Elite Retirement

Greetings Everyday Spy,

I took my family to Cape Canaveral to visit the Kennedy Space Center and watch a Space-X rocket launch.

My son was overjoyed to meet actual ‘rocket scientists’ everywhere we went; at coffee shops, grocery stores, even just walking along the beach. 

To him, they were heroes. Explorers trying to reach Mars in self-landing rockets and space-age landing pads. 

The people we met during our trip were impressive.

But they were also just everyday people like you and me. Ordinary people who had received extraordinary training.

  • While I was learning covert entry, they were learning jet propulsion.
  • While I was experimenting with offensive driving, they were experimenting with solid-state rocket fuel.
  • While I was mastering pain tolerance, they were mastering applied mathematics.

I was surprised at how much CIA spies and SpaceX engineers have in common.

We both travel frequently, work under tight deadlines, and have devastating consequences for failure.

But we also enjoy sci-fi, skip commercials, forget to floss, and eat instant noodles late at night.

They were excited to hear my spy stories. I was excited to hear their space stories!

But the thing that resonated the most with us was our shared passion for freedom.

We agreed that life was a mission. A journey to find the ultimate freedom.

And the first step to finding freedom is recognizing when you are not free.

The difference between those who have freedom and those who want freedom is control.

  • Control of their time
  • Control of their career
  • Control of their financial security

The average SpaceX engineer and CIA operative make about the same salary: $83,500 a year. 

That is a sizable jump above America’s $31,000 average individual income, but still well short of the average income for attorneys ($120,000) or plastic surgeons ($235,000).

And just like spies, SpaceX engineers don’t have a lot of room for career growth.

The greatest demand is for entry level employees. The core work – be it espionage or engineering – has to be done. That means management and leadership positions are hard to come by.

The same is true in industries all across America.

The average person will receive 6 promotions in their life.

The typical promotion is between 5-8% of your base salary.

For spies and space cowboys, that means our max salaries will average out to $118,000 per year.

And after a lifetime of working…

We look forward to a stress-free, comfortable retirement.

Just like you. 

But there is a problem.

Less than half of all Americans ever get to retire.

The retirement dream is one we all believe in, but very few ever achieve.

Most Americans never get to retire, must keep working to afford ‘part-time’ retirement, or simply do not survive long enough to reach retirement age.

It is a sad truth, but a truth none-the-less.

30% of Americans do not live past 65 years of age.

And for those lucky enough to survive past 65, 22% will have to work the rest of their lives just to meet living costs.

Our culture has lied to us about retirement. 

     We were told that retirement is something everyone can look forward to.

     We were told that retirement is easy as long as you save.

     We were told that retirement is something we can count on.

We’ve been sold the lie that saving money is the key to retirement. 

But that isn’t true. And the math proves it.

**WARNING**

If you don’t like numbers, stop here! 

I’ll meet you at the **SOLUTION** section below.

Consider a high-income earning individual making $100,000 per year at age 40.

  • Assume this individual has saved 2x their annual salary by the age of 40, like we were taught to save.
  • Assume this individual has invested their retirement savings in strong accounts yielding 7% a year.
  • Also assume this individual has no dependents to care for and remains in perfect health.

When we project a fruitful career with regular raises (8% each) and excellent health through age 67, here is what we find:

  • Our high-income earner maximizes their annual salary at $136,000 per year
  • They generate just over $2 million in retirement savings in their account

According to every standard of retirement planning available, this individual should have a full and successful retirement.

But…

Even people earning 400% more than the national income average struggle to afford retirement.

Before our high-income earner can tap into their $2 million retirement fund, they have to pay certain costs associated with using their money.

  • Income taxes: Whatever retirement money you save, it is taxed as income before you can withdrawal it.
  • Inflation: America has a stable currency, but we also have a steady inflation rate.

When we put numbers to these costs and project healthy living, here is what we get:

  • Income tax: Based on an annual withdrawal equaling 80% of pre-retirement income, this individual will lose $32,640 a year to taxes.
  • Inflation: Based on 2.5% average annual inflation in the USA, purchase power for this individual will drop $50,000 per year

After the first year of retirement, the average high-income professional will lose 10% of their retirement savings.

Accounting for all costs and savings, a healthy single person who retired at 67 with $2 million in retirement savings will run out of funds before they turn 78.

After we account for expected social security income ($42,000) and average healthcare costs ($11,300 per year), our healthy retiree will run out of funds by 80 years old… 10 years earlier than their projected life expectancy.

And what about the 85% of America that makes less than $100,000 a year in annual income? 

At retirement age, the average American with strong retirement savings habits and in good health can expect:

  • $790,000 in their retirement account
  • 22% in annual taxes ($9,416)
  • Healthcare costs ($11,300 annually)
  • 2.5% annual inflation ($26,000 in lost purchase power annually)
  • An average Social Security payment of $18,000 per year

Average income earners in good health will run out of retirement savings 3 years faster than high-income earners.

But that is only if they manage to save 20% of their annual income every year… something very few people can afford because:

  • To earn competitive salaries, we take educational loans.
  • To afford our first homes, we accept high interest rates.
  • To meet the demands of raising a family, we leverage credit.

And debt carries with us into retirement:

  • 44% of people between 60-70 years old are paying a home mortgage.
  • 27% of people 60 years or older are paying educational loans for themselves or a spouse.
  • 40% of borrowers over the age of 65 are in default.

**SOLUTION**

For those of you who skipped

the math, thanks for coming back!

Private intelligence is full of retired CIA, FBI and military officers that have to keep working after retirement.

Career public servants are some of the worst impacted by the retirement savings lie. 

One of the main reasons I left CIA was because I saw people retiring after 30 years of service only to come back to work a few years later. 

After a lifetime spent defending freedom, they were still not free…

Except for a small, elite group that did things differently. 

They found a way to retire fully; to enjoy the rest of their life in comfort. 

That is the group that I chose to follow,  and I am on-track to stop working by the time I turn 45 years old.

 

Here is how you achieve elite retirement: 

     1. Invest in yourself

Traditional retirement is structured as a sunk cost. Every year you lose a lot of money to get a little money. It was designed for people with short lifespans at a time when companies invested in their employees. That is not the world we live in today.

Modern retirement success requires you to invest in yourself. Some people do this by building a business (like EverydaySpy.com), learning an income-generating skill like stock or currency trading, or by investing in start-up opportunities that yield returns well above traditional investments.

All three of these options allow you to take control of your own retirement investment. And because you are the one most interested in your retirement, it is in your best interest to be both the investor and the investment. 

 

     2. Manage your own money

When someone else manages your money, it costs you money. You are also fully exposed to taxes because the IRS considers you an economic drain. But when you manage your own money the IRS sees you as an economic stimulus. And they give you tax breaks.

Opening your own LLC or Sole-Proprietorship gives you multiple options to decrease your taxable income while simultaneously building your net worth. There is a reason business owners pay less taxes than full-time employees. It pays to manage your money through a business.

Some of the most successful retirees I know left the workforce early (and comfortably!) because they learned how to manage their own investments. They learned from reputable trading coaches like my friend Rob Booker and belong to trading communities like Wealth Press. They have total control of their retirement portfolio, maximize their earnings, and travel the world. 

 

     3. Paradise abroad

For those uncertain about building a business or learning new money skills, there is still hope! 

Social security and retirement income can be extended by as much as 300% when you live abroad. That means the same retirement fund that lasts 5 years in the USA can last 15 years or more in locations like Costa Rica or Thailand. 

I know what life is like in the middle of a Virginia winter. I also know what it’s like to walk the white sand beaches of Thailand and Indonesia, forgetting when you last wore shoes. 

 

My plan is to spend my sunset years catching beachfront sunshine.

I hope to see you there…

Godspeed, #EverydaySpy

Author: Andrew Bustamante, Founder of www.EverydaySpy.com. Andrew is a former covert CIA Intelligence officer, decorated US Air Force Combat Veteran, and respected Fortune 500 senior advisor. Learn more from Andrew on his Podcast (The Everyday Espionage Podcast) and by following @EverydaySpy on your favorite social media platform.

3 Comments

  1. Nocturnal

    August 21, 2019 at 1:58 pm

    Join the conversation on Discord!

    https://discordapp.com/invite/NwZm6BD

  2. Joel I Bustamante

    August 27, 2019 at 3:36 pm

    Great article. I belong to a generation that lacked in financial education. I never gave retirement a thought until it was too late. “Do what you love and you’ll never work another day in your life” I loved what I did, still do, but (wuda, shuda, couda) thinking of retirement was not part of the fun.
    Andy is on the right track and I’m glad. Me, I will do the best I can with the options I have, and keep learning and improving… and keep listening to Andy.

    • Andrew Bustamante

      August 27, 2019 at 5:06 pm

      Thanks for sharing a bit of your personal story, Joel! I feel like most people only talk about the good choices they make, not the real choices. Thanks for making your retirement real to everyone who reads this…