Coast FIRE for Software Engineers and Tech Workers

A software engineer who starts saving hard in their late 20s can reach Coast FIRE around 35. What usually pushes that date later isn’t the income. It’s a retirement budget that grows with every promotion, a portfolio that’s mostly employer stock, and counting RSUs that haven’t vested as money you already have.

How fast can a software engineer reach Coast FIRE?

Take Nina. She’s 28, a software engineer with $90,000 in index funds and her 401(k), and she puts away $5,000 a month. That’s $60,000 a year, which on a tech salary is less heroic than it sounds: a full 401(k), a backdoor Roth IRA and some money in a brokerage account. She expects to spend $80,000 a year in retirement and wants to be done at 65.

Her FIRE number is $2,000,000. Her Coast FIRE number today is $488,436, and at her savings rate she crosses it at 35. After that she could stop contributing entirely and, at 7% returns and 3% inflation, the money grows to what she needs by 65.

That’s the upside of a tech income. Most people need 20 years of saving to get here. Nina needs less than eight.

What a bigger retirement budget costs you

The number that decides everything is the one Nina typed into the spending box. Tech incomes tend to pull that number up without anyone deciding it should go up: a nicer apartment, then a house in an expensive metro, then travel that assumes a senior salary. If that lifestyle is what she plans to fund in retirement, the target moves with it.

Going from $80,000 to $120,000 costs Nina six years of full-time saving, with the same salary and the same $5,000 a month. I’m not telling you to plan a frugal retirement. I’m saying the spending figure deserves more thought than the salary does. A mortgage that’s paid off by 65 and kids who are grown can take a lot out of today’s number, and every $10,000 you remove takes $250,000 off the FIRE number at a 4% withdrawal rate.

RSUs, ESPP and what counts as invested

RSUs are paid like salary

When an RSU vests and the shares are delivered, the value is taxed as ordinary income and shows up as wages on your W-2. The IRS’s equity compensation audit guide puts it plainly: RSUs generally aren’t taxable at grant, and the taxable event comes at vesting. Your cost basis in the shares is the value you were taxed on, so selling the day they vest creates little or no extra gain.

That makes selling at vest close to tax-neutral, and it’s what I’d do by default. Ask yourself whether you’d take a cash bonus of the same size and use all of it to buy your employer’s stock. If you wouldn’t, holding the vested shares is the same decision.

One tax trap to watch: employers often withhold federal tax on vests at the flat 22% rate for supplemental wages (IRS Publication 15). If your marginal rate is 32% or 35%, that leaves a bill in April. Set aside the difference or raise your withholding.

ESPP is usually worth doing, then selling

A qualified plan under Section 423 can sell you shares at up to a 15% discount, and some plans add a lookback that applies the discount to the lower of the price at the start or the end of the offering period. The law caps what you can buy at $25,000 a year, measured at the stock’s value when the option is granted. How the discount is taxed depends on how long you hold the shares, and Publication 525 walks through both cases. Buying at 85 cents on the dollar and selling soon after is one of the better deals in tech compensation. Buying and holding for years turns it into another bet on your employer.

Concentration is the real risk

Your paycheck, your health insurance and your unvested grants already depend on one company. Putting your savings in the same company doubles the bet. A bad year for your employer’s stock is often the same year it cuts jobs. I’d keep employer stock to a small slice of your net worth, 10% or less.

This matters for the calculator, too. Its 7% return assumes a diversified portfolio, so “invested today” should include only what you’d actually hold. Count unvested RSUs as zero. Say Nina also has $260,000 of unvested grants. If she adds them and enters $350,000, the calculator says she crosses the line at 30 instead of 35. That’s false comfort. Those grants can be forfeited if she leaves, and the vests are where much of her $5,000 a month comes from, so counting them now counts the same money twice.

Which accounts to fill on a tech salary

The usual order still applies: take the full employer match, then fill the tax-advantaged accounts before a brokerage account. Tech salaries just change which accounts are available.

The 401(k) employee limit for 2026 is $24,500. The bigger number is the total that can go into the plan from all sources, which is $72,000 for 2026 under section 415(c) (IRS Notice 2025-67). If your plan accepts after-tax contributions and lets you move them into the Roth side, the gap between those two numbers is the mega backdoor Roth. With your own $24,500 and $12,000 from your employer, that leaves $35,500 of after-tax room. The IRS lets plans offer in-plan Roth rollovers of after-tax money; you pay tax only on the earnings you convert, which is why people convert often. Plenty of plans don’t offer this, and many set a lower cap, so read your plan documents before counting on it.

A regular Roth IRA is out of reach on most tech salaries. For 2026, direct contributions phase out between $153,000 and $168,000 of modified AGI for single filers and $242,000 to $252,000 for married couples filing jointly (IRS). The backdoor route is a nondeductible $7,500 contribution to a traditional IRA, then a conversion to Roth.

The catch is the pro-rata rule. When you convert, the IRS looks at the combined value of all your traditional, SEP and SIMPLE IRAs on December 31 of that year (Form 8606 instructions). If you have $67,500 of pre-tax money in an old rollover IRA plus the new $7,500, only 10% of what you convert is tax-free. If your 401(k) accepts roll-ins, moving the old IRA there first usually clears the way.

For later: once you turn 50, catch-up contributions have to go in as Roth if your FICA wages from that employer topped $150,000 the year before. That’s the 2026 threshold in the same IRS notice, and plenty of engineers will be over it.

Why Coast FIRE helps when layoffs hit

Tech layoffs don’t care how good your performance review was. What Coast FIRE changes is what a layoff can do to you. Before you cross the line, losing your job means losing years of retirement progress. After it, your retirement is already funded if you leave the money alone, and your next job only has to cover what you spend now.

That opens options that aren’t available to someone still building the pile. Nina at 37, laid off after crossing her number at 35, could take a job paying half as much, go to a smaller company without equity, contract part-time, or take six months off. Good jobs for Coast FIRE are often the ones people in tech wouldn’t have considered at 30.

The one thing she shouldn’t do is pull from her 401(k) to bridge the gap. Withdrawals before 59½ usually come with a 10% additional tax on top of income tax, and every dollar out now has decades less to grow.

That’s what the emergency fund is for. I’d keep six months of current expenses at a minimum, and nine to twelve if your household runs on one tech income or has a big mortgage. Keep it in cash or something close to it, and don’t count employer stock or unvested RSUs toward it. Both tend to shrink at the moment you’d need them.

What if you want to stop at 40?

Then you’re not really doing Coast FIRE. You’re doing regular FIRE on a short timeline. Coast FIRE works because the money gets decades to grow untouched, and the earlier you want to stop, the less time there is.

If Nina moves her retirement age from 65 to 50, her Coast FIRE number jumps to $864,980 and she crosses it at 45. If she just kept saving until she had the full $2,000,000, she’d get there at 49. At a retirement age of 45 the calculator shows no coast point at all, because she can’t get there before 45 at this savings rate. The retire at 50 page runs these numbers by age and budget.

Early retirement also means buying your own health insurance for every year before Medicare at 65. Stop at 45 and that’s 20 years. Our post on health insurance before 65 covers what that costs and how Marketplace subsidies work on a lower income.

My own view is that for most people in tech, the best plan is to hit Coast FIRE in your 30s and then decide. You might keep the job and retire at 50. You might take a lower-stress role and work until 60. Either way you’ve stopped needing the next promotion, and that’s worth more than an exact retirement date.