- We consulted Brian Fry, a certified financial planner and the founder of Safe Landing Financial , to run a simulation that estimates the lump sum an investor would need the day they retire to live on a target annual income of $100,000 a year or $65,000 a year, after investment income taxes.
- Although many early retirees continue to earn money after leaving their 9-to-5, these figures represent the minimum investment balance you would need to leave work and never turn back.
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Early retirement is having a major moment. Whether you're 25 or 55, there's a heightened allure to turning in your time card and exiting the corporate world for good.
But how much money does it really take to leave your 9-to-5 and never look back? It depends on several factors, including your lifestyle and how your money is invested, but generally you'll need millions.
To figure out how much money someone would need to have invested when they retire in order to live comfortably on investment income until age 90, we consulted Brian Fry, a certified financial planner and the founder of Safe Landing Financial .
It's worth noting that many early retirees continue to earn income after leaving their 9-to-5, whether through real-estate investing , blogging, or some other monetizable hobby, not to mention Social Security income for older retirees. The distinction, for many, is that in retiring from corporate life, they're free to create their own schedule and pursue the projects they're most passionate about without worrying about earning a paycheck.
Fry used a Monte Carlo simulation to estimate the starting balance someone would need in a taxable investment account the day they leave work to live on either $100,000 a year or $65,000 a year in dividends (fixed income from bond investments) and capital gains (income from equity investments), after paying taxes.