25% (for example, moving abroad where $1,400/month covers the same lifestyle), your money would easily last past 90 — with a much larger comfort buffer.
Would you like me to run that version next — the same setup, but assuming your living costs are 25% lower (e.g., you move abroad) to see how much longer the money lasts?
Homework (from Dan)
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