I want to retire early as a millionaire, so I asked financial planners for 3 passive income streams I should be thinking about right now

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• I know I'll need passive income to support myself if I want to retire early.
• I asked financial planners who work with millionaires which passive income streams are most lucrative.
• They said I should look into rental properties and strategic business investments for cash flow.

As someone who didn't take planning for retirement seriously until I turned 30, I've found myself playing catch-up. Not only am I contributing to my SEP IRA retirement account on a monthly basis, but I'm also always searching for additional ways to build my net worth so I can retire early as a millionaire.

If I am able to achieve that goal, I want to ensure that when I retire, I have passive income coming in to support my lifestyle and cover my bills.

In an effort to learn how current retired millionaires bring in money without working full-time, I asked financial professionals to share how their clients earn passive income. Here are the three most common ways.

1. Rental and investment properties

There are a lot of perks that come with having an investment property. That's why financial planner Darren Colananni says it's one of the most common passive income streams among millionaires.

Colananni says that having homes that are rented out year-round, or the majority of the year, can provide not only a stream of steady income but can also have tax benefits.

Colananni says, "You can get a tax deduction on the rental income by depreciating the property," which means deducting the cost of buying or improving a rental property.

You can also use any expenses (including your mortgage, utilities, normal repairs, etc.) to help offset your rental-property income by deducting this from your own personal tax obligations.

"This means that some portion of the income is coming to you tax-free while you continue to build equity in the property," he says.

2. Social Security, collected strategically

A passive income stream that most American workers get when they retire, Social Security is one that millionaires also bank on, according to financial planner Scott Sturgeon. He says that while Social Security is a common income stream, there's an ideal timeline for starting those payments.

"Social Security planning can get surprisingly complicated," says Sturgeon. "For my clients, I run various analyses to determine when the optimal time to start those payments might be based on their specific financial situation."

While you can start receiving your Social Security retirement benefits at 62, if you wait to take payments until you reach age 70, the amount you receive will increase.

This won't help me if I retire early, but I can count on it later in life.

3. Investing in a business

Even once his millionaire clients stop working full-time and retire, financial advisor Brian See has noticed that they're still involved in businesses as investors.

See says clients invest in businesses in many different ways, from investing in start-ups to providing a company with a capital infusion.

"Investing in these businesses gives you ownership in a company with an opportunity to possibly access royalties, profit sharing, or the opportunity to sell the businesses for capital gains at a potential future date," says See.

This article was originally published in May 2022.