Retiring on a bitcoin standard
Navigating the glidepath in an AI-Driven future
Well, well, well. It seems my subscriber base has exploded lately, with a staggering increase of two whole readers. I'm practically a bitcoin influencer now, so it's high time I share some updated thoughts on using bitcoin as your primary retirement tool.
If you've been stacking sats, good on you. But if you haven't, fear not – it's not too late to join the party. As Michael Saylor recently pointed out, by 2034, 99% of all bitcoin will have been mined. This is like the gold rush of our generation, folks, and with the tailwinds of institutional investment and ETF approvals, it's looking like it might make sense to get some in case it catches on.
This time period also represents a potentially precarious period for knowledge workers, with AI likely to cause a pretty big disruption to jobs. The capabilities of AI tools keep accelerating at an exponential rate and knowledge work could look drastically different in 5 years from now. Makes sense to me that you’d want to be stacking a digitally scarce asset in a digitally abundant world.
Now, the million-dollar question (or should I say, the 1 BTC question?): how much bitcoin do you actually need to retire comfortably? It seems to be a topic of discussion that has been popular on twitter (yes, I’m still calling it twitter) recently with some different thoughts on the matter circulating.
A simple framework made sense to me posted by ChartsBTC:
https://x.com/ChartsBtc/status/1782392018301505652
The logic here is that with an initial withdrawal rate of 0.05 btc, you’d have 20 years of runway to fund your lifestyle. Sure, the thought of relying on magic internet money for retirement might make you break out in a cold sweat, but as adoption grows and bitcoin appreciates, you'll likely need to sell less than 0.05 BTC each year. So, if your annual expenses are $90k, you're looking at a $1.8m bitcoin price as the price you’d need.
Of course, there's always the risk of a bitcoin bear market rearing its ugly head right as you retire. If bitcoin takes a 50% nosedive in your first year of retirement, you might have to sell 0.1 BTC just to keep the lights on. That might be a tough pill to swallow to draw down 10% of your retirement stack right when you start that journey.
Another useful framework I recently came across is the retirement calculator posted by @bitcoinhornet. You can check it out at bitcoincompounding.com.
The calculator offers a range of models based on different assumptions about Bitcoin's future growth rate. Some are more aggressive, others more conservative, but all provide a roadmap for thinking about how much bitcoin you might need to accumulate to fund a comfortable retirement.
The default Model 6, for example, strikes a balance between reasonable short-term price targets and a more conservative long-term growth trajectory. It's an imperfect tool, of course, but it's a starting point for thinking about bitcoin in the context of retirement planning.
I’m still ideating on how I plan to use bitcoin as my primary retirement tool. I’ve previously discussed the Bitcoin Glidepath and how I plan to periodically sell off some bitcoin holdings to enrich my quality of life as I approach retirement. A certain portion of my stack is off-limits for the long haul and won’t dip into that until I exit or step back from the workforce.
But no matter how much I sell along the way, I'll always be buying more. The period from 2024 to 2034 represents an incredible opportunity to accumulate bitcoin before the last 1% of bitcoin is mined. With institutional adoption ramping up and the potential for AI to disrupt traditional employment, bitcoin represents a uniquely powerful tool for securing your financial future.
So, as you chart your own path to retirement in the coming years, don't be afraid to put bitcoin at the center of your strategy. Embrace the volatility, have a plan for enriching your life along the way, and never stop stacking sats. The future may be uncertain, but with bitcoin as your foundation, you'll be well-positioned to weather whatever storms may come.
And who knows? With a little bit of luck and a lot of hodling, you might just be able to retire on 1 BTC after all.