The Power of Having a Million Dollars in the Bank When You Get Laid Off
Most people never know what it feels like to lose a job and still sleep soundly that night. When the email lands or a surprise meeting appears on the calendar, panic usually sets in. But for someone with a million dollars sitting in the bank, the story plays out very differently.
In 2025, a 33-year-old software engineer learned this firsthand. He was snowboarding in Japan when the layoff notice came through. The otherwise financial disaster instead turned into a moment of calm and control.
Across the U.S., millions of workers faced layoffs in 2024, according to the Bureau of Labor Statistics. For most, losing a job triggers an immediate scramble—checking health insurance, filing for unemployment, worrying about rent, and cutting expenses. But when you have real savings, the experience changes entirely. The anxiety loses its grip.
The Shock Feels Different When You’re Financially Ready
Image via Getty Images/standret
The engineer’s severance covered 8.5 months of pay and extended health insurance. This level of support is rare for most Americans. Yet, what truly softened the fall was his portfolio, valued at over a million dollars and mostly invested in index funds like VTSAX.
It’s easier to stay calm knowing bills will still be paid and health coverage will continue. The next job decision can be made with care instead of fear. He took time to focus on therapy, volunteering, and reassessing his priorities.
He described his approach as “coastFIRE,” a version of financial independence where investments grow steadily with minimal effort, thus allowing him to work only for fulfillment. His new job paid around $158,000 compared to the $287,000 he earned at his former employer, but the trade-off was said to be worth it. His savings gave him freedom to pursue peace of mind instead of chasing the next pay raise.
Why A Million Changes the Equation
Having a million dollars in investments removes the constant sense of urgency. With a balanced portfolio earning about 7% annually, that nest egg can double in roughly a decade without a single extra deposit.
To put it in perspective, a full-time worker earning $80,000 a year typically pays around 15–20% in taxes, depending on location and deductions. Meanwhile, long-term investment gains are often taxed at lower rates, which gives investors a distinct advantage once the steady paycheck stops.
Most Workers Don’t Get That Option
Image via Getty Images/4×6
For most households, losing a job sets off a chain reaction. Severance packages aren’t guaranteed, health insurance coverage often ends, and retirement accounts require attention.
Many people spend their first days after a layoff dealing with COBRA paperwork or checking if their state covers 26 weeks of unemployment. A large portion of Americans worry about layoffs and lack sufficient savings to cover even a few months of expenses.
Common financial advice includes updating your résumé, requesting a layoff letter, reviewing your benefits, and taking care of your mental health.
The Mental Game of Money and Work
Money doesn’t erase stress, but it changes how people respond to it. The Reddit engineer admitted that losing his job was unsettling, even with seven figures invested. Years of defining identity through work don’t disappear overnight.
Time away from the grind gave him perspective, though. Wealth, he realized, buys time to think. This outlook reflects what financial independence thinkers have emphasized for years. Wealth should serve life, not the other way around.