I'm a Financial Planner: If You're a High Earner, You Need an 18-Month Safety Net

No job seems to be safe in this age of artificial intelligence, even white-collar ones. If you make a larger-than-usual salary, then you need to have a larger-than-usual emergency fund. Here's why.

By Mallon FitzPatrick, CFP®, AEP®, CLU®

published 29 November 2025

in Features

A piggy bank floats on a life preserver.

(Image credit: Getty Images)

Layoff notices used to be reserved for cyclical downturns, but recent years have proven that no salary level is safe. We've seen mass white-collar job cuts sweep through the once-bulletproof sectors of tech, finance and consulting.

If you're a high earner or affluent professional, you might feel a profound sense of whiplash. You've done everything right — you maximized your retirement savings, paid down your mortgage and watched your portfolio grow.

Yet, the threat of a "jobpocalypse" can still feel unsettling.

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The good news is that this anxiety is a signal to act, not panic. Your goal now isn't just to grow your money; it's to use that wealth to buy yourself optionality — the freedom to choose your next move, negotiate from strength or take the time you need to find the right next opportunity without financial stress.

A key lesson from this new era of job volatility is simple: Liquidity is your ultimate defense, and optionality is the ultimate luxury.

The 18-month rule: Your career gap insurance

For years, standard financial advice suggested keeping three to six months of expenses in an emergency fund. For high earners, that advice is woefully inadequate.

Think about it: Replacing a six-figure salary requires a specialized job search that takes time. Networking, interviews and due diligence can easily stretch beyond a year. That's why you need to upgrade your financial defenses.

The new gold standard for affluent families is the 18-month rule of fixed expenses.

This rule dictates setting aside 18 months of your non-negotiable costs — the expenses that keep the lights on and the family running smoothly.

What goes in your 18-month safety net?

Housing. Mortgage or rent payments, property taxes, HOA fees
Debt service. Car payments, student loan minimums, etc.
Insurance. Health, life, auto and home premiums
Non-negotiable family costs. Essential groceries, utilities and fixed costs like private tuition or necessary childcare

You should keep this capital in highly liquid, low-risk accounts — think high-yield savings accounts, money market funds or short-term Treasury ETFs.

This money is your career gap insurance, providing you with the peace of mind that you will not have to liquidate growth assets — like your stock portfolio — at a loss just to cover the rent.

Creating the financial eject button

Beyond holding cash, strategic planning requires creating immediate, low-cost access to capital that doesn't force you to sell your investments. We call this the financial eject button.

While we generally advise paying off high-interest consumer debt, not all debt is bad. Low-interest, tax-deductible debt, like your primary mortgage, is often efficient to carry.

However, the real strategic move is setting up a contingent source of liquidity while you are still employed and highly creditworthy.

Home equity line of credit (HELOC). If you have significant equity in your primary residence, a HELOC offers a flexible line of credit secured by your home. It's inexpensive to establish and costs you money only if you actually draw on it.
Pledged asset line (PAL). Offered by most brokerages, a PAL allows you to borrow against the value of your non-retirement investment portfolio.

The value of these facilities is simple: They are preapproved, ready to deploy and can provide immediate, non-taxable cash flow if your income stops.

Establishing these resources now ensures that you avoid the worst-case scenario: being forced to sell good, long-term investments into a declining or turbulent market just to cover an unexpected expense.

Your career is an asset: Reinvest in it

Just as you audit your investments, you must audit your career. With artificial intelligence rapidly transforming how work gets done, the durability of even highly compensated specialized roles is questionable.

You must treat your professional standing as a primary wealth-generating asset that requires continuous strategic reinvestment.

Ask yourself: Are your specialized skills complementary to AI or easily replaceable by it?

Make the "résumé refresh" a low-effort, year-round discipline. This means:

Networking. Make time for one meaningful professional conversation per month.
Upskilling. Identify new certifications or adjacent skills that make you adaptable.
Auditing. Periodically update your résumé, even if you're happy in your role.

Finally, remember that the true measure of your wealth is not your net worth, but your well-being. Your financial strength should empower you to trade a small amount of income for a dramatically increased balance and fulfillment.

The true value of your wealth plan is the confidence it grants you to say, "No, thank you" to a toxic environment or an unsustainable work pace.

By adopting the 18-month rule, establishing your financial eject button and continuously investing in your own adaptability, you move beyond merely surviving market changes.

You achieve the financial fortitude necessary to navigate whatever comes next — and do so entirely on your own terms.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Mallon FitzPatrick leads Robertson Stephens’ Wealth Planning Team and delivers comprehensive wealth planning solutions for high-net-worth and ultra-high-net-worth clients. He collaborates with clients to develop a strategy that integrates tax planning, risk management, philanthropy, liquidity and balance sheet management, estate planning and investments. Ultimately, the client is provided with a cohesive wealth plan that helps increase the likelihood of experiencing good outcomes, meets their objectives and aligns with their preferences.