I have tried to setup authentication to my smtp server (mail.mojezoopraha.cz:25) to send email through mail client. But when I try to authenticate using local server account, mail.log return

ERROR: 535: 5.7.8 Error: authentication failed: UGFzc3dvcmQ6

I have edited following config files:

/etc/postfix/main.cf

smtpd_sasl_auth_enable = yes
smtpd_sasl_type = dovecot
smtpd_sasl_security_options = noanonymous
smtpd_sasl_path = private/auth
broken_sasl_auth_clients = yes

/etc/dovecot/conf.d/10-auth.conf

auth_mechanisms = plain login
disable_plaintext_auth = no

/etc/dovecot/conf.d/10-master.conf

service auth {
  unix_listener /var/spool/postfix/private/auth {
    mode = 0660
    user = postfix
    group = postfix
  }
}

Did I forget to configure something? I saw other option to create account to authenticate with, but I dont fully understand which one to use in my case. My guess is, that I need to link somewhere database of users, but I dont know how.

I tried reinstalling postfix, dovecot and sasl. I even tried to create sasl account using:
saslpasswd2 -c -u

When I tried
testsaslauthd -u [email protected] -p ****
I get
connect() : No such file or directory

TLS is setup and tested using online tools like checktls.