Quick Summary
A clear explanation of Coast FIRE - what it is, how to calculate your number, the formula behind it, and how it compares to other FIRE approaches. Includes examples at different ages and income levels.
Coast FIRE is one of the more approachable ideas in the financial independence world. The concept is straightforward - save and invest enough early on that compound growth handles the rest, even if you never invest another dollar.
It doesn’t mean you stop working. It means you no longer need to save for retirement. That distinction changes things.
Run your own numbers: The Coast FIRE Calculator lets you plug in your age, current investments, and target retirement age to see where you stand. No signup required.
What Is Coast FIRE
Coast FIRE is the point where your existing investments, left untouched, will grow to cover a traditional retirement through compound interest alone.
Here’s the key difference from regular FIRE: you’re not trying to retire early. You’re trying to reach a savings threshold where your future is covered - and then redirect your income however you want.
Someone who hits Coast FIRE at 32 still works. But their paycheck only needs to cover current expenses. No more retirement contributions required. That opens up options - lower-stress work, part-time hours, career changes, or simply spending more of what you earn right now.
The “coast” part is literal. You coast to retirement on what you’ve already built.
The Coast FIRE Formula
The math behind Coast FIRE uses the future value formula, worked in reverse.
The standard future value formula is:
FV = PV x (1 + r)^n
Where:
- FV = Future Value (your retirement target)
- PV = Present Value (what you need invested today)
- r = Expected annual rate of return (adjusted for inflation)
- n = Number of years until retirement
To find your Coast FIRE number, you rearrange the formula to solve for PV:
Coast FIRE Number = FV / (1 + r)^n
This tells you how much you need invested right now so that compound growth reaches your retirement target without additional contributions.
The Coast FIRE formula page breaks this down further with interactive examples.
Choosing Your Variables
Each variable requires an assumption, and those assumptions matter:
Retirement target (FV): A common starting point is 25 times your expected annual expenses in retirement. This comes from the 4% withdrawal rule. If you expect to spend $40,000 per year, that’s a $1,000,000 target. If $60,000, it’s $1,500,000.
Rate of return (r): Historical stock market returns average around 10% nominally, or roughly 7% after inflation. Many Coast FIRE calculations use 7% as the inflation-adjusted figure, though some people use 5-6% for a more conservative estimate.
Years until retirement (n): This is your traditional retirement age minus your current age. Most calculations use 65, though some people target 60 or even 55.
Step-by-Step Calculation
Let’s walk through a specific example.
Assumptions:
- Current age: 30
- Retirement age: 65
- Years to retirement: 35
- Expected annual retirement spending: $50,000
- Retirement target (25x expenses): $1,250,000
- Inflation-adjusted return: 7%
The calculation:
Coast FIRE Number = $1,250,000 / (1.07)^35
First, calculate (1.07)^35 = 10.68
Then: $1,250,000 / 10.68 = $117,041
That’s the number. If this 30-year-old has roughly $117,000 invested today and earns an average 7% real return, their portfolio reaches $1,250,000 by age 65 - without contributing another cent.
Every dollar invested beyond that number either accelerates the timeline or builds additional cushion.
Coast FIRE Numbers by Age
The same formula produces very different numbers depending on when you start. More time means more compounding, which means a lower Coast FIRE threshold.
Here are example Coast FIRE numbers using these shared assumptions:
- Retirement age: 65
- Retirement target: $1,250,000 (based on $50,000/year spending)
- Inflation-adjusted return: 7%
Age 25 (40 years to retirement)
Coast FIRE Number = $1,250,000 / (1.07)^40 = $1,250,000 / 14.97 = $83,500
Forty years of compounding is powerful. Someone at 25 who has roughly $83,500 invested could - in theory - stop contributing to retirement entirely.
Age 30 (35 years to retirement)
Coast FIRE Number = $1,250,000 / (1.07)^35 = $1,250,000 / 10.68 = $117,000
A five-year difference adds about $33,500 to the target. Time is the most significant variable in this formula.
Age 35 (30 years to retirement)
Coast FIRE Number = $1,250,000 / (1.07)^30 = $1,250,000 / 7.61 = $164,200
Age 40 (25 years to retirement)
Coast FIRE Number = $1,250,000 / (1.07)^25 = $1,250,000 / 5.43 = $230,200
The pattern is clear. Every five years you wait, the Coast FIRE number climbs significantly. At 25, it’s $83,500. At 40, it’s $230,200 - nearly three times higher.
This is why the Coast FIRE concept resonates with people who started investing early. Even modest accounts in your 20s can compound into meaningful retirement savings over four decades.
What If You Target Higher Spending?
For $75,000/year in retirement ($1,875,000 target), multiply each number by 1.5. For $100,000/year ($2,500,000 target), multiply by 2.
| Age | $50K/year | $75K/year | $100K/year |
|---|---|---|---|
| 25 | $83,500 | $125,300 | $167,000 |
| 30 | $117,000 | $175,500 | $234,100 |
| 35 | $164,200 | $246,300 | $328,400 |
| 40 | $230,200 | $345,300 | $460,400 |
These numbers assume a 7% inflation-adjusted return. Different return assumptions will shift every figure.
Coast FIRE vs Other FIRE Types
Coast FIRE is one of several variations on the financial independence concept. Here’s how they compare:
Traditional FIRE
Target: 25x annual expenses saved, then stop working entirely. This is the original concept - accumulate enough to live off investment withdrawals indefinitely. For someone spending $50,000/year, that’s $1,250,000.
Lean FIRE
Same as traditional FIRE but with minimized expenses - typically under $40,000/year for a household. The trade-off is a more frugal lifestyle in exchange for reaching the number sooner.
Fat FIRE
The opposite of Lean - targeting a higher standard of living in retirement, often $100,000+ per year. This means saving $2,500,000 or more.
Barista FIRE
Similar in spirit to Coast FIRE, but different in practice. Barista FIRE means having enough invested that you only need a low-income job to cover current expenses (and possibly health insurance). The part-time work bridges the gap between your investment income and your full expenses.
Where Coast FIRE Fits
Coast FIRE is arguably the most achievable milestone of the group. You’re not trying to accumulate enough to stop working - just enough that compound growth handles retirement. It functions as both a standalone goal and a waypoint toward traditional FIRE.
For tracking where you stand across these different approaches, a Financial Planning Template can help organize the numbers in one place.
What Changes After Reaching Coast FIRE
Reaching Coast FIRE doesn’t change your bank account overnight. What it changes is the relationship between your income and your future.
Career flexibility. When retirement savings are covered, the pressure to maximize income drops. Some people find this is where they explore work they genuinely enjoy, even if it pays less.
Spending decisions shift. Current income goes entirely to current life - housing, experiences, generosity, whatever matters to you. The psychological weight of “falling behind on retirement” lifts.
Continued investing becomes optional. Some people keep investing aggressively because they want to retire earlier. Others redirect those funds toward other goals. Both are valid approaches.
Reduced financial anxiety. Knowing the long-term picture is handled - at least according to the math - tends to reduce the background stress that comes with financial planning.
That said, Coast FIRE is based on projections, not guarantees. Which brings us to the limitations.
Limitations and Assumptions
Coast FIRE math is clean and elegant. Reality is messier.
Market returns aren’t guaranteed
The 7% inflation-adjusted return is a historical average. But averages include decades of both strong and weak performance. The sequence of returns matters too - a major crash early on affects the outcome more than one later.
A portfolio that averages 7% over 35 years might experience stretches of 2% or 15% in any given period. Using a slightly lower assumed return (5-6%) adds a margin of safety.
Inflation is unpredictable
The calculation assumes inflation stays at a rate that allows the 7% real return to hold. Periods of unexpectedly high inflation can erode purchasing power in ways the formula doesn’t capture.
Your expenses might change
The retirement spending estimate is a guess about life decades from now. Healthcare costs, housing situations, family needs - these shift in ways that are difficult to predict.
You might not leave investments untouched
Life happens. Job loss, medical bills, emergencies. The Coast FIRE calculation assumes the portfolio grows uninterrupted. Any withdrawals before retirement reduce the final amount.
Tax implications vary
Tax-advantaged accounts (401k, IRA) and taxable accounts have different growth characteristics. The formula doesn’t distinguish between them. In practice, the account types and their tax treatment matter.
It’s a snapshot, not a finish line
Coast FIRE is useful as a milestone, but it’s worth recalculating periodically as your assumptions change. The FIRE Calculator can help model different scenarios with updated numbers.
How to Track Progress
Coast FIRE is a moving target - your number shifts as your age, expected expenses, and market conditions change. Tracking it over time gives a clearer picture than a one-time calculation.
Know your current invested amount
Add up everything earmarked for retirement: 401(k), IRA, Roth IRA, taxable brokerage accounts, and any other long-term investments. Exclude emergency funds, home equity, and savings you plan to use before retirement.
Recalculate periodically
Run the formula once or twice a year with updated numbers. Your Coast FIRE number drops as you age (fewer compounding years needed), while your actual portfolio ideally grows. When those two numbers cross, you’ve reached Coast FIRE.
Track the gap
The most useful metric is the difference between your current investments and your Coast FIRE number. Watching that gap narrow over time is more actionable than tracking either number alone.
A spreadsheet works well for this. The Retirement Financial Planning Template includes projection features that can model this kind of trajectory, including scenarios where contributions stop at different points.
Consider multiple scenarios
Run the numbers with different return assumptions (5%, 7%, 9%) and different spending levels. If you’ve hit Coast FIRE even under conservative assumptions, that’s a stronger position than hitting it only under optimistic ones.
Pulling It Together
Coast FIRE works as both a planning framework and a motivational milestone. The math is simple. The assumptions behind it are worth questioning regularly.
The core idea - that there’s a point where compound growth handles retirement on its own - is powerful for anyone who started investing early or is thinking about long-term financial planning.
Ready to run your own numbers? The Coast FIRE Calculator lets you enter your specific details and see your Coast FIRE number instantly. For ongoing tracking and retirement projections, the Financial Planning Template and Retirement Planning Template can help you model the path forward.