Tools: Coast FIRE: The Tech Worker's AI Layoff Hedge

Why AI Layoffs Make Coast FIRE Urgent ## Coast FIRE Math at $150K, $250K, and $400K ## Five Steps to Calculate and Act ## The Gotchas Worth Knowing ## Key Takeaway With 37% of companies planning AI-driven cuts, here is the math that makes your retirement layoff-proof. Sixty percent of organizations have already made or are planning headcount reductions tied to AI, according to a Harvard Business Review survey of 1,006 global executives. Here is the uncomfortable part: only 2% of those cuts are based on what AI can actually do today. The rest are bets on what it might do tomorrow. If you are a senior software engineer earning $250K and watching your company hire an "AI strategy lead," the rational move is not to panic. It is to do math. Coast FIRE is reaching a savings threshold where compound growth alone will fund your retirement at a traditional age, without another dollar contributed. The formula is straightforward: take your target retirement nest egg, then divide it by (1 + your expected annual return) raised to the power of years until retirement. Once you hit that number, you can stop saving for retirement entirely and work only to cover current expenses. This matters for tech workers right now because the AI-driven layoff wave is targeting a specific demographic. A Resume.org survey of 1,000 U.S. business leaders found that 37% of companies expect to have replaced jobs with AI by the end of 2026. High-salary employees rank among the highest-risk groups. That is not entry-level attrition. That is senior engineers, staff engineers, and engineering managers whose compensation makes them obvious targets for AI-augmented headcount math. The broader numbers reinforce the trend. U.S. employers announced 108,435 layoffs in January 2026 alone, up 118% year-over-year and the highest January figure since 2009. In tech specifically, 37,478 workers have been impacted across 60 layoff events so far in 2026. A Mercer report found employee concerns about AI-related job loss jumped from 28% in 2024 to 40% in 2026. Coast FIRE does not eliminate career risk. What it does is decouple your retirement security from your employment status. If you get laid off at 38 and your portfolio is already at your coast number, the job search becomes a question of lifestyle, not survival. Calculating a coast number for a tech salary household requires three inputs: your target retirement spending, your current age, and your assumed real rate of return. The standard assumptions are a 4% safe withdrawal rate (from the Trinity Study), 7% nominal returns, and roughly 3% inflation, yielding about 4% real growth. Here is how the numbers shake out for three common tech salary bands, assuming a target retirement age of 65 and annual retirement spending of 60% of current gross income. At $150K total compensation (target: $90K/year, $2.25M nest egg): At $250K total compensation (target: $150K/year, $3.75M nest egg): At $400K total compensation (target: $240K/year, $6M nest egg): The gap between the $150K and $400K bands is where the planning gets interesting. A senior engineer at a FAANG company earning $400K has a much higher coast target, but also the income to reach it faster. A mid-level engineer at $150K has a lower target but tighter margins. Both face the same displacement risk. Notice the age sensitivity. Every five years of delay increases the coast number by roughly 20-25% at each band. This strategy works best for people in their late twenties and early thirties. They have 30+ years of compounding ahead but are the least likely to feel urgency about retirement planning. Step 1: Define your retirement spending. Be honest about geography and lifestyle. If you live in the Bay Area and plan to stay, use Bay Area numbers. A common starting point is 50-70% of current gross income, adjusted for whether your mortgage will be paid off. Most tech workers underestimate this number on the first pass. Step 2: Calculate your target nest egg. Divide annual retirement spending by 0.04 (the 4% rule) or 0.033 (a more conservative 3% rule). A $40K annual spend requires $1M. A $100K spend requires $2.5M. Step 3: Run the coast FIRE formula. Divide your target nest egg by (1.04)^(years until 65). Use a coast FIRE number calculator to model different scenarios. Adjust the return rate between 4% and 6% real to stress-test your assumptions. Step 4: Compare to your current invested assets. Count only investments: 401(k), IRA, brokerage accounts, HSA. Not your house. Not unvested RSUs. Unvested stock depends on continued employment, which is exactly the variable you are hedging against. Step 5: Close the gap aggressively. If you are $200K short of your coast number, that means 18-24 months of maximizing every tax-advantaged account and living well below your means. Max your 401(k) at $24,500, your backdoor Roth IRA at $7,500, and your HSA at $4,400. Dump the rest into a taxable brokerage in low-cost index funds. The window of high tech earnings and maximum compound growth overlap. Use both while they last. Coast FIRE has real limitations that proponents tend to understate. The 4% rule assumes a 30-year retirement. If you coast at 35 and retire at 65, you need that portfolio to last until 95 or beyond. A 3.5% withdrawal rate is safer but requires a proportionally larger nest egg. Market returns are averages. A prolonged bear market during your coasting years can blow up the math. Sequence-of-returns risk does not disappear just because you stopped contributing. Healthcare is the gap nobody wants to budget for. If you downshift to a lower-paying role after hitting your coast number, you lose employer-sponsored insurance years before Medicare eligibility at 65. ACA marketplace plans for a family of four can run $1,500-$2,500 per month depending on your state and income level. That alone can consume a significant portion of a lower coast-phase salary. The "coast" phase itself requires income. You still need to cover rent or mortgage, food, insurance, and taxes from active work. In high-cost cities, that floor is $80K-$100K annually, which limits the kinds of roles you can actually downshift into. And there is a quiet irony here: the people best positioned to reach coast FIRE quickly are the same high-earners that AI-driven layoffs are targeting first. The strategy works precisely because tech salaries are high enough to front-load decades of compound growth. But those salaries exist partly because the work was hard to automate. Calculate your coast FIRE number this week using a coast FIRE calculator and your actual spending data. If you are a tech worker earning $150K or more, there is a specific dollar amount that makes your retirement independent of your job's survival. Find that number, measure the gap, and close it while your current compensation still lets you. The math does not care about your feelings toward AI. It just compounds. Templates let you quickly answer FAQs or store snippets for re-use. Are you sure you want to hide this comment? It will become hidden in your post, but will still be visible via the comment's permalink. Hide child comments as well For further actions, you may consider blocking this person and/or reporting abuse - Age 30: Coast number is $570K. Aggressive but reachable in 5-7 years of focused saving at a 40%+ savings rate. - Age 35: Coast number is $694K. - Age 40: Coast number is $844K. - Age 30: Coast number is $950K. This requires significant early-career saving but is achievable for dual-income tech households. - Age 35: Coast number is $1.16M. - Age 40: Coast number is $1.41M. - Age 30: Coast number is $1.52M. - Age 35: Coast number is $1.85M. - Age 40: Coast number is $2.25M.