What is Coast FIRE?

Coast FIRE in one sentence

Coast FIRE is the point where you have enough invested that, without adding another dollar, growth alone will reach your full retirement number by the age you want to retire. From then on, your paycheck only has to cover today's bills. You're still working, but you're no longer working to save for later.

Where Coast FIRE fits in FIRE

FIRE stands for Financial Independence, Retire Early. You reach full FIRE when your investments can pay for your spending forever, so work becomes optional. Getting there usually means years of saving a large share of your income.

Coast FIRE is a milestone on the way. The common versions are:

• Full FIRE: investments cover all your spending. You can stop working.
• Coast FIRE: investments will cover all your spending by retirement age with no more saving. You work to pay today's bills.
• Barista FIRE: investments cover part of your spending now and part-time work covers the rest. See Coast FIRE vs Barista FIRE.
• Lean and Fat FIRE: full FIRE on a frugal or a generous budget.

The appeal of Coast FIRE is that it arrives much sooner than full FIRE, and it changes how work feels. Once you're coasting, you can take a lower-paid job you enjoy more, cut your hours, or simply spend the money you used to save.

The two numbers behind it

1. Your FIRE number is how much you need invested on the day you retire. The usual rule of thumb divides your yearly spending by a safe withdrawal rate, often 4%:

2. Your coast number is how much you need invested today for compound growth to turn it into your FIRE number by retirement. It works the FIRE number backwards using your expected return after inflation (the real return):

Here a 7% return with 2.5% inflation gives a real return of 4.39% a year, and there are 28 years until retirement. Working in today's money matters: your $40,000 of spending is in today's dollars, so the return has to be after inflation too.

Once your investments are worth more than your coast number, you've reached Coast FIRE. The Coast FIRE number calculator works this out for any age and spending level.

A worked example

Meet Alex. Alex is 32, wants to retire at 60 and expects to spend $40,000 a year in today's money. Alex has $185,000 invested and adds $1,500 a month.

• FIRE number: $40,000 ÷ 4% = $1,000,000.
• Coast number today: $300,277. Alex has $185,000, so Alex isn't there yet.
• Coast date: the coast number shrinks every year as retirement gets closer, while Alex's portfolio grows from returns and contributions. They meet in 7 years 7 months, when Alex is 39 and has about $417,000 invested.
• After that: if Alex stops contributing and returns average 4.39% after inflation, the portfolio grows to about $1,003,000 by 60, in today's money.

From 39 on, Alex no longer needs to save $18,000 a year for retirement. That money can go to a career change, shorter hours, travel or anything else.

Coast FIRE number by age

The younger you are, the less you need, because your money has longer to grow. This table uses $40,000 of yearly spending, a 4% withdrawal rate, 7% returns and 2.5% inflation, in today's money.

Spending a different amount? Scale the table. At $60,000 a year, multiply by 1.5. Working five more years has the same effect as being five years younger, which is why each amount in the "retire at 65" column matches the "retire at 60" amount one row up.

What moves your coast date

Small changes in your assumptions move the coast date by years. Starting from Alex's 7 years 7 months:

The biggest levers are the ones that change your real return: a 1% fee does as much damage as a 1% drop in returns. Choosing low-cost funds is one of the few parts of the plan you fully control.

How sure can you be?

The coast date assumes your investments earn the average return every single year. Real markets jump around, and the order of good and bad years matters.

To show this, our calculator runs 1,000 simulated markets with realistic yearly swings. For Alex, stopping exactly on the coast date reaches $1,000,000 by 60 in about 50% of them. That's not a flaw in the plan. It's what "average return" means: half of outcomes do better, half do worse.

You can improve the odds a lot without giving up the idea:

• Save a little longer. Three more years of contributions lifts Alex's odds to 57%. Never stopping before 60 lifts them to 78%.
• Use a cautious return. Planning with 6% instead of 7% builds in a margin.
• Check in once a year. If markets have done badly, save a bit again for a while. If they've done well, you may be able to coast sooner.
• Stay flexible. Being willing to work a year or two longer, or spend a little less in retirement, is a powerful safety net.

Our methodology page explains exactly how the simulation works.

Life after you hit Coast FIRE

Coasting doesn't mean doing nothing. It means your job only has to pay for your current life. People use that freedom to:

• move to lower-stress or more meaningful work, even if it pays less;
• work four days a week, freelance, or take a sabbatical;
• start a business without worrying about retirement;
• spend more on their family, home or travel now.

Keep an emergency fund. Once you stop saving, a job loss or big expense has to be covered by cash, not by your retirement investments. If you want to start drawing on your investments before retirement, that's Barista FIRE, which needs a larger portfolio.

Pros and cons

Pros

• Arrives years or decades before full FIRE.
• Frees up the money you were saving, without touching your investments.
• Gives you options at work long before you can quit.

Cons

• You still need an income that covers all of today's spending.
• It depends on long-run returns. A weak decade can push your date back.
• Lifestyle creep is easy once the saving stops, and higher spending raises your FIRE number.

Common mistakes

• Mixing today's money and future money. If your spending is in today's dollars, use a return after inflation.
• Ignoring fees. As the table above shows, a 1% fee can cost about seven years.
• Forgetting taxes. Your retirement spending should include the tax you'll pay on withdrawals.
• Double-counting pensions. Subtract the Social Security, CPP or State Pension you expect from your spending, rather than adding it to your portfolio.
• Counting your home. Your house only helps if you plan to sell or downsize it. Otherwise, leave it out.