Coast FIRE: A Realistic Path to Early Financial Independence
If you’ve ever heard of the FIRE movement—Financial Independence, Retire Early—you know it’s an inspiring yet often intimidating goal. Sacrificing your lifestyle drastically or accumulating a massive nest egg quickly can feel unrealistic for many people. That’s where Coast FIRE steps in—a balanced, middle-ground approach to financial freedom that lets you enjoy life now while still setting yourself up for an early retirement down the road.
In this post, we’ll break down what Coast FIRE really means, how it differs from traditional FIRE, and how to calculate your own Coast FIRE number by age. Plus, we’ll dive into practical tips for applying it to your own finances, so you can build wealth without burning out.
What Is Coast FIRE?
The Concept Explained
Coast FIRE is the strategy of investing enough money early on so that, without making any additional contributions, your investments will grow to cover your retirement expenses at a future date. Think of it as paying off a mortgage or a car loan early—once you’ve “paid off” your retirement savings goal through compounding, you can stop saving aggressively for retirement.
You still earn money and cover your daily expenses, but you no longer have to sock away large amounts toward retirement. Instead, you can focus on pursuing less stressful jobs, hobbies, or passions that may not pay as well but improve your quality of life.
How Does It Differ from Traditional FIRE?
Traditional FIRE typically requires extreme saving rates—often 50-70% of your income—to amass a large nest egg quickly. This often means cutting back on lifestyle expenses, working multiple jobs, or living frugally for years. Coast FIRE offers a more flexible alternative by allowing you to save aggressively early on, then coast along as your investments compound.
The FIRE Spectrum
The FIRE movement isn’t one-size-fits-all. There’s a spectrum, including:
- Lean FIRE: Minimalist lifestyle with very low expenses.
- Barista FIRE: Semi-retirement with part-time work.
- Coast FIRE: Early aggressive saving followed by reduced contributions.
- Fat FIRE: High-expense lifestyle with large nest egg.
Coast FIRE lies comfortably in the middle, balancing lifestyle enjoyment with financial security.
How Do You Calculate Your Coast FIRE Number?
Key Assumptions
Before we dive into calculations, it’s important to understand the assumptions used:
- Annual retirement spending: $75,000 (adjustable based on your lifestyle and cost of living)
- Investment growth rate: 7% (a conservative estimate based on historical market returns)
- Inflation rate: 3% (average inflation rate over recent decades)
- Withdrawal rate: 4% (safe withdrawal rate based on the Trinity Study)
- Current invested assets: Assumed zero for example purposes
- Retirement age scenarios: 50 years old and 62 years old are common targets
The Math Behind It
The Coast FIRE number is essentially your retirement nest egg—the amount you need invested so that, with compounding growth, it will reach your FIRE number by your target retirement age without any additional contributions.
The FIRE number itself is calculated as:
Annual spending × 25 = FIRE number
This multiplier comes from the 4% withdrawal rule, which suggests you can withdraw 4% annually from your investments indefinitely without running out of money.
Example Calculations by Age
Let’s look at some examples assuming a $75,000 annual retirement spending goal.
Starting at Age 30
- To retire at 62, you’d need to have invested about $535,000 today.
- With 7% growth over the next 32 years, this will grow to approximately $791,000 (your FIRE number adjusted for inflation).
- If you wanted to retire earlier, say at 50, your Coast FIRE number jumps to about $855,000 because you have fewer years to grow your investment.
Starting at Age 40
- For retirement at 62, you’d need about $1.26 million invested now.
- For retirement at 50, the number grows significantly to $1.26 million because the window to grow shrinks.
Starting at Age 50
- To retire at 62, you’d need around $1.73 million invested now.
- This reflects the reality that the closer you get to retirement, the more you need to have saved upfront.
Adjusting for Lifestyle and Location
If you live in a high-cost area or want a more lavish retirement, you might need $125,000 or more annually. For example, retiring at 62 with $125,000 annual spending requires nearly $2 million at age 50, and over $3 million if you want to retire at 50.
Conversely, if you need only $50,000 annually, your Coast FIRE target is significantly lower—around $570,000 at age 50 to retire at 62.
Why Coast FIRE Might Be Perfect for You
Less Stress, More Flexibility
The beauty of Coast FIRE is that it removes the pressure of aggressive saving forever. Once you hit your Coast FIRE number, saving for retirement becomes optional. You can explore careers that you’re passionate about, even if the pay is lower, or take time off to travel or focus on family.
A Practical Approach for Many
Not everyone can or wants to save 50% of their income for 10 years. Coast FIRE offers a more attainable goal that still sets you up for financial independence without extreme sacrifice.
Imagine Your Life After Coast FIRE
Some people even liken reaching Coast FIRE to paying off a loan. It’s that moment when you cross off “save for retirement” from your financial to-do list. After that, your money works for you, and you can focus on living life how you want.
Real-Life Application: Marco’s Coast FIRE Journey
Marco, the creator of Whiteboard Finance, shares that he is personally pursuing Coast FIRE. At age 36, with two young daughters, he aims to reach his Coast FIRE number by age 50. This means he can maintain his current lifestyle now while knowing he will be financially independent in 14 years.
He’s weighing whether to continue investing aggressively to increase his annual spending in retirement or lean on other income sources, like his wife’s pension. His mindset is to “die with zero” — not literally, but meaning he doesn’t want to work longer than necessary or leave excessive amounts untapped.
Marco also stresses the importance of being conservative with assumptions because unexpected events like economic downturns or global crises can impact your plan.
Tips for Making Coast FIRE Work for You
1. Start Early and Invest Aggressively
The earlier you start, the less you have to save overall because compound growth does the heavy lifting.
2. Be Realistic with Your Spending Needs
Think carefully about how much money you’ll need annually in retirement. Consider your housing situation, healthcare costs, and lifestyle preferences.
3. Use Reliable Tools and Calculators
Online calculators like the one from Wallet Burst can help you estimate your Coast FIRE number based on your age, spending goals, and expected returns.
4. Keep an Emergency Fund and Safety Net
Coast FIRE assumes steady investment growth, but life is unpredictable. Keep a cash cushion for emergencies.
5. Reassess Regularly
Review your plan every few years. Changes in income, expenses, or market conditions may require adjustments.
Frequently Asked Questions About Coast FIRE
Can I still work after I reach Coast FIRE?
Absolutely! Coast FIRE means you no longer need to save for retirement, but you can keep working for income, enjoyment, or purpose.
Is Coast FIRE safe if the market crashes?
While no plan is 100% risk-free, using conservative assumptions and maintaining diversified investments helps protect your nest egg.
What if I want to retire earlier than 50?
The earlier you want to retire, the bigger your Coast FIRE number will need to be since your investments have less time to grow.
How does inflation affect Coast FIRE?
Inflation reduces your purchasing power over time, so your Coast FIRE number accounts for inflation-adjusted spending.
Final Thoughts
Coast FIRE represents a refreshing, practical approach to financial independence. It’s not about extreme austerity; it’s about smart investing and thoughtful planning so you can enjoy today and prepare for tomorrow. Whether you’re in your 30s, 40s, or 50s, understanding your Coast FIRE number can provide clarity and peace of mind.
By focusing on hitting that magic number early, you can cross off saving for retirement as a life stressor and start living life on your terms. It’s a strategy grounded in realism and flexibility—perfect for anyone who wants to build wealth without losing their sanity along the way.
Feel free to share your Coast FIRE age and number in the comments—let’s inspire each other to achieve financial freedom without sacrificing the things that matter most!
