What is Coast FIRE?
Coast FIRE is a financial independence milestone where your current savings, invested and left to grow through compound interest, will be enough to fund your retirement by your target age. Once you reach Coast FIRE, you only need to earn enough to cover your current living expenses, no additional retirement saving required.
Unlike traditional FIRE, where you need the full amount saved, Coast FIRE lets you relax your savings rate significantly. You can choose lower-stress work, reduce hours, or pursue passion projects knowing your retirement is already funded by compound growth.
How Coast FIRE Works
The formula uses compound interest to calculate your Coast FIRE number, the minimum savings needed today so compound growth alone reaches your retirement target:
Coast FIRE Number = FIRE Target / (1 + r)^n
Where r = annual return rate, n = years until retirement
Example
If you are 30, plan to retire at 65, have $50,000 saved, spend $40,000/year, and expect 7% returns: Your FIRE target is $1,000,000 (25x expenses). Your current $50,000 will grow to approximately $533,800 by age 65. Your Coast FIRE number is about $93,600, meaning you need about $43,600 more in savings to coast to retirement.
The 4% Rule and Withdrawal Rates
The Coast FIRE calculator uses the withdrawal rate rule. At 4%, you need 25x expenses. At 3%, you need 33x. At 5%, you need 20x.
| Rate | Multiplier | For 0K Expenses |
|---|---|---|
| 3% (Conservative) | 33.3x | ,333,333 |
| 4% (Standard) | 25.0x | ,000,000 |
| 5% (Aggressive) | 20.0x | 00,000 |
The 4% rule, based on the Trinity Study, has historically supported 30-year retirements. For longer retirements, use 3-3.5%.
Coast FIRE vs Barista FIRE vs Lean FIRE
- Coast FIRE: Current savings compound to cover retirement. No additional saving required.
- Barista FIRE: Supplement part-time income with portfolio withdrawals.
- Lean FIRE: Retire on a smaller portfolio with lower expenses.
- Regular FIRE: Full amount saved, retire immediately.
Coast FIRE Number by Age
For someone retiring at 65 with 0K expenses (4% rule, 7% return):
| Age | Years | Coast FIRE Number |
|---|---|---|
| 25 | 40 | 6,780 |
| 30 | 35 | 3,663 |
| 35 | 30 | 31,353 |
| 40 | 25 | 84,287 |
| 45 | 20 | 59,124 |
| 50 | 15 | 64,098 |
Starting earlier dramatically reduces your Coast FIRE number. A 25-year-old needs only 6,780 while a 50-year-old needs 64,098.
Risks and Assumptions to Consider
Coast FIRE relies on several assumptions. Understanding these risks helps you plan more conservatively:
- Return assumption risk: Markets don't return 7% every year. Some years are +25%, others -20%. The safe withdrawal rate accounts for this variance.
- No dollar-cost averaging: Once you stop contributing, you lose the benefit of buying more shares when prices drop.
- Expenses change: Healthcare, housing, and lifestyle changes can alter your retirement expenses significantly.
- Inflation risk: This calculator uses nominal returns. Higher-than-expected inflation reduces purchasing power.
- Healthcare before Medicare: Retiring before 65 requires funding health insurance (,000-0,000+/year).
Common Coast FIRE Mistakes
- Using nominal instead of real returns: 7% nominal minus 3% inflation = 4% real. Adjust your expectations accordingly.
- Underestimating retirement expenses: Many retirees spend more in the first 5-10 years (travel, hobbies) before settling into a lower pattern.
- Ignoring healthcare costs: Health insurance before Medicare (age 65) can cost ,000-0,000+/year.
- Not accounting for Social Security: If you expect SS income, your FIRE target may be lower, but requires careful planning around claiming age.
- Setting retirement age too optimistically: Plan for flexibility. Market downturns near retirement can delay your timeline.