Hi,
I am a 33-year-old that is actively saving and building toward a passive income stream enabling me to either retire early or shift to a nonprofit career instead of my current job in tech. I have about $200,000 in taxable investment accounts, $120,000 in liquid savings, and own my home with a $240,000 mortgage and about $300,000 in equity. My 401(k) and Roth are both maxed each year and have a combined value of $70,000 right now. I currently make around $120,000 a year, and my long-term partner adds about $40,000 to shared income, but we are not married and file separately. I have a dividend portfolio providing $5,000 a year in passive income, with a goal of growing that to $15,000 in the next few years. I want to achieve financial independence by 40, which I am currently defining as more than $20,000 in passive income and my mortgage paid off. I also have some chronic health issues that require regular and expensive medical care — a gold or platinum plan under the ACA is essential. My question is: how do you advise calculating the passive income needed for early retirement, in my 40s instead of 60s? What asset level would be considered “safe”? I expect to have some income after leaving tech, whether from consulting or nonprofit work, but want to be effective in securing my passive streams.
Appreciate any input, and thank you!
– A curious investor
“Retirement is about income, not assets,” said David D’Eredita, founder and investment adviser with Rise Private Wealth Advisors. He suggests mapping out your core living expenses and lifestyle expenses (you may have to use estimates as you aren’t planning to make this change for another seven years) and then making a…
By: Alessandra Malito | Published: Aug 16, 2021
