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How Much Money Would You Need to Never Work again?



Amount of money needed to never have to work again

Picture what it would be like to be rich right now and for the rest of your life, never having to work again. That’s a recurrent dream for millions of people who have been working since college or high school.

Although we’re sure you know that this scenario is hard to reach, we believe this is a dream worth following: achieving financial freedom even if you don’t become rich.

Not having to work ever again is truly doable, as long as you put in the effort and implement the right strategies. Surely, you will need a clearly defined budget, create additional sources of income, and more. By reading this article, you are already headed in the right direction.

To know how much money you need to never work again, we will first calculate how much you need to live. Having that number, we will see how hard it is to reach it through some of the most common investments. Finally, we will give you some ideas on how this can be executed and how to make that transition.

How Much Money Do You Need per Year?

Several considerations must be made in order to calculate what your living expenses would be if not working. For example, different states will have different budget requirements.

An average family of four needs almost $90,000 a year to make a living in New York. In other states, you can get by with as little as $60,000. In fact, a lot of people live in New York or San Francisco with less than $14,000 a year.


Of course, this will depend on what type of life you want to live. To make matters simple, we will assume you need $75,000 to sustain your economy. This may not be enough for a big family in an expensive city, but is plenty for a single person. In some of the cheapest zones to live in, this amount of money will give you a safe margin.

Let’s go over some of the main expenses that will probably have to be fitted into your budget.

Knowing what the largest expenses are in your budget is key for your economic sustainability. Depending on your lifestyle you can reduce or exclude a few of them, but make sure to consider them all. Let’s list some of the main ones and see a few examples!


Housing probably can’t be avoided unless you own a home. In a year, most Americans will spend over $10,000 in this category.

Buying a house is surely something to consider once you have enough capital. Houses usually go from $150,000 to $600,000 depending on the area. This will largely depend on what type of house you want.


Being a homeowner is often better in many ways. Your budget will be simplified and not having to pay rent helps in making your life easier each month.


You will definitely need to eat if you plan to live more than a few weeks… And let’s face it, food isn’t cheap either, the average American spends over $2,600 on food each year.

Keep in mind eating out tends to be more expensive than cooking your own food. If you quit your job, you may enjoy cooking after getting that free time. Nothing tastes better than a meal made with your own hands.

takeout food

However, Americans often spend nearly half of their food budget on eating out.

This is also highly dependent on your preferences and taste, and you will be able to adjust periodically.


Each person in the US spends about $9,000 in transportation throughout the year. Owning a vehicle can be expensive and involves several fixed charges.

Of course, a large part of that is spent on going to work, so your actual expenditure may vary. Once you are unemployed you can avoid this completely or spend even more if you want to travel a lot.


In general, cycling is fast and cheap, and motorbikes are cheaper than cars in many ways. Public transportation is also something to consider, especially if you don’t move around a lot.

Health Care

Health care represents about $3,600 each year for the average American. This is an expensive but extremely necessary category. You should keep in mind people often rely on their employers to cover part of their health insurance.

Therefore, being jobless means you have to pay for your insurance in full. This can represent from $270 up to $650 a month. In total, you can expect to pay between $3,240 and $7,800 each year for health insurance.

pills and money

The more you can reserve for health care, the better. Having access to good specialists and treatments is invaluable and can represent huge improvements in quality of life.

Costs have risen in this category during the last few decades, but medical technology has improved hugely. You will want modern medicine serving you, and you can be sure we all need it eventually.


Representing about 12% of total yearly spending and sometimes, even more, taxes are important to consider. Investing in a good accountant is always a good idea, and will save money and hassles in the long run.

Is overtime taxed more

Having a specialist going over your numbers should be considered an investment and not a loss. Make sure you find a professional that is familiar with the type of income and spending you have. Taxes will vary greatly depending on those factors, so it’s hard to make predictions here.

How Much Money Would You Need to Live From Investment Profits?

Surely, with enough money, you could live the rest of your life without an income. However, if you plan to live more than a couple of decades the best strategy is to invest. We will go over several options and describe each. Then we will calculate how much money you need to never work again by profiting from investments.

Remember, these are just some examples to show an approximation. They will help you calculate how much money you need to never work again. You will have to do a bit of research to see how each one applies to your own life and financial planning.

High Yield Savings Accounts

Savings accounts slowly pay interest to account owners, but this rate is extremely small. In fact, the national APY average for savings accounts is around 0.07%. This means you would receive $7 for every $10,000 you put in one of those accounts.


High yield accounts can do a lot better though, reaching an APY of nearly 0.60% in some cases. Following the above example, one of these accounts could pay back nearly $60 by the end of the first year.

As you’re probably thinking, these numbers will not be enough unless you have a huge starting fund. To make $75,000 a year through savings accounts, you would need over $12 million. That makes them one of the least convenient investments, so we better move on to more profitable alternatives.

Certificate of Deposits

Certificate of Deposits (CDs) are products offered by banks and credit unions, among other financial institutions. They pay interest rates to customers who leave a deposit untouched for a predetermined time frame. The longer the agreed duration of the deposit, the better the APY.

It’s important to ask around and see which offers are available. To give you an idea about the returns, a 5-year term deposit can have an APY above 0.8%. Some CDs can even reach 1% in annual returns.

certificate of deposit

That means that you can make $75,000 a year by putting $7.5 million as the initial investment. While not bad as a secure method to earn from your money, some investments tend to pay better.

Stock Market Investments

Investing in the stock market always comes to mind when we think about putting money to work. This is a popular way to invest among people of all economic classes for good reason.

Dividend aristocrats are stock issuers that have consistently increased dividend yield and have big market capitalization. Some of them are 3M, AT&T, Caterpillar, Chevron, Coca-Cola, and ExxonMobil, and can give dividend yields of over 7%.

However, you should diversify your investments and that will result in an APY that is closer to the average. Depending on the sector in which you prefer to invest, you will see annual yields between 2 and 5%. This is very good when compared to savings accounts.

stock index

To get a sense of how much it is, consider an investment of between $1.5 and $3.8 million. With that much money, you could get nearly $75,000 in returns each year.

The main downside of investing in the stock market is how unpredictable it is, meaning you can lose money. Nobody can say for sure what’s going to happen in the future, so you have to plan appropriately. Not only are your earnings not assured, but your assets can also lose value as well.

Real Estate Investment Trusts

Real Estate Investment Trusts, also known as REITs, are companies involved in generating income from real estate. In a similar way to mutual funds, these make a pool of investor money allowing participants to receive profits.

These trusts invest in almost all real estate property types, including apartment buildings, data centers, hotels, offices, and several more.

Many REITs are publicly traded, meaning you can buy and sell them like stocks. This is good to maintain liquidity in your portfolio.


The best part of these trusts is that they provide a steady income to shareholders. And it’s a sizable amount, nearly 10% during the last decade. In fact, between 2017 and 2020 it did better than the S&P 500. The S&P 500 is one of the leading indexes in the stock market.

A very good option, REITs could generate $75,000 in returns for a $750,000 investment. That is huge and is enough to consider this investment category a must.

Cryptocurrency Staking

While cryptocurrencies are some of the most volatile assets out there, they can provide serious earnings. A well-managed portfolio should avoid putting more than 5% in crypto, but the yield can be quite good.

While there are many ways to profit from cryptocurrencies, we are going to list one of the easiest ones, called staking.

Staking was designed as a way to replace conventional ‘mining’ of cryptocurrencies, as in Bitcoin mining. This operation requires users to lock some of their funds to help keep the network alive.

what is cryptocurrency

This helps maintain the blockchain up and running by validating transactions. When taking part in this process, those who ‘stake’ their coins receive corresponding profits.

Several cryptocurrencies support staking, and returns vary greatly. In general, you can expect around 5 to 8% in annual returns, and sometimes much more. This means you could live off earnings if you stack crypto for $930,000 is worth, getting about $75,000 each year.

When to Quit Your Job?

Quitting your 9 to 5 job is a personal and potentially difficult decision. It requires a lot of security and economic stability to stay relaxed about your income. Whatever your reason, leaving a position can be a great decision. If it makes you feel happier, healthier, or better aligned with your goals and values it’s worth considering. But it can be challenging of course.

Usually, you will be expecting some kind of progress in your careers such as pay raises, promotions, or other benefits. Getting more responsibilities and new experiences can be gratifying too.

checking the time

Regardless of when you intend to quit, you should already have a working budget and some ongoing investments. Once you know the value of those assets you own, you can calculate possible returns. This will give you an idea of whether you can live off those investments, or how much financial freedom you really have.

In any case, if you have an accountant you can trust you should run this idea through him. It would also be smart to check with your boss, family members, and friends. They might have a broader picture of the situation and can give some ideas.


The answer to the question of how much money do you need to never work again is it depends. Many factors have to be considered and may play a big role in this, so make sure to plan carefully.

In this case, we decided to make some assumptions. We’re going to assume you need to live off a $75,000 yearly income. While this can seem like a lot of money, you should always try to be on the safe side. No type of investment is completely safe, and most of them have unpredictable returns.

Considering a safely balanced portfolio with a 3.75% annual return, you can meet a $75,000 yearly income. You would need $2 million to reach that, which is quite some money. In case you wondered if you just spent the money instead of investing it would last about 26 years. That results from starting with $2 million and spending $75,000 each year.

Many people spend much less than that, however. If you feel you could comfortably live off $45,000 a year, $1.2 million can get you there. That is a high number but can be reached through hard work and good fund management.

Obviously, your portfolio should change and adapt, and it has to always consider risks. In reality, all investments can have a bad year or even several bad years. That means we should always compromise some earnings in favor of stability.

Putting all of your money on the stock market, for example, can leave you hanging and end up in big losses.

While we have already listed some investment options, you can consider many more alternatives. As such, we recommend you check out our investing section to learn more about how to improve your profit.

Now that you have an idea of what it takes for you never to work again, go out there and start working on it!

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