How Much Money You Need to Stop Working: Breaking Down Real FIRE Scenarios

There's no magic number that guarantees a worry-free life without a job — it all comes down to your desired spending and how much you're able to set aside each month. That's the conclusion reached by Lukáš Nádvorník, an investment blogger and Czech financial literacy ambassador who has achieved financial independence himself and shared his calculations on the Ve vatě podcast.

Where to start the calculation

Rather than immediately guessing how many millions you need to save, the expert suggests working backwards — first figuring out how much you actually spend in a year. That means not just monthly expenses, but also holidays, Christmas, renovations, and other one-off costs. According to Nádvorník, this figure usually turns out to be much higher than people initially assume — and it's easy enough to check nowadays thanks to online banking.

At the same time, you should subtract expenses that will disappear once you stop working (like your commute), but add new ones — since you'll have more free time, and people generally want to spend at least some of it on themselves rather than filling every hour with volunteering or side jobs.

How much a couple needs if they want to stop working entirely

The podcast built a model calculation for a couple who want to quit working altogether and live on 80,000 crowns a month combined, in today's prices. If the couple isn't willing to adjust their withdrawals based on market conditions, they'd need to save more than 27 million crowns.

If the couple is fine with working part-time, around 14 million crowns would be enough, while a four-day work week would require roughly 5.5 million crowns. If they're willing to temporarily cut spending during bad years for the markets, the required sum drops further: down to 21.5 million crowns for full retirement, 11 million for part-time work, and just over four million for a four-day week.

The four percent rule

To avoid running out of money too soon, financially independent people typically rely on the so-called four percent rule: withdrawing roughly 4% of the portfolio each year while letting the rest keep growing. But for those who plan to leave the workforce at, say, 40, the time horizon without income is far longer than for a typical retiree — so Nádvorník recommends aiming for a range of 3.5–4.5%, depending on strategy, portfolio diversification, investment currency and market conditions.

He notes that every percentage point paid in fees lowers the safe withdrawal rate by half a percentage point. According to the expert, the biggest mistake people make isn't running out of money — it's over-saving: people scrimp for years and end up with far more than they actually need, even though the point of financial independence isn't to maximize your final nest egg, but to live more freely.

How much you need to save each month

The podcast also modeled how long it would take to reach the target sum at different monthly contribution levels. The calculation is based on a portfolio of 80% stocks and 20% bonds with low fees of around 0.3%.

For example, someone starting from zero who saves 10,000 crowns a month and wants to eventually draw 20,000 crowns a month in today's prices would need to invest for about 23 years. That means someone who starts saving at 25 could achieve financial independence before turning 50. According to Nádvorník, saving 10,000 crowns a month is realistic even on an average salary — surveys show the average Czech can save more than 6,000 crowns a month, and contributions should be increased each year in line with inflation.

How starting capital speeds things up

Having some starting capital significantly shortens the path. If someone already has 1 million crowns and invests 10,000 crowns a month aiming for a 20,000-crown monthly income, the timeline drops from 23 to 16 years. With three million crowns to start, seven years is enough, and with five million, just one year.

Your own home can also count toward your financial independence capital — but not entirely. If you plan to live in your current flat for the rest of your life, its value doesn't count directly, though the money you save on rent works in your favor. But if you're planning to downsize later in life, you can factor in the price difference between your current home and the smaller one you'd move into.

Read also: Rental scams in Prague: how to spot a con

Around Prague, based on reporting by seznamzpravy.cz