What is Coast FIRE?
Understanding Coast FIRE
Coast FIRE is a financial independence strategy where you accumulate enough savings that, through compound growth alone, will reach your retirement target without requiring additional contributions. The term “coast” refers to coasting to retirement—you’ve saved enough that your money can grow on its own while you work less demanding jobs or pursue passion projects.
Unlike traditional FIRE which requires accumulating 25-30 times your annual expenses, Coast FIRE requires a smaller initial amount since you have more time for compound growth to work its magic. This approach offers more flexibility in career choices and work-life balance while still ensuring financial security in retirement.
How Coast FIRE Works
The power of Coast FIRE lies in compound interest and time. When you reach your Coast FIRE number, your existing savings will grow to your full retirement target by your planned retirement age, assuming a reasonable rate of return (typically 7% annually).
For example, if you’re 30 years old with $100,000 saved and plan to retire at 65, that money will grow to approximately $1,068,000 over 35 years at 7% annual returns. This means you no longer need to aggressively save for retirement—you can “coast” by covering your living expenses while your investments grow.
The key assumptions are: a consistent rate of return, no withdrawals from your retirement savings, and reaching your Coast FIRE number before stopping contributions.
The Coast FIRE Formula
The Coast FIRE number is calculated using the compound interest formula in reverse, based on the 4% safe withdrawal rate established by the Trinity Study (1998). The formula is:
Coast FIRE Number = Target Retirement Fund ÷ (1 + Annual Return Rate)^Years Until Retirement
Your Target Retirement Fund is typically 25 times your expected annual expenses (based on the 4% withdrawal rule from the Trinity Study). For instance, if you need $50,000 per year in retirement, your target fund is $1,250,000.
If you’re 30 years old planning to retire at 65 (35 years), with a 7% return rate, your Coast FIRE number would be $1,250,000 ÷ (1.07)^35 = approximately $117,500. Once you reach this amount, you can stop saving for retirement and let compound growth do the rest.
Steps to Achieve Coast FIRE
1. Calculate Your Retirement Needs
Estimate your annual expenses in retirement. Consider healthcare, housing, food, transportation, and leisure activities. Multiply this by 25 to get your target retirement fund using the 4% rule.
2. Determine Your Coast FIRE Number
Use the Coast FIRE formula or our calculator to find how much you need today. Factor in your current age, planned retirement age, and expected investment returns.
3. Assess Your Current Position
Calculate the gap between your current savings and your Coast FIRE number. This tells you how much more you need to save before you can coast.
4. Create a Savings Plan
Develop a strategy to reach your Coast FIRE number. This might involve aggressive saving for a few years, increasing income, or optimizing expenses.
5. Monitor and Adjust
Regularly review your progress and adjust for market changes, lifestyle changes, or shifts in your retirement goals. Recalculate annually to stay on track.
6. Transition Your Career
Once you reach Coast FIRE, you can shift to lower-stress work, pursue passion projects, work part-time, or take career breaks knowing your retirement is secured.
Real-World Coast FIRE Examples
Example 1: Young Professional Starting Early
Sarah, 25 years old, Software Engineer
Situation:
Sarah earns $80,000 annually and lives frugally, saving 40% of her income. She expects to need $40,000 per year in retirement at age 65.
Calculation:
Target fund: $40,000 × 25 = $1,000,000. Years to retirement: 40 years. Coast FIRE number: $1,000,000 ÷ (1.07)^40 = $66,780. Current savings: $30,000.
Strategy:
Sarah needs to save an additional $36,780. At her current savings rate of $32,000/year, she'll reach Coast FIRE in just over 1 year.
Outcome:
By age 26, Sarah can reduce her savings rate dramatically, giving her freedom to travel, pursue hobbies, or even switch to a lower-paying but more fulfilling career while still retiring comfortably at 65.
Example 2: Mid-Career Couple Catching Up
Mike and Lisa, both 35 years old, Combined income $150,000
Situation:
They have $120,000 saved and want to retire at 60 with $60,000 annual expenses. They started saving late but are now focused.
Calculation:
Target fund: $60,000 × 25 = $1,500,000. Years to retirement: 25 years. Coast FIRE number: $1,500,000 ÷ (1.07)^25 = $276,000. Current savings: $120,000.
Strategy:
They need $156,000 more. Saving $40,000/year, they'll reach Coast FIRE in about 4 years by age 39.
Outcome:
After reaching Coast FIRE at 39, they can both shift to less demanding jobs, allowing more time with their children while their retirement remains on track. They might work part-time or pursue entrepreneurial ventures without financial pressure.
Example 3: High Earner Seeking Balance
David, 30 years old, Investment Banker earning $200,000
Situation:
David is burned out from his demanding job. He has $250,000 saved and wants to retire at 55 with $80,000 annual expenses.
Calculation:
Target fund: $80,000 × 25 = $2,000,000. Years to retirement: 25 years. Coast FIRE number: $2,000,000 ÷ (1.07)^25 = $368,000. Current savings: $250,000.
Strategy:
David needs only $118,000 more. With his high income, he could reach this in less than a year of focused saving.
Outcome:
David reaches Coast FIRE at 31 and immediately transitions to a lower-stress consulting role earning $80,000. He works fewer hours, enjoys better work-life balance, and his retirement is fully funded through compound growth.
Coast FIRE vs Other FIRE Strategies
| Type | Target Amount | Work Status | Best For |
|---|---|---|---|
| Coast FIRE | Lower (enough to grow to retirement goal) | Continue working, but with flexibility | Those seeking work-life balance and career flexibility |
| Traditional FIRE | High (25-30x annual expenses) | Fully retired, no work required | Those seeking complete financial independence |
| Barista FIRE | Medium (partial FIRE number) | Part-time work for expenses and benefits | Those wanting to semi-retire early |
| Lean FIRE | Low (minimal lifestyle) | Fully retired on minimal budget | Minimalists and frugal living enthusiasts |
Coast FIRE
Advantages:
- Lower savings target than traditional FIRE
- Career flexibility and reduced stress
- Can pursue passion projects or lower-paying work
- Retirement still secured through compound growth
Disadvantages:
- Must continue working to cover living expenses
- Dependent on market performance over long periods
- Less immediate freedom than traditional FIRE
- Requires discipline not to withdraw savings
Traditional FIRE
Advantages:
- Complete freedom from work
- Can retire much earlier
- Full control over time and lifestyle
- No dependence on future employment
Disadvantages:
- Requires aggressive saving for many years
- Very high savings target
- May sacrifice current lifestyle significantly
- Longer time to achieve goal
Barista FIRE
Advantages:
- Earlier than traditional FIRE
- Part-time work provides structure and benefits
- Lower savings requirement
- Gradual transition to retirement
Disadvantages:
- Still requires ongoing work
- Dependent on part-time employment availability
- May need to work longer than Coast FIRE
- Benefits depend on employer
Lean FIRE
Advantages:
- Achievable quickly with discipline
- Complete work freedom
- Forces intentional living
- Lower financial stress
Disadvantages:
- Very frugal lifestyle required
- Little room for unexpected expenses
- May be difficult to maintain long-term
- Limited lifestyle flexibility
Advantages and Disadvantages of Coast FIRE
Advantages
- Lower savings target makes it more achievable for most people
- Provides career flexibility—switch to passion projects or lower-stress jobs
- Reduces financial pressure while still securing retirement
- Leverages the power of compound interest over time
- Allows for better work-life balance earlier in life
- Can pursue entrepreneurship or creative work without financial fear
Disadvantages
- Requires continued employment to cover living expenses
- Dependent on market returns over long time periods
- No immediate complete financial freedom
- Must resist temptation to withdraw from retirement savings
- Market downturns can delay retirement plans
- Not suitable for those seeking to stop working entirely
Frequently Asked Questions About Coast FIRE
Your Coast FIRE number depends on three factors: your target retirement fund (typically 25x annual expenses), your current age, and your planned retirement age. For example, if you need $1 million at retirement and you're 30 with 35 years until retirement, you'd need approximately $118,000 today (assuming 7% returns). Use our Coast FIRE Calculator to get your personalized number.
The earlier you start, the lower your Coast FIRE number will be due to more time for compound growth. However, Coast FIRE is achievable at any age. Starting in your 20s or early 30s offers the most flexibility, but even those in their 40s can benefit from the strategy by adjusting their retirement age or savings target.
Yes, but with much more flexibility. After reaching Coast FIRE, you need to work enough to cover your current living expenses, but you don't need to save for retirement anymore. This allows you to take lower-paying but more fulfilling jobs, work part-time, pursue entrepreneurship, or take career breaks without jeopardizing your retirement security.
The main risks include: market underperformance (if returns are lower than expected, you may not reach your retirement goal), inflation eroding purchasing power, unexpected major expenses requiring you to tap retirement savings, and job loss making it difficult to cover living expenses. Mitigate these by using conservative return estimates, maintaining an emergency fund, and regularly reviewing your plan.
Use the formula: Coast FIRE Number = (Annual Expenses × 25) ÷ (1 + Return Rate)^Years to Retirement. Or simply use our Coast FIRE Calculator at the top of this page. Input your current age, retirement age, expected expenses, and the calculator will determine your Coast FIRE number instantly.
A 7% annual return is based on historical stock market averages. The S&P 500 has returned about 10% annually (1926-2024), minus 3% inflation, giving us 7% real returns. While past performance doesn't guarantee future results, 7% is considered a reasonable long-term assumption for a diversified stock portfolio. Conservative planners might use 6% or even 5% to build in a safety margin.
Coast FIRE means you've saved enough that compound growth will reach your retirement goal without additional contributions—you just need to cover living expenses. Barista FIRE means you have partial FIRE savings and work part-time to cover both expenses and continue contributing to retirement. Coast FIRE requires a higher initial savings amount but no future retirement contributions.
Yes! Coast FIRE is actually more accessible than traditional FIRE for modest earners because the savings target is lower. The key is starting early to maximize compound growth time. Even saving $200-300 monthly in your 20s can put you on track for Coast FIRE. Focus on increasing your savings rate rather than your income, and start as early as possible.
Related Coast FIRE Tools and Resources
Coast FIRE Calculator
CalculatorCalculate your personalized Coast FIRE number with our interactive calculator. Get instant results and see how different variables affect your target.
How to Calculate Coast FIRE
GuideStep-by-step guide to manually calculating your Coast FIRE number, understanding the formula, and adjusting for your personal situation.
Coast FIRE for Couples
CalculatorSpecial calculator for couples planning Coast FIRE together. Account for dual incomes, combined expenses, and coordinated retirement planning.
Coast FIRE by Age
ReferenceSee Coast FIRE benchmarks by age. Compare your progress to typical Coast FIRE numbers for different age groups and income levels.
Important Disclaimer
Important Disclaimer
This article provides educational information about Coast FIRE based on standard financial principles (Trinity Study, 1998) and should not be considered professional financial advice. Investment returns are not guaranteed, and past performance does not predict future results. This guide does not account for taxes, investment fees, or other expenses that may affect your retirement planning. Your actual Coast FIRE number may vary based on market conditions, inflation, personal circumstances, tax obligations, and other factors. We strongly recommend consulting with a qualified financial advisor before making significant financial decisions. The calculators and examples provided are for illustrative purposes only and may not reflect your specific situation.