00:03have you ever wondered what happens to
00:06your Social Security benefits if you
00:09choose to retire early well I'm going to
00:12answer that question today because I am
00:14an early retire that has put money into
00:19the federal government Social Security
00:21program in the United States and I have
00:23an expectation that I will receive that
00:2862 how much will it be will it be bigger
00:31than I expected or smaller than I
00:33expected will I still be eligible for it
00:36in fact you know that we live abroad
00:39here in Portugal will we be able to
00:41receive our social security benefits
00:44even though we're not living in the
00:47States so right in front of me is my
00:49social security statement and I'm going
00:52to share with you guys today exactly how
00:54much I expect to receive as a monthly
00:58benefit from the Social Security
00:59administ ation when I hit age
01:0262 this is a very interesting and
01:05transparent video that I'm going to
01:06share with you guys today because you
01:08know that I retired early at age
01:1239 after achieving Financial
01:15independence with my wife we had over
01:17$2.5 million invested in the stock
01:20market and so therefore we hit our fire
01:24number and could quit our jobs and
01:26quitting your jobs early means that it
01:30how much you eventually get from the
01:32Social Security Administration and keep
01:35in mind if you paid into Social Security
01:39you are entitled to that benefit and
01:41that is exactly what Christina and I did
01:45the years of work and labor we gave the
01:49federal government a portion of our
01:51check and the agreement is that in
01:54exchange for that we are entitled to
01:57receive a monthly benefit at age
02:0062 and if there's anyone that is
02:03pursuing Financial Independence and
02:05plans to retire early you're going to
02:07want to watch this video so that you
02:10understand how that benefit is going to
02:12play out in your financial journey and
02:16so on today's video I am actually going
02:18to take you guys into my social security
02:21benefits statement I'm going to share
02:23with you guys how much I made every
02:26single year up to the point where I
02:28retired early and when I look at this I
02:32am still in awe because on what I think
02:36was a very humble salary I was able to
02:41amass a fortune and a lot of that had to
02:46deal with the fact that Christina and I
02:49were investing so aggressively our
02:52savings rate was up to 70% at one point
02:56and as I go through this statement I'm
03:00going to talk about some things that go
03:02beyond just these numbers the things
03:06that you should be doing so that you put
03:08yourself in a position where that you
03:11aren't necessarily reliant on your
03:14Social Security in order to sustain
03:16yourself in retirement and I'm just
03:21now if you take the amount of money that
03:25we have invested in the stock
03:31was around $2.5 million when we
03:35retired and let's say we never invested
03:39another dollar into our investment
03:43portfolios and we allowed those
03:46Investments to grow for the next 23
03:50years the age that we are eligible to
03:55Security if you calculate a return of
03:59about 10% and we've actually been
04:01getting a a greater return than that
04:03since we retired 5 years ago if you take
04:07it from the point that we retired in
04:112019 and estimated out 23 years you will
04:16see that that $2.5 million turns into
04:23million thanks to compound interest and
04:26the average return of the stock market
04:30and so those numbers are astronomical
04:33and inspiring when we are talking about
04:35Building Wealth by investing in the
04:37stock market you know we're in a very
04:40fortunate situation because we don't
04:44have to pull from our stock portfolios
04:47because we have other assets that are
04:49paying our monthly bills here in
04:52Portugal we have our real estate alone
04:55which covers our monthly expenses and so
04:59that money that we have invested in the
05:01stock market there is absolutely no
05:03doubt in my mind that that money is
05:06going to reach those levels but let's
05:09get focused let's talk about the subject
05:12at hand my social security statement so
05:16if you haven't done this before it's
05:18really easy and straightforward to do
05:22sss.gov website on the website you will
05:25see your social security or it says my
05:28social security statement you can go to
05:30that if you haven't created an account
05:32you can create an account I already have
05:34an account so I'm just going to Simply
05:36sign in and it's going to ask me for a
05:42information and then it's going to ask
05:44me to input some other things and then
05:48voila here we have it my social security
05:52statement now what I like about the
05:54Social Security Administration website
05:57is that it's actually pretty Prett user
06:00friendly I know that in the past this
06:03website was not very easy to look at
06:05pulling up your statement was kind of a
06:06hassle but they do a really good job of
06:10summarizing everything on one screen one
06:13of the things that you will see
06:15immediately that pops out on mine is the
06:20eligibility and earnings now when you
06:22first start paying into Social Security
06:25from your paychecks if you're
06:26self-employed if you're W2 employee if
06:29you have a business business whatever
06:30the case may be when you first start
06:31paying into that you start to amass
06:34what's called work credits and in order
06:37to actually receive a benefit you have
06:41to meet a certain amount of work credits
06:44and you can see that from my statement
06:48that I am eligible already after the
06:51years that I put in I've already
06:53received my 40 credits needed to receive
06:56benefit now what's also on this page
06:59page is I can review my full earnings
07:03records and I'm going to pull that up
07:04now because I want you guys to also have
07:08a look at this and see where I started
07:12and where I ended up on my journey to
07:14financial Independence and so I'm going
07:221995 that's the first year that I
07:25registered a payment into Social
07:27Security up until 2019
07:3019 the point where I achieved Financial
07:34Independence and chose to retire early
07:36now on this screen you will see the year
07:40worked the taxed Social Security
07:43earnings for that year and the tax
07:46Medicare earnings for that year and if
07:501995 you will see that in
07:57$253 in 96 I earned quite a bit more
08:044,353 that's income growth right there
08:08but as the years go on you can see my
08:10income slowly but steadily Rising now I
08:15did a quick calculation of my earnings
08:19throughout the years and basically from
08:272019 my average salary when you take all
08:30those years into account was a little
08:34$50,000 now towards the end of my
08:37working career I was
08:40making well this is interesting my last
08:4596,5 you know I look at all of the years
08:48in between that and I can see that when
08:50I first started working for the federal
08:52government in 2003 I made about
08:56$38,000 and every year
09:00my salary was going up but then it
09:02dipped back down and it kind of It kind
09:04of jumped around a bit and it was in
09:072011 that I started working in the San
09:10Francisco Bay area and because the San
09:12Francisco Bay area has a High Cost of
09:14Living you can see that my salary in the
09:18San Francisco Bay Area was much higher
09:20than than many of my other years of work
09:24and that time in the Bay from
09:272011 to about 2015 2016 you could see
09:32that my salary was really high back then
09:34but for San Francisco standards that
09:38amount of money I mean it actually
09:40really wasn't that high but it really
09:43wasn't about what we were earning it was
09:45about how we were saving and investing
09:47that money and these years this this
09:512010 2011 years those were kind of the
09:56the initial start of our financial
09:58Independence Journey when we got very
09:59intentional about making more saving
10:02more and investing more money and we
10:05were earning money not just at at our
10:08jobs but also through our side hustles
10:10through our real estate transactions we
10:12were doing so many things to be able to
10:14invest more money into the stock market
10:16to grow that Investment Portfolio but
10:19you can see that those years in the Bay
10:20Area those were high income years at our
10:24at our W2 job at my W2 job Christina's
10:28income was relatively the same and then
10:31you can see when we went to Japan in
10:332016 2017 2018 2019 our income uh fell
10:40because when we went to Japan we took a
10:42pay cut uh but there were other benefits
10:44that really made that pay cut make a lot
10:46of sense and so I'm only sharing this
10:49with you because I think it's so
10:51interesting to see how my income grew
10:55throughout the years and this brings up
10:57a point that I want to make for a lot of
11:00the naysayers out there that say things
11:04like there's no way I can Achieve
11:06Financial Independence because I'm not
11:08making a lot of money well when I first
11:11started my career in 2003 really I was
11:18$38,000 by the time I ended my career I
11:21was making close to 100 now that's not a
11:23huge difference you know but I worked
11:26for the federal government but
11:30the point is that where you start is not
11:33where you're going to end up on this
11:35journey you're going to find ways to
11:38increase your income at work and for us
11:41more importantly outside of work that's
11:43where the real wealth was really
11:46developed through our side hustles
11:48through our investment in real estate
11:50and through our returns in the stock
11:51market so just just keep that in mind
11:53even though you might not be making a
11:54lot of money at your 9 to-5 you can you
11:58will make more money once you get
12:00intentional about this journey so that's
12:02a review of my earnings now if we scroll
12:05down to the plan for
12:07retir this is a very interesting part of
12:12your social security benefit it's so
12:14important that you understand this
12:16especially if you're talking about
12:17retiring early when your Social Security
12:20benefits are calculated they base it on
12:22your highest 35 years of earnings this
12:26is a very important point they base it
12:28on your highest 35 years of earnings now
12:33since I retired early and if there are
12:35other people that are out there that are
12:37going to be retiring early they must
12:40understand that if you do not work 35
12:43years what they're going to do is they
12:45are going to have to put in zero
12:48earnings in your calculations for the
12:51years that you did not work up to 35
12:53years and that is going to definitely
12:56impact the amount of money you get
12:59because on these Social Security
13:00statements there is an assumption that
13:03you will continue to make money at the
13:05amount of money that you made the
13:07previous year so for example if you made
13:11$100,000 one year your social security
13:13statement is going to anticipate in your
13:17projected benefit that you will continue
13:20to make $100,000 a year until you are
13:23eligible to receive your social security
13:25benefit at let's say age 62 and it's
13:28going to use that money to increase your
13:31social security benefit up to a certain
13:34amount there is a maximum amount of
13:35money that Social Security will pay
13:38someone regardless of how much money
13:39they make but nevertheless the
13:42assumptions with these Social Security
13:45statements is that when they are
13:46calculating your benefit they are
13:48assuming that you are going to work all
13:51the way until you are eligible for the
13:54benefit now if you are early retiree
13:56that is not going to be the case you May
13:59quit decades before you are actually
14:02eligible to receive Social Security and
14:05if that is the case that means that
14:07assumption that you will continue to
14:10contribute money into the Social
14:11Security System doesn't apply to you and
14:15this means that your benefit will be
14:17based on the years that you worked and
14:19the remaining years will be counted as
14:23zeros and so what's really cool on the
14:26Social Security website is that you can
14:29put that into their retirement planning
14:33calculator and I'm going to show you
14:34guys that here so you can see here the
14:39average future annual salary let's say
14:43you change that to zero you anticipate
14:47that you aren't going to make a single
14:48dollar and because of that you are not
14:51going to make any more contributions to
14:54Social Security or Medicare based off of
14:58that you can see that in my example that
15:03by the time I'm age 62 I will receive
15:09$1,985 if I take it at 62 now keep in
15:13mind all of these numbers are adjusted
15:15for inflation if I wait till I'm 67 I
15:22$2,819 and if I delay it to age 70 I
15:29this is really important to
15:31do especially when you're running your
15:34calculations and determining how Social
15:37Security is going to play into your
15:38financial Independence plan I will tell
15:41you that for us this income is not
15:45something that we are relying on when we
15:48ages this will be income that because we
15:52have paid into it we will collect it
15:55what we do with that money we still
15:57don't know yet the other aspect of your
16:00social security statement that you
16:01should look at is the more benefits
16:04section and in this section you can see
16:07things like whether or not you qualify
16:09for Medicare what your family is
16:11entitled to as far as a Survivor benefit
16:15what you are entitled to as far as a
16:17disability payment you can see lots of
16:20other things in this area that are some
16:23of the additional benefits that's
16:24provided as a part of Social Security
16:26and the fact that you paid into it
16:32caveats that the Social Security
16:34Administration puts on these statements
16:38and I think this is so
16:40interesting they will say something like
16:43important things to know about your
16:45Social Security benefits read this
16:50because a point that it makes is that
16:54Social Security is not meant to be your
16:57sole income in retirement it's supposed
17:00to supplement other sources of income
17:04and unfortunately in the US a lot of
17:08people rely solely on Social Security
17:12and they found that it is not something
17:14that really allows them to live a a
17:18comfortable life at all in fact people
17:20are struggling when they just live
17:23solely off of Social
17:25Security now I bring this up and I
17:28emphasize folks in the US because there
17:31are people that are living in other
17:34parts of the world solely off of their
17:37social security and they are
17:39living very fruitful and comfortable
17:45retirement and that's one thing that I
17:48have seen here in Portugal I saw it when
17:51I was in Thailand I saw it in Japan you
17:53know I I've seen it throughout the world
17:55people that are receiving a social
17:57security benefit from the US and they
18:00are spending that money in other
18:02countries in their retirement and they
18:03are living a very good life so one thing
18:06to keep in mind is that you are eligible
18:09to receive your social security benefits
18:12practically anywhere you're at in the
18:14world if you have access to a banking
18:17system if you have access to wire
18:22transfers you have access to that money
18:25um and what a lot of people will do is
18:27they will have their social Security
18:29benefits deposited into their US bank
18:31accounts then they would just make a
18:32transfer from their US bank accounts to
18:35whatever country that they are in so
18:37that's something to keep in mind that's
18:38a question that always comes up if I
18:40move abroad will I still be able to
18:42receive my social security benefits yes
18:44if you are eligible for Social Security
18:46you paid into the system you are
18:48eligible for it there's also one aspect
18:51that kind of made me giggle when I when
18:53I looked at this statement there's a
18:55line here from the Social Security
18:57Administration that said says with you
19:02Journeys I just thought that was funny
19:05because we talk about uh our Rich
19:07journey and social security benefit they
19:10they along for the ride too they they
19:11want to contribute to your journey and
19:14you know I know there's a lot of talk
19:16about uh the Social Security benefits
19:19not being around in the future you know
19:22that that's a whole video within itself
19:24whether or not it's even going to be
19:25here now I want to go back to the point
19:29about social security not being a
19:34pivotal part of our financial
19:35Independence plan and it's because for
19:39us we really wanted to have Financial
19:42Freedom that we were in control of you
19:45know there's a lot of talk of Social
19:47Security just going away just
19:48disappearing the funds running dry now I
19:51don't think that will happen but if it
19:53did we would not be reliant on it for us
19:56to be able to stay retired and live a
19:59comfortable life and so I encourage you
20:01guys to pull up your social security
20:03statement to understand where you stand
20:05in this regard but to go above and
20:08beyond that as a source of income do not
20:11rely completely on this you must be
20:15Building Wealth outside of this that you
20:19can live off of so that is through real
20:21estate through the stock market through
20:24a business of some sort that will go on
20:27and continue to pay you
20:29money when you don't have to work at
20:31that business and so I hope this video
20:33has given you food for thought and as
20:36usual if you like this video please give
20:38it a thumbs up subscribe to our Channel
20:40and join the journey
