How much you need depends on which kind of work-optional you want: about six months of spending to leave your job, around $60,000 for a year off, $144,000 for three years of chosen work, roughly $1 million to work only for extras and $1.6 to $2 million or more to never work again, using the video’s example budgets. You might enjoy your job a lot more if you knew you could leave it. A request to work another weekend would be easier to push back on, and a better opportunity would not have to come with a bigger salary.
The video breaks making work optional into five stages, each with its own price tag. The figures below are illustrations built on a $4,000 monthly spending level, not advice, so swap in your own numbers.
Watch the full video here, or skip to the breakdown below.
The 5 stages at a glance
- Stage 1: Enough to leave your job (0:15)
- Stage 2: Enough to take a year off (2:05)
- Stage 3: Enough to choose your work (3:51)
- Stage 4: Enough to work for the extras (6:52)
- Stage 5: Enough to never work again (9:06)
Stage 1: Enough to leave your job
The first amount buys time to find another way to earn. You still expect to work, but you can leave before your next employer has agreed to hire you. If you have ever stayed somewhere because you could not afford the gap between paychecks, you know how much that would change the conversation. When a manager cancels your plans again or a client keeps adding unpaid work, you can push back without wondering how you will cover next month’s rent.
Suppose your actual spending is $4,000 a month, including bills that only show up occasionally. If six months is enough for your search, that is $24,000 plus a separate allowance for unexpected costs. Six months is only an example. A switch to another industry, a senior role with few openings or a family on one income can all justify more time. Use what you would spend after leaving, including benefits you might need to replace such as health coverage.
Count only money you can access without depending on the stock market being in a good mood the week you resign. Money you expect to spend in the next few months is better kept safe and accessible, and you can keep building longer-term investments alongside this fund. You also do not need to quit for saving it to pay off. You could negotiate better conditions and stay, or wait for an opportunity you would actually be excited about.
At this stage, keeping the job becomes a decision you can revisit.
Stage 2: Enough to take a year off
This is the year in Asia, the long road trip or the time for everything that never fits into two weeks of annual leave. If your employer will not hold your position open, it means leaving the job and finding another one later.
The trip is only part of what needs funding. Coming home can mean a rental deposit, replacing things you sold before leaving and covering several months before a new paycheck arrives. Save only enough for the year away and the last months can turn into a job search from whichever place you were supposed to be enjoying. So the target has to cover the whole period until you are earning again.
Suppose the trip costs $30,000 including flights and insurance. Add $24,000 for six months back home at that $4,000 level, plus $6,000 for settling in and surprises. The target is now $60,000, and it rises if you still pay rent, a mortgage or other commitments while away. Those six months at home belong to the return plan, so they are not available to extend the trip.
The same method works for a year spent caring for someone, studying or simply resting. The activities and costs change, but a period after the break still needs paying for. You are also pausing earnings and possibly retirement contributions for a year, which can be a happy trade as long as you do not spend money you need for a later goal.
Having somewhere to come back to matters almost as much as being able to leave.
Stage 3: Enough to choose your work
Here you want to spend your time making something, learning a different profession or doing work that matters to you. The difficulty is that your interest does not guarantee anyone will pay enough for it right away. Perhaps you want to write a book, make a game or build a business from something you have only worked on in the evenings. Six months could vanish while you are still learning what you are doing. A longer period lets you produce work, get honest feedback and improve before every decision has to solve this month’s bills.
Three years is one possible planning window, though no amount of time guarantees a project works. At $4,000 a month, three years with no income comes to $144,000 at today’s prices. The project needs its own budget on top, along with allowances for rising costs and a reserve for what comes afterward. Your living money cannot also buy equipment or pay a developer.
If your work starts earning, the math improves. An average of $1,000 a month left after business costs and taxes cuts what you need from savings to $3,000 a month, or $108,000 over three years instead of $144,000. But income that has started arriving is very different from income you hope will arrive once you have more time, so until you have evidence the plan needs to survive the less flattering version.
Decide before you begin how much you are willing to spend. After two years it is tempting to believe another six months will finally make it work. Sometimes it will, but the money to return to paid work should not depend on being right. Set a point to take stock with enough savings left to change direction comfortably, or consider working part-time to give the project longer.
This stage gives meaningful work a chance to become viable, but it is still a period you are funding.
Stage 4: Enough to work for the extras
At this stage your assets are meant to support the ordinary cost of living over the long term, and work pays for the things you would like to add. Think about the difference between accepting a project because rent is due and accepting it because you want a particularly good holiday. You can turn down the second and still have somewhere to live.
To put a number on it, separate essential spending from the rest. Suppose housing, food, health coverage, basic transport and an allowance for ordinary repairs come to $2,500 a month, or $30,000 a year. Using a 3% starting withdrawal from a diversified portfolio, you would need about $1 million to provide that before tax. This is where the amounts jump, because the money must now support you for decades instead of funding a few years while you build something else.
That 3% is a planning assumption, not a guaranteed interest payment. Income may come from dividends and interest plus some investment sales, and the plan has to allow for taxes, investment costs and changing markets. Once the basics and the tax bill are funded, the remaining $1,500 a month of the $4,000 lifestyle could come from work. That may leave room for a shorter week, a handful of projects or enjoyable work that does not pay enough to support a household alone.
Be realistic about what counts as an extra. A home repair you keep postponing is still a cost of owning the home, and replacing a car you depend on does not become optional because it is infrequent. The baseline should describe an ordinary life you could actually maintain, and you would still review it when markets or expenses change.
If that life already suits you, this might be the stage where you choose to stay.
Stage 5: Enough to never work again
Now the plan must fund the full life you want, including the things you enjoy, without depending on another year of earnings. If you leave work early, the money may need to last forty or fifty years. That is why multiplying expenses by twenty-five, the familiar 4% rule, deserves more scrutiny here. Morningstar’s research using its 2025 assumptions estimated a 3.3% starting withdrawal for forty years, falling to 2.9% for fifty. It used a portfolio with 40% in stocks and 60% in fixed income and tested whether it could keep paying inflation-adjusted withdrawals in 90% of simulated outcomes, so even then the plan did not work in every scenario. Fidelity also uses about 3% as a rough starting guideline for early retirement.
At 3%, a life costing $48,000 a year points to roughly $1.6 million invested before taxes and fees. At $60,000 a year, the same math gives $2 million, and a fifty-year retirement at 2.9% would need a little more. These are estimates in current money and rely on investments available to fund spending. The home you live in can reduce housing costs, but counting its full value requires a plan to release that money while keeping a roof over your head. A pension can lower what your investments must provide once it starts, though the years before still need funding, and money in retirement accounts may have withdrawal restrictions.
Portfolio size is only part of whether the plan works. If a $1.6 million portfolio falls by a quarter, it leaves $1.2 million before withdrawals, and the same $48,000 would now be 4% of the reduced balance. Investments sold to cover expenses also miss any later recovery, which is why difficult markets early in retirement deserve particular attention. Reserves and a willingness to cut optional spending help, but no percentage removes the need to monitor the plan. The 3% sets the first year’s withdrawal, and later dollar amounts rise with inflation.
Test the final number against the life you actually plan to live. For a few months while still earning, try living on the budget you think is enough. Notice what you left out and what you keep wanting to add back, including things you would do more often if you were not at work all week.
It is much easier to adjust the plan while a paycheck is still coming in.
Pick the change you actually want
You may find that fully retiring takes more money than you expected. You may also find that the change you want most is already available at an earlier stage, because being able to leave, take a year away or choose different work can each be worth pursuing on its own. Choose the next change you actually want, work out its full cost and give that amount a place in your savings plan.
FAQ
How much money do you need to stop working?
It depends on the stage. In the video’s $4,000-a-month example: $24,000 to leave a job with six months of search time, about $1 million to cover $30,000 of essentials, and roughly $1.6 million to $2 million to never work again at 3%.
Is the 4% rule enough for early retirement?
The video says it deserves more scrutiny for retiring early. Morningstar’s research using its 2025 assumptions estimated 3.3% for forty years and 2.9% for fifty, and Fidelity uses about 3% as a rough starting guideline.
How much should I save before quitting my job?
Enough to cover your real spending, including occasional bills and benefits such as health coverage, for as long as your search might take. Six months at $4,000 a month is $24,000 plus an allowance for surprises.
How much do you need to take a year off work?
The target has to include the year itself and the period until you are earning again. In the example, a $30,000 trip plus $24,000 for six months back home and $6,000 for settling in gives $60,000.
What happens if the market falls early in retirement?
A fall early on matters most because investments sold to cover expenses miss the later recovery. Reserves and cutting optional spending help, but the plan still needs monitoring.
Keep reading
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- New Money & Old Money: 15 Differences
- 11 Celebrities That Have Too Much Money To Spend
