Older tech workers are tapping out early. Here’s what that looks like

Steve Otteson wasn’t planning to retire.

The 55-year-old software engineer had been working at Microsoft for almost three decades, and he figured he still had a few more years in him.

Then, this spring, the tech company made him a surprising offer: Quit and get nine months of pay.

Suddenly, Otteson found himself confronted with the choice to retire early. He took the buyout the day before the decision deadline.

“In some ways it was fortunate,” he said. “It was a really good timing.”

Tech employers like Microsoft have been vigorously slashing their workforces since late 2022. Mass layoffs have disrupted the career trajectories of thousands.

Rather than trying to hang on, some older workers are tapping out.

“It’s happening at scale and has been for a while now,” said Kevin Estes, a financial adviser on the Eastside and founder of Scaled Finance. “It’s almost always on tech workers’ minds. Many people, even if they don’t get laid off, are reevaluating whether or not they could stop.”

Seattle-area workers nearing retirement cite a range of reasons for leaving the workforce early. They’re demoralized or burnt out,or skeptical about artificial intelligence. They suspect ageism in hiring, or they wanted to try something completely new. They wanted more time with family or hobbies or just themselves. For those who can afford it, retirement – at least from the 9-to-5 – is often the best way forward.

There’s no standard age of retirement in the U.S.

Workers can begin taking Social Security at 62, though doing so locks them into significantly lower monthly payments compared to those who start at 66 or later. People are also not eligible for Medicare, the public health insurance program for older adults, until age 65.

That means people who leave the job market before 65 often must cover high costs of living while also trying to conserve money for their later years.

Some have set aside enough money from long tech careers that they can pull it off. Others are finding that the decision comes with compromise, frugality and even difficult choices like leaving Seattle.

Life beyond work

For decades, careers in the tech industry have been defined by high compensation, including both strong pay and valuable stock options. That means tech workers generally find themselves in a solid financial position at a younger age compared to those in other sectors.

“The nice thing about tech, which is different from a lot of jobs people have, is that the compensation has been pretty good for a long time,” said Steve McConnell, a financial adviser in Bellevue and founder of Rain Dog Financial. “So a lot of people, if they’re getting an early retirement offer in their mid-50s or later, a lot of them are in pretty good shape.”

Workers who’ve long received company equity as part of their compensation also benefit from gains in the stock market. In the last five years alone, Microsoft’s stock price has risen over 40% at the time of publication. Amazon’s increased close to 37%.

Jorge Morales, 58, and his wife worked in tech for most of their careers before retiring last year, him from Oracle and her from Microsoft.

A few years ago, the couple met with a financial adviser, who looked at their savings and investments and told them that they didn’t have to work anymore. It was a shock to Morales, who’d assumed he’d be working until 70.

“It’s the first time that we started having this conversation, to start thinking of maybe retiring,” he said. Morales used to love his work, especially mentoring junior engineers and solving problems. But since the pandemic, he found himself increasingly disconnected from his colleagues. “That made going to work really hard.”

Morales and his wife both held high-paying jobs. In their last roles, the couple earned a combined annual income of $400,000. But they also lived frugally, setting aside at least one of their salaries and all discretionary bonuses into savings. They don’t have children.

“I understand we were in an excellent position because we were in the golden age of tech,” he said. But Morales emphasized that it took discipline to put money away every paycheck instead of spending it.

That’s paying off now: The couple has enough money in savings and investment accounts that they can support their lifestyle for the next 40 years.

Morales spends his days reading The Seattle Times and The New York Times from cover to cover. His wife bought a piano and has been learning to play. The couple like to exercise, cook and walk around downtown Seattle. They also love to travel, and are currently planning a few trips, including a visit to their families in Colombia.

Saying bye to AI

Some workers say that the rapid rise of artificial intelligence has made the present moment a perfect time to call it quits.

In late June, John Stiehl, 58, retired from his job as the senior director of business development for an engineering company called Synapse.

Stiehl felt “enormous pressure” at work to become familiar with AI tools, as the company tried to figure out how to incorporate the technology internally and to embed it into products.

But after working for more than three decades, Stiehl didn’t feel motivated anymore to learn the ropes of a splashy new thing. So he decided to step down.

“Maybe it’s the time for me to let someone else navigate this,” Stiehl said in an interview one week before his last day of work. “I don’t know the direction that tech’s going in next, with how AI’s going to get utilized. I just didn’t need to continue to be a part of that.”

That’s a familiar sentiment for older tech workers, said McConnell, the financial adviser in Bellevue. He likened the onset of new technology to waves of technical innovation, from web to mobile to cloud programming. Each development comes with a steep learning curve; not everyone wants to catch the AI wave.

Stiehl credits his ability to retire early to a lot of good luck. He and his wife saved a lot of money early on and invested it in funds that have performed well over time.

“We were born at the right time, bought houses at the right time, invested at the right time,” he said.

The couple has two children, one who has moved out and another with special needs who they expect to live with for the foreseeable future.

While their kids were growing up, Stiehl’s wife worked part-time at the Seattle Children’s Foundation. Now she’s eager to work full-time again, an arrangement that will also provide the couple with health insurance coverage.

Stiehl’s looking forward to retirement. His retirement gift to himself was tickets to each of the six World Cup games in Seattle. This summer, he wants to spend a lot of time outdoors hiking and kayaking.

“Everything was just in order life-wise,” he said. “I’m not the least bit concerned about having enough to do in retirement.”

100 applications, no offers

Not everyone who retires early does so by choice.

David Bowers used to work in finance for a software company. He was laid off at the start of 2023, after his employer got acquired and his role was eliminated.

Then 58, Bowers quickly got to looking for work. He submitted more than 100 job applications over the next six months. Despite having close to 35 years of experience, he got just a single screening interview.

“Never in my career has it ever been like that for me, where I wasn’t getting any interviews at all,” he said. Bowers suspected that ageism played a role in his unsuccessful job search. In the Seattle area, workers across age groups say that they’re facing a competitive job market.

He began to feel resigned about his chances of working again. After exhausting his unemployment benefits, Bowers decided to retire. “I could have kept looking for work, but I thought it was probably a good time to stop.”

Bowers calculated that even without employment income, he and his wife would likely be able to afford their costs of living, which he ballparks around $8,000 per month.

He credits this to a lifetime of trying to live on half of his salary and investing in tech companies early on. Bowers’s wife retired around the same time as him. She previously worked as a nurse at Swedish Health Services, through which she has a pension.

Some of their expenses dipped in recent years. Their adult son now lives on his own. The couple also recently downsized from a house in Seattle’s Queen Anne neighborhood to a smaller, less expensive one in Magnolia.

Right now, Bowers is most concerned about the cost of healthcare. Because neither he nor his wife qualify for Medicare, they buy their own insurance through the state exchange. This year, the couple is paying $3,330 on medical and dental premiums each month for a Premera bronze plan. That monthly cost is a $1,000 jump from last year, due to the expiration of tax credits that previously subsidized the cost of premiums.

Their plan includes an $8,000 per person deductible, which the couple always meets.

Those costs will add up over time, Bowers said.

In the eight-year span of their early retirement – between the ages of 58 and 65 – he estimates that they will spend a quarter-million dollars on healthcare premiums and deductibles combined.

“We’re fortunate that we can afford it,” Bowers said. “It would be a hardship for anybody to pay that kind of money.”

Bowers and his wife regularly discuss going back to work, if only for health benefits. In fact, in an ideal world, Bowers would still be working right now. “The job I had was fine. I was working from home. We had healthcare,” he said. “I was going to just continue on doing that.”

Looking toward the future

Everyone’s early retirement story is different. Some people leave the workforce because they’re forced out and others because they want out. Some eventually start working again, out of boredom or passion or necessity. In general, the sparse data that exists about early retirement indicates that it’s not exactly uncommon.

In a recent survey of over 1,000 individuals who retired in 2026, nearly half of respondents reported retiring earlier than planned. The most common factors cited for early retirement included health problems, the ability to afford it and changes in the workplace.

“There are so many things that are out of employees’ control that affect when they retire, said Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute, which has conducted the survey for over three decades. “The job you anticipate working until retirement will not necessarily be there.”

Sometimes a lifetime of savings alone doesn’t cut it.

Otteson, the Microsoft employee who took the company’s voluntary buyout, is planning to leave King County to afford retirement.

“We feel like we’re getting priced out,” he said. Inflation has hit almost every aspect of life in King County, including insurance, property taxes, groceries and eating out. “Our money just doesn’t go as far as we used to.”

Otteson and his wife plan to sell their home in Redmond and move somewhere with lower costs of living, such as Vancouver, Wash., or Hillsboro, Ore. The couple’s three adult sons live with them, and the move will force them to start living independently.

Even as a retiree, Otteson wants to keep working in some capacity.

He has hobbies he wants to pursue more deeply, like 3D printing and LED lighting. He and his wife also have a long-held dream of writing a book together. The couple left The Church of Jesus Christ of Latter-day Saints a few years ago, and they want to write about their experience of stepping away from their faith community and eventually redefining their spirituality.

In other words, he’s not going to miss Microsoft.

“I know some people have an identity crisis, but I really don’t,” he said. “It’s been a good career, I’ve raised a family here, but there’s stuff I want to create on my own.”