I'm 31/M/Single approaching a total net worth of 2 million? Is that enough to retire early?

Hi anon,

It all depends on your income streams should you bite the bullet and decide to FIRE.

In the end the key is that your assets must produce income for you.

Your income streams need to meet your basic expenses at the minimum; seeing your comments on other answers, it looks like you need about $3K/mth at this point in time. I emphasize that because inflation will creep in over the years and that $3k/mth will easily be $4K/mth in 10-15 years.

You need to look at what income producing assets you have. Can they meet this $3K/mth income requirement of yours? How much of that income stream is secure, and how much is at risk? (Just look at how the banks have cut dividends last year) And more importantly, FIRE would imply that you must continue to have income streams that not only give you reliable, predictable income, but that this income stream must, at a minimum, grow and match inflation.

Now, a $1.3M portfolio, conservatively, will generate $52/yr of income at 4% yield. You could take the excess $26K (since you only need $36K/yr) and re-invest it into the markets, or top up CPF, etc, depending on your needs. I'd say do a mixture of both, not just because you are preparing to get a flat in a few year's time, but also because CPF should be your foundation in retirement. However, do note that re-investing it would mean that you have to really watch over your investments well.

As you approach your 50s and 60s, you'd probably want to liquidate the riskier investments in your portfolio, and eventually when CPF LIFE starts to payout, you might want to fall back on that for the majority of your income then, along with a few other streams of income such as private annuities, bonds and some stocks.

The numbers will really depend on many factors and my answer is beginning to turn into an essay, so sit down and really crunch the numbers. Don't rule out working part time or starting a side hustle in your 40s if you need to prop up your portfolio.

Don't retire early. Just switch to a job that you really enjoy. If you're challenged at your job, passionate about it AND you have the financial means to not worry if you get retrenched while you're at it - you'll really enjoy yourself.

Think of that one thing you always wanted to be when you grew up. Or think of your hobby and find a way to monetise it.