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How much money can you survive without working?

In that case, Gardner recommends following what he calls the “25 Times Rule.” “It's very simple,” he said. “You multiply your annual spending by 25, and that's the minimum amount of money you would need invested to fund your lifestyle without working.”

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Thinking of quitting your job to find a better one, start a new business or retire early? If so, you’re in good company. According to data from the Bureau of Labor Statistics, over 47 million American workers voluntarily left their jobs in 2021.

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But before you follow suit, it’s important to make sure you have enough money in your emergency fund. To determine exactly how much someone should save before leaving their job, GOBankingRates spoke with two financial experts — here’s what they recommend.

Save Enough To Live On for 6 to 12 Months

The most important step in preparing to quit your job is to make a plan, according to Tom Siomades, CFA, chief investment officer of AE Wealth Management. “Be disciplined,” he said. “This is something you have control over–you weren’t fired or laid off, so you don’t need to scramble. Plan ahead, envision the opportunity you want for yourself, think things through, and make good choices. The next move you make should be what you want and not something that you settle for, which will force you to start looking all over again.” To begin crafting your plan, decide how much money you want to have in savings before you turn in your two weeks’ notice. After all, you’ll need finances to fall back on to pay your bills while you search for a new job or grow your business. “I suggest having at least 12 months’ worth of living expenses in a liquid savings account to be on the safe side,” said Mark S. Gardner, CSSCS, president of wealth management company Retire Well Dallas. “Unfortunately, not everyone is in this position.” What if saving that much isn’t feasible for you? You can quit with less in your savings account if your expenses are fairly low and stable. “I would say you need a minimum of six months, depending on how specialized your skill is,” Siomades said. “You could land a new position quickly and the savings would be a nice little self-awarded signing bonus. If the timing is not right, it may take a while, so plan accordingly.”

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Follow the ’25 Times Rule’ If You Want To Live Off Your Investments

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If you’re not expecting to earn additional income anytime soon after quitting your job, you may be considering living off your investments. In that case, Gardner recommends following what he calls the “25 Times Rule.” “It’s very simple,” he said. “You multiply your annual spending by 25, and that’s the minimum amount of money you would need invested to fund your lifestyle without working.”

Start Being Disciplined With Your Money Now

Saving a year’s worth of living expenses isn’t easy–and neither is investing enough to live off the interest. To get there faster, financial experts recommend being as disciplined as possible with your finances even before you quit your job. “Start behaving like you are already in between jobs,” Siomades said. “Your focus will sharpen if you treat every situation as if you do not have a paycheck coming in the next two weeks. Figure out the absolute minimum you would need to have in order to pay your bills and obligations. Any discretionary income should be saved–no vacations, extravagant shopping, or dining.”

Keep Investing During Your Transition

If you think money will be especially tight after you quit, you may wonder if you should put a hold on your investing. But doing so will only harm you in the long run. “You’d only be cutting corners with your future self,” Siomades said. “Don’t shortchange your retirement or plans. The markets never sleep, and neither should your future plans.” But what if you can’t afford to lose the money you’re investing? If you’re concerned about risk, Gardner recommends focusing on long-term, conservative investments during your transition. “One needs to have balance in life and that also goes for their financial personal investing,” he said. “You need to have your money always working for you rather than you working for it. Safe money investments are okay–annuities, REITs (Real Estate Investment Trusts), dividends, treasuries, and so on. Consider a Backdoor Roth IRA conversion now through the end of 2025.”