When Can You Retire From Passive Income? (Regardless Of Your Current Retirement Accounts)



Have you been told you have to wait to be 65 to retire? That may be true if you stick to stocks and your 401(k) and IRA accounts, but in reality, many can retire much earlier with cash flow instead of having a lump sum account you’re racing towards. 

The first step is to determine how much passive income you need per year to maintain the lifestyle you want in retirement, for this example, let’s say you’d be comfortable with $50,000 in passive income per year (which means a lot more when earned through multifamily investing because of TAX BENEFITS). 

Our investments have multiple way of measuring return, one of those ways is called cash on cash return - how much cash you get per year for your investment. Averages range between 7 - 9%, so we’ll use 8% as an example. 

DISCLAIMER: Figures in this post are averages with average projections, please do not make any investment decisions based on this blog post alone. Please consult your financial professional of choice before making any financial decisions. This post does not act as a guarantee.

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Here's what an investment with an 8% cash on cash return and an average 18.37% total annual average return on investment would look like if you invested $100,000 to keep numbers round:

In this scenario, you're receiving $8,000 per year in passive income (not including tax benefits) with $90,500 in profit returned on top of your initial investment after 5 years.

If we're averaging 8% cash on cash return, that means once you hit $600,000 in invested money, you could retire with $48,000 per year in passive income; it seems like a lot, but let's fast track that course and see how fast the average America can get there after their first investment.

How Long Will It Take To Invest $600,000?

If the goal is to invest $600,000 in order to get $48,000 in passive income per year - an amount we're comfortable saying we could retire off of - then the question becomes: "how fast can I get $600,000 invested?". Well, if you reinvest your earnings every year (with a 5-year lifecycle per asset) and contribute just $7,270 per year to your investments (the average amount American's contribute to their retirement accounts: SOURCE) it would take you less than 15 years to accumulate over $50,000 per year in passive income.

In the beginning of your 15th year, you'd start generating $61,783 every year in passive income assuming you reinvest your earnings and contribute the average amount per year to your retirement ($7,270 per year).


Multifamily allows us to readjust the standard timeframe for retiring from 40+ years, down to just 15 years with these projections which are the average projections of multifamily assets. Want to find out exactly how long it would take you to retire with these projections? Let's jump on a 15-minute call and figure out your exact scenario.

*All figures are projections we've gathered from averages, and none are guarantees of performance.

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I connect smart investors like you to the very best multifamily investment opportunities available. I'm passionate about educating our investors in this space and helping you make the very best decision with your money.