US self-employed: Solo 401(k), IRA, buffer, or taxable?
For: US self-employed consultant (40), irregular income, deciding whether tax shelter, cash buffer, IRA, or taxable savings comes first
For a self-employed worker with uneven income, the right first dollar may be tax shelter, cash reserve, or taxable flexibility. Compare three funding routines.
For: Single US worker (32), renter, $45,000 student-loan balance, deciding whether to pay loans faster or capture the 401(k) match first
If your student loans feel urgent but your employer offers a 401(k) match, this scenario shows why the match can be hard to skip unless the debt is high-rate.
A layoff-focused Austin FIRE scenario that shows how severance, COBRA, and a lower next salary ripple through your retirement math.
You are 35, single, and were on a strong Austin tech savings track before a layoff forced a reset. Rent, health coverage, and job-search costs can still chew through several thousand dollars a month before the next paycheck arrives, even with Texas unemployment softening part of the hit. The real choice is whether to keep pushing for very early retirement immediately, accept a later timeline, or spend a few years rebuilding stability first.
This pack compares three realistic branches:
Keep FIRE push: assume a shorter gap, then return to aggressive saving and keep the age-55 target.
Reset timeline: model a longer search and a lower next salary, then rebuild toward a later retirement with less monthly pressure.
Rebuild first: prioritize cash stability and mental recovery, then step saving back up over time.
Everything runs in today’s dollars under cautious, base, and stronger long-run market assumptions so you can see how sensitive the plan is to markets versus lifestyle changes.
How to read this: Savings effort is the average monthly investing amount before retirement (after rent, health insurance, and other modeled costs). Planned spend is the retirement lifestyle used in the plan; Safe spend is the guard-railed amount that keeps a 60-month buffer. Capital at retirement and interest earned are in real dollars.
Path (Base return)
Savings effort (avg)
Retirement age
Planned / Safe spend
Retirement capital / interest earned
Keep FIRE push
$4,341
55
$6,200 / $6,895/mo
$1,828,406 / $582,726
Reset timeline
$3,227
58
$6,200 / $6,898/mo
$1,677,164 / $610,114
Rebuild first
$2,887
60
$5,300 / $6,191/mo
$1,767,331 / $695,231
What jumps out:
The Keep FIRE push path can still retire at 55 in the base case, but it asks for the highest savings pressure after re-employment. The table shows the payoff: a large retirement balance, visible compound growth, and a safe-spending buffer above the planned lifestyle. The stress case is the warning: weaker returns make the same lifestyle too tight.
Reset timeline gives up three years of early retirement to reduce the monthly savings load after the layoff. In the base case, that delay restores nearly the same safe-spending guardrail as the keep-FIRE path, but the weak-return case still needs a lower retirement budget.
Rebuild first is the gentlest recovery path. It works because the plan accepts a later retirement and a smaller planned lifestyle, then lets a longer compounding runway do more of the work.
Weaker-market stress adds realism: in the pessimistic runs, the planned $6,200/mo spend is too high in both the keep-FIRE and reset paths, while the rebuild path stays just inside the guardrail by planning around $5.3k/mo. In the optimistic runs, the upside is still healthy but no longer relies on leaving excessive end-of-life capital untouched.
Whether keeping an age-55 FIRE target after a layoff is worth the $1k+/month extra savings versus a slower, lower-stress rebuild.
How much of the gap is driven by returns vs lifestyle: weaker long-run markets shrink the spending guardrail meaningfully relative to the base case.
The cash-runway math: rent, health coverage, upskilling, and job-search costs can burn through tens of thousands before the next role starts, so the model shows how long your investments can carry that.
Gap modeling: each branch includes a period of elevated layoff spending, temporary full-price health coverage, partial unemployment support, and a severance cushion.
Healthcare transitions: COBRA runs for several months before Marketplace premiums or employer coverage take over, so the gap does not assume an instant return to subsidized benefits.
Savings ladders: the saving pace rebuilds at different speeds by age band, so you can see how much pressure each path puts on the recovery years.
Salary reset context: the faster recovery path assumes re-employment near the roughly $130k-$190k gross range from the research brief, while the reset and pivot paths fit closer to $100k-$150k and use employed savings rates around $2k-$5.5k/mo.
One-off shocks: all variants include car replacements, relocation costs, health deductibles, and later-life care reserves so the comparison doesn’t depend on unrealistically smooth decades.
Late-life surplus choices: the model does not assume every dollar left at 80 or 90 is spendable lifestyle money. Surplus branches include explicit choices such as care reserves, housing help for family, and charitable gifts. Treat those as editable goals, not costs every Austin renter should expect.
Retirement anchors: Social Security is treated as roughly $3,000/month from the late 60s, and the retirement budget assumes a fairly full Austin renter lifestyle rather than a lean FIRE target.
This is the highest-pressure version of the plan: a relatively short job gap, severance, and unemployment benefits bridge the shock. Once rehired, saving snaps back to an aggressive pace, and discretionary costs stay modest so the portfolio can keep compounding. The guardrail shows $6,895/mo of safe spend against a $6,200/mo plan, so there is still room to loosen the budget later - but only if you refill the emergency fund and keep contributions elevated once income stabilizes.
Here the job search lasts longer and you accept a smaller next salary plus a relocation. Savings recover gradually, and Marketplace healthcare premiums run longer. You retire at 58 instead of 55, which adds enough compounding to keep a $6,898/mo safe budget even though the spending plan sits at $6,200/mo. This path also treats the later condo-style aging-in-place move as cash leaving the portfolio, rather than home equity that shows up in ending capital. In a weak-return run, though, this path needs spending closer to $5,826/mo, so it works best for readers willing to trim later if the recovery stays bumpy.
This branch protects mental health and liquidity first: saving restarts modestly, side income helps bridge the recovery, and the plan only becomes more aggressive once work feels stable again. Retiring at 60 sounds like a concession, but the longer investing runway generates the $695k interest boost by retirement and still leaves a $6,191/mo safe budget versus the planned $5,300/mo. Even here, the pessimistic case supports only about $5,374/mo, so this is the most forgiving branch because it plans a smaller lifestyle from the start - not because it can ignore market risk.
Update the Social Security line with your latest SSA estimate or claiming age; a different benefit can shift safe monthly spending by hundreds.
Change the job-gap dates to match your severance, visa timeline, or expected re-employment date, then compare how the updated results change your safe monthly spending.
Adjust the savings age bands to mirror your actual income progression or bonus cadence; the guide on how to edit income and expense lines walks through updating age-based entries quickly.
If you’re new to the simulator’s metrics, start with Reading your results so terms like safe monthly spending and capital at retirement feel intuitive before you tweak values.
Texas unemployment insurance currently caps weekly benefits at $605 (~$2,620/mo). Model a lower figure if severance delays eligibility or if you expect contract work.
COBRA vs Marketplace: COBRA can run 102% of your prior premium (roughly $750-$800/mo in this persona). The scenario switches to Marketplace coverage once COBRA ends, but you should change the duration if you expect faster employer coverage or subsidy eligibility.
Retirement accounts aren’t frozen: payroll deferrals stop during unemployment, but the balances can roll into an IRA or solo 401(k). The presets assume you stay invested and avoid cash-outs.
Healthcare / rent shocks dominate the gap. If your rent is above the modeled Austin renter assumption or if you carry debt payments, add them explicitly; otherwise the model can overstate your margin.
This scenario is an educational model, not financial advice. It simplifies taxes, employer-plan rules, debt payoff, and healthcare eligibility so you can spot trade-offs before validating with official resources.