Retire Early How Much Money Do I Need 4% Rule? Lake Chapala, Ajijic, Guadalajara, Cancun,

Retire Early How Much Money Do I Need 4% Rule? Lake Chapala, Ajijic, Guadalajara, Cancun, Mexico City, Mazatlan,

I Will tell you the magic number to save for retirement.
Don’t Out Live Your Money 4% Rule?
How Much Money Do I Need To Retire?
In this video, I want to explain the 4% rule. This is also known as the Safe Withdrawal Rate – or basically the rate at which you can spend your money without ever running out of money.

An easy way to calculate what this means for you – and how much money you’ll need to retire.

There must be some limit to how long you can withdraw 4% and still have money left over, right? The study that explains the 4% rule is called the Trinity Study, and it looked at how much money you’d need to retire for every year.

The study found that if you invest 50% of your money in stocks and 50% of your money in bonds, withdrawing 4% of your money will be fine for 25 years, 100% of the time. Doing it for 30 years – you’ll still have money left over 96% of the time.

So to make sure we’re all clear – the 4% rule isn’t 100% foolproof.
For those of you that want to be 100% sure your money will never run out (especially for those of you who plan to retire longer than 30 years), use the 3% rule and only withdraw 3% of your investments per year.
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Our personal story
My wife Lori and myself sold our home and our business in Hawaii and in 2006 we became the homeless millionaires. Our goal was to travel around the world and
“living the good life” are basic philosophy is
Fly First Class but PAY Coach Price ”
.We have enjoy our world tour of 35 countries in the last 25 years. In 2012 we returned back to the big Island of Hawaii and bought a small cottage. For 2 Years we using Hawaii as our home-base.
We now have moved to Mexico and using Mexico is our home-base as we continue to travel around the world.
We have been asked by our friends to start this YouTube channel blog to share our experience and give some tips on budget travel.
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About the Author: rr1455

59 Comments

  1. No fear about your retirement by following the 4% rule. 25 to 30 years of income by following this simple formula a 4% withdrawn from your savings investment account

    1. Jerry Brown travels Hi Jerry. I’m a big fan of your inspirational videos bit wanted to make some comments regarding the 4% rule.

      The Trinity Study covered an unprecedented period of growth in the US. replicating that in the next 100 years will be very difficult to replicate.

      secondly the Trinity Study only showed a 95% success rate. Cold comfort to the 4 or 5 people per 100 who failed. Even more importantly the study counted a closing balance of $1 as a success. I’m not sure an 80 year old with $1 left having retired at 50 would agree.

      As you mention in your video 3% is a more conservative measure and those planning longer retirements should perhaps look to 2.5%.

      some good analysis of the validity of the 4% rule have been done by the likes of pfau.

      I agree with the general message that people should save more and can probably retire sooner than they think.

    2. You must be well aware by now how valuable you both are to all who watch your channel. My sincere appreciation for
      your insights on a multiple range of vital topics. We all known we have to independently investigate for our selves however you have started the process for us
      and assisted us in asking Q’s we mat not have thought to ask. From me a sincere thanks for you imagination and generousity.

  2. We are just starting down this road. Our combined social security will be about $32,000. This does not include any 4% draw from savings and investments. So by moving to either Ajijic, Oxacca, or Uruapan, your video indicates we should be just fine financially. Our plan is to move either in this coming late fall or early next spring. We are concerned (from reading maybe too many Facebook posts) that the Lake Chapala area is loosing some of its luster with rising prices and too much popularity with expats and tourists. When you have time, could you comment on that, please? Also, I am not sure how US federal taxes will impact our income figure. Any thought on that question would also be helpful. Thanks very much for your videos.

  3. And don’t forget “side hustle” as many people continue to “do something” after a more traditional retirement. I did. You can sell guavas if you grow them or if you’re really talented make some YouTube videos and become a minor celebrity. Jerry! 😉

  4. how much money does it take to crose the border going in to mexico and much does it cost to travel i live in ga. just wonsering how much does gas. cost. there how long should you look around befour you rent a place to rent does the prices there stay prity stable

  5. Jerry,

    Another approach is to invest in dividend growth stocks and reinvest the dividends as you approach retirement. Then, after retiring you can simply live on the dividends and never have to touch the principle. Your money then is guaranteed to outlive you. One can easily build a dividend growth portfolio that will have a dividend only return on invested capital in excess of 4%. This is how I intend to fund my early retirement.

    Regards,
    Troy

    1. JDave, I believe you may be missing the point. Let’s say I picked the very worst time to invest in MSFT. Let’s say I invested my capital in November 2007, before the market crash. On November 2nd, MSFT hit a 52 week-high of $37.50. As a matter of fact this was the highest it had been in over 5 years. So, it was the very worst time for me to make an investment. In November 2007 MSFT was paying a quarterly dividend of $0.11 per share ($0.44 per year). Had I bought at the very top of $37.50 my initial dividend yield would have been 1.2%. Fast forward 10 years, MSFT is now paying $0.39 quarterly per share or $1.56 annually. Now my yield on cost is 4.2%. Actually it would be a bit higher because I would have been reinvesting those dividends for the past 10 years.

      But what about the 45% decline in 2008-09, you ask. I wouldn’t have cared. That too would have worked in my favor because I would have been reinvesting my dividends when the stock price was very low. Thus, I would now have a lot more shares than I would have had had the market not went down.

      The key to success in this strategy is to pick the very best companies (MSFT, JNJ, XOM, T, etc.) which have a proven track record of never cutting their dividend and never sell the stock no matter how far the price drops.

    2. Yes Shirley that is correct. I know that doesn’t sound like much but then again I only invested $8,553 in the stock. If you obtained similar results across a broad portfolio of stocks it will generate a sufficient amount of cash flow to partially fund your retirement. For example, a stock portfolio worth $250,000 would throw off almost $14,000 per year in dividends. Combined with social security and a small pension you should be able to live very well.

    3. JDave Foster
      I was watching this closely back then. I have a lot of dividend aristocrats and oil/gas stocks.
      All of my stocks went down back then but still paid over $40k/yr. in reinvested dividends without missing a beat.
      So more shares were bought,compounding,and even a couple of company and stock splits,etc. along the way.
      My 401k alone paid out close to $500k in dividends since 2009.
      Great example was Oneok stock. It didn’t drop until a few years after the Great Recession from about $71 to $21 a share so it doubled to 8k shares on its own since 2009 now paying about $2k/mo..
      So it would not have mattered in my case especially since I would be getting about $6k a month anyway because of pensions and social security.

  6. New subscriber. Thank you for your videos! My husband and I are in our 40’s and this information is some good insight as to what we can expect in retirement.

    1. Patriota April you have 180 videos to help you. And Thank you for your comment and thank you for subscribing.
      We have asked you for your help by Sharing our videos with your friends on Facebook or your social media. We have 4158 subscribers as of today.
      You can watch the numbers grow on our subscribers and see what a difference it makes having you being part of our JERRY/ LORI BROWN travels adventure team.
      Lori and I thank you.
      Jerry & Lori
      Keep doing what you do it is appreciated by all of us.   

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    2. A good option is to each day or so send out a photo/message to Google+, Facebook, Instagram and Twitter. Also, most people are concerned about safety and seeing doctors, particulary with Medicare. The media rarely ever talks about retirement and safety in Mexico. Good luck.

  7. Better yet read “The Richest Man In Babylon” and during your productive years, pay yourself at least 10% before you pay anybody else or spend any money. 50% of people 50 and over have less than $8k in savings! 😬

    1. Thank you for your comment and thank you for subscribing.
      We have asked you for your help by Sharing our videos with your friends on Facebook or your social media. We have 4158 subscribers as of today.
      You can watch the numbers grow on our subscribers and see what a difference it makes having you being part of our JERRY/ LORI BROWN travels adventure team.
      Lori and I thank you.
      Jerry & Lori
      Keep doing what you do it is appreciated by all of us.   

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    2. The Richest Man In Babylon is a very good book. I have it and read it long ago but had forgotten some of the good advice it contains. Right now might be a good time for me to read it again and actually apply the wisdom in the book to my current financial situation..

    1. Oh I’m adventuring now. Living in my small 20 ft motorhome travelling the west for the past 5 months. Now I am just getting into the Colorado Rockies for summer. Its nice and cool up here. ( 90’s in Denver, 110 in AZ) And beautiful. Either going north to Yukon, NE US or Mexico next. Maybe all the way to the tip of S. America.

    2. Eric Baker
      Say you get 300 extra at 66 yrs 2 mos versus 62 yo; $1,000 vs $1,300. You give up $50,000 to get an extra $300; it will take you almost 14 years (unit 80 yo) to recapture that $50,000. The 7% believe starts after 66 yr 2 mos, but no expert. Another possible consideration is means-testing being put on SS bennies in the future.

  8. I truly believe that it’s a very good idea before jumping into retirement to talk to a few financial advisors.  And choose the advise of the ones you NEED to hear – not that ones that you WANT to hear.  I spoke with two financial advisors.  I told both I wanted to retire at 55.  One stated I could do it – but unless I signed up with him, he would not show me the plan he had laid out for me.  The other one I talked to (2 of them – they work as a team) – one said 56 – the other member said could be up to 58.  Guess which one I followed – the one that said I could retire between 56 and 58.  The main reason was the cost of insurance.  Inflation may be 3%, however medical costs go up 6-7%.   Once you pull the plug – it’s harder than hell to get back into the workforce.  BTW – I still have a few years to go.

    1. Excellent, excellent, excellent comment I know this will help out other people who need information about retirement and what you have shared here it is very good.

      Auctionjjk c you’re the greatest and keep doing what you do it’s appreciate by all.
      As you know we are excited about our YouTube community growing.
      As of today we have 4212 subscribers that have joined the community and are Sharing with their friends on their social media Pages.
      Weekly you can watch the subscription grow and it’s happening because you have taken the time to share with your friends. Our are goal is to get to 4500 subscribers by June 15.
      Lori and I appreciate all your help by supporting Our YouTube channel.
      Thank You for being a team player and subscribing to Jerry Brown Travels
      Jerry & Lori Brown

    2. one video that you should do is what both of your backgrounds were before moving to Mexico. What made you two decide to live abroad, etc?

  9. Jerry, well done. What I find inspiring about you and Lori is that you ‘Walk Your Talk’. Keeping doing what you are doing it’s appreciated by all 🙂

    1. Joel you’re the greatest and keep doing what you do it’s appreciate by all.
      As you know we are excited about our YouTube community growing.
      As of today we have 4212 subscribers that have joined the community and are Sharing with their friends on their social media Pages.
      Weekly you can watch the subscription grow and it’s happening because you have taken the time to share with your friends. Our are goal is to get to 4500 subscribers by June 15.
      Lori and I appreciate all your help by supporting Our YouTube channel.
      Thank You for being a team player and subscribing to Jerry Brown Travels.
      Jerry & Lori

    1. We made a video drivin in Mexico that may help in a small way. We don’t have any information as of today about renting a moving van. But if you do rent a vehicle you will have to have a letter from the rental company giving you permission to bring the vehicle down into Mexico Plus you’ll need car insurance Plus pay a deposit to bring the vehicle into Mexico when you take the vehicle out of Mexico the deposit will be returned to you.
      See link below driving in Mexico
      https://youtu.be/GQK8gvztD7A
      hank you for your comment and thank you for subscribing.
      We have asked you for your help by Sharing our videos with your friends on Facebook or your social media. We have 4212 subscribers as of today.
      You can watch the numbers grow on our subscribers and see what a difference it makes having you being part of our JERRY/ LORI BROWN travels adventure team.
      Lori and I thank you.
      Jerry & Lori
      Keep doing what you do it is appreciated by all of us.   

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      https://www.facebook.com/JerryBrownTravels/

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  10. The most important thing for smart people to do is Not to have a financial advisor. Most of the time they will direct you to their high fee mutual funds with trailing fees. Also pay off all debt including mortgage before investing in the stock market or bonds.

    1. Excellent Jim and excellent advice.
      Jim you’re the greatest and keep doing what you do it’s appreciate by all.
      As you know we are excited about our YouTube community growing.
      As of today we have 4318 subscribers that have joined the community and are Sharing with their friends on their social media Pages.
      Weekly you can watch the subscription grow and it’s happening because you have taken the time to share with your friends. Our are goal is to get to 4500 subscribers by June 15.
      Lori and I appreciate all your help by supporting Our YouTube channel.
      Thank You for being a team player and subscribing to Jerry Brown Travels.
      Jerry & Lori

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  11. I keep learning more and more with your videos… retiring 7/1/2018 and at age 62 I could start S.S. with combined income from pension, IRA disbursement, & S.S. totaling $2,700/month… I don’t think I would need anywhere near that much so thinking about delaying S.S. for a few years. No mortgage, no car payment, & I’m a cheap fart so feel confident things will work out O.K.. In 2009 I rode my motorcycle through 30 states, 13 National Parks, and over 14,000 miles… I’m thinking I will do something similar and maybe head down your way….I’d love to have a chat with you both and buy you dinner for all the great videos you’re creating….thanks again, Gary

  12. hi jerry, I wonder if anybody wants to think about the best eternal retirement plan JESUS CHRIST as lord an savior.
    everyone cares alot about retirement but who thinks about eternity????? JESUS CHRIST is the only way to GOD amen. seek JESUS now because time is running out on us all. 10 out of 10 people will die then comes eternity. thanks

    1. You can’t go wrong if you follow his Philosophy and direction in your life.
      Have you ever read the New Testament where everything that Jesus talks about is highlighted in red?
      Look at that and it’s his definition on the way to live, how to treat people, it’s a clear and simple representation of his message to the world. It’s not confusing. Because it doesn’t have all the dues and don’ts, the fear, the guilt that religion somehow retrace.
      you’re the greatest and keep doing what you do it’s appreciate by all.
      As you know we are excited about our YouTube community growing.
      As of today we have 4318 subscribers that have joined the community and are Sharing with their friends on their social media Pages.
      Weekly you can watch the subscription grow and it’s happening because you have taken the time to share with your friends. Our are goal is to get to 4500 subscribers by June 15.
      Lori and I appreciate all your help by supporting Our YouTube channel.
      Thank You for being a team player and subscribing to Jerry Brown Travels.
      Jerry & Lori

      Face Book
      https://www.facebook.com/JerryBrownTravels/

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  13. If there is 385k, why not getting 1-2 investment property, let say no mortgage. Rent will keep up with the inflation. I just feel that real estate is the most trustworthy investment. I quit stock as I hv no clue about it. Besides, property is the best way to generate the first bucket of gold to make the snowball runs faster

    1. Excellent to have good income properties. Most financial advisors recommend a diversified portfolio this way when one area of your investments is down the other ones can be up. The financial advisors I listen to recommend a mixture of Real estate, Mutual funds, eTFs and bonds.
      We personally have a rental income also and that’s working out very well.

      Thank You for being a team player and subscribing to Jerry Brown Travels.As you know we are excited about our YouTube community growing and you are part of our community as a subscriber and thank for all your personal help.

      As of today we have 5300 subscribers that have joined the community and are Sharing with their friends on their social media Pages.

      Weekly you can watch the subscription grow and it’s happening because you have taken the time to share with your friends. Our goal is to get to 6,000 subscribers by July 15.
      Lori and I appreciate all your help by supporting Our YouTube channel.
      Thank You you’re the greatest and keep doing what you do it’s appreciate by all.
      Jerry & Lori

      PS Would you like to know how much money you would need to save for retirement? See link below https://youtu.be/84gssFr0G2A

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  14. I have worked with many old people over 70 who wish they still worked but cannot. I think having an interest/hobby that you can do in old age is a good idea.

    1. Jerry Brown travels I am not saying you’re an old man or over 70..I am just making a statement from my experience with older people about what they told me. The happiest ones were the most active ones.

  15. Hi Jerry and Lori,

    We are in a position to live the 4% Rule. Thank you for this information. Separate question: Did you think it is crazy to be considering buying a piece of land sight unseen in Upper Ajijic in San Juan de las Colinas? We want a lake view, to be able to walk downhill to El Centro (not needing to drive every time we leave home) and have access to miles of hiking trails without needing to start the car. We also need room in our backyard for 4 dogs to move around. Building in San Juan de las Colinas would accomplish all of this and it doesn’t seem that undeveloped property fitting these desires comes along very often.

    I know only we can decide, but do you think even considering this is crazy? I’m coming in 7 weeks for a visit but I wouldn’t want to let this parcel get away if another opportunity to buy land meeting our desires isn’t likely to come along in the next 6-8 months. What do you and Lori think? Crazy to buy sight unseen or ok, since we can tell it has the view and location that meet our desires?

    I’m looking forward to hiking with you and the Donas Donuts gang in August.

    1. The best way I can answer that question is I ask myself what would I do.
      I would not buy a piece of property unless I looked at it, I walked on it, and ask people in the area what their experiences in that particular neighborhood.
      Don’t panic land is not selling that fast down here, Homes are on the market up to seven years,.
      There are so many variables about buying land in Mexico.
      By looking at the land and seeing the location you’re going to see if it meets all your needs such as being able to walk into the village And close to hiking.
      Don’t panic there’s lots of properties here for sale.
      When you get down this way please let us know send us a note here on YouTube comments and we will give you more information how we can meet up with you while you’re here.
      We don’t want to see you making a mistake.
      Here’s a link to a video we made about buying or renting in Mexico
      Renting or buying in Mexico https://youtu.be/8ZgDKr-Gr2k

      One more video questions and answer https://youtu.be/jsDl7499y5Y

    2. Thank you Jerry! I’ll be there the first 9 days of August. I’ll be in touch and plan on going on 1-2 Tuesday or Friday hikes to meet the hiking group too!

  16. Pretty good explanation Jerry. I would just add that 4% rule is a general starting point and not a 100% rule. It is advisable to have sizable cash outside of market you can count on during those market corrections or crashes. Because that is the time when you don’t want to draw ANY money from your portfolio, regardless of the 4% study because even though market might recover, your portfolio might not. There are other ways to mitigate the risk and hedge during the market downturns. Picking up a part time job for additional income, buying annuities, cutting down on expenses and basically being flexible with your lifestyle so you can weather the storm until market recovers so you can continue withdrawing your 4%. I would also plan very conservatively during acclimation phase preparing for retirement and over and under estimate. For example, I would plan to withdraw 3% instead of 4%. I would prepare for 6% market returns instead of 7%. I would do 30x yearly salary instead of 25. It will definitely come handy later on.

    1. Nice comment and Lori and I appreciate you very much.

      some times I suggest taking your yearly income and multiply it by 20 to get a basic formula and a goal for saving for retirement.

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