An emergency fund and a severance package are great things for keeping the lights on while you look for a new role, but the point is that $200k + $200k in bonuses and RSUs is a hard thing to replace when all the other big tech companies are also laying people off and going on hiring freezes. You're probably going to end up taking a serious pay cut in you next role. Even if you have a full year of your old salary in the bank, you might well find it hard to maintain you previous lifestyle, pay your mortgage, or replace your emergency fund if you have to live on it.

Four months severance is only good if you find another good role within four months. And in the current tech market I wouldn't bet on that.

Something else to consider - if there are a ton of engineers entering the market who are willing to take a pay cut what impact will that have on everyone else in the market? This sort of thing is what drives everyone's wages down.

Definitely agree. With a caveat, though. Tech companies will not want to have a massive diff in comp between the people they keep and the (few, selected) people they re-hire. So we might be entering a downward trend, but it will be slow.

It might be too late for some people, but some general advice - if you earn 400k USD / year, don't develop a habit of depending on this kind of income.

The rest of the world and even your fellow (US) citizens have to get by on much, much less.

These kind of salaries are not at all normal. I would advice you to not live your life as if you'd be able to make almost half a million per year for the rest of your life.

So save most of it and live a normal lifestyle. If the good income continues, simply retire early :-)

Indeed. “Lifestyle inflation” is never a good thing.

If you replied with this you don't understand the difference between income, expenses and savings.

Your lifestyle has to do with your expenses. You can have savings and a sizable emergency fund but if you don't find a job that pays you as much or lower your lifestyle.

I fully understand it, I just keep my expenses significantly lower than my income.

Raising lifestyle to match your salary is a hedonistic treadmill.

Well, not all people are as rational as you.