What is Coast FIRE? The Complete Guide to Coasting to Financial Independence
Coast FIRE is one of the most achievable paths to financial independence, yet it's often misunderstood. Unlike traditional FIRE that requires aggressive saving until you can retire immediately, Coast FIRE lets you stop saving entirely while still reaching financial independence by your desired retirement age.
What You'll Learn in This Guide
- What Coast FIRE is and how it differs from traditional FIRE
- How to calculate your personal Coast FIRE number
- Real-world examples of Coast FIRE in action
- Strategies to reach Coast FIRE faster
- Common mistakes to avoid on your Coast FIRE journey
- Life after Coast FIRE - what to do once you reach your number
What is Coast FIRE?
Coast FIRE means you've saved enough money that compound growth alone will carry you to full financial independence by your target retirement age, even if you never save another dollar.
The Coast FIRE Advantage
Once you reach your Coast FIRE number, you can:
- Stop aggressive saving entirely
- Take lower-paying jobs you enjoy more
- Start a passion project or business
- Travel or take extended breaks
- Live more freely knowing retirement is handled
Coast FIRE vs Traditional FIRE
FIRE Strategy Comparison
| Aspect | Traditional FIRE | Coast FIRE |
|---|---|---|
| Savings Rate | 50-70% of income until retirement | Aggressive for 5-10 years, then minimal |
| Timeline | 10-15 years of aggressive saving | Shorter accumulation, longer coast period |
| Retirement Age | Immediate when target reached | Traditional retirement age (60-65) |
| Lifestyle Flexibility | Minimal during accumulation | Maximum after reaching Coast FIRE |
| Risk Level | Higher (immediate retirement) | Lower (gradual transition) |
| Income Requirements | Must cover all expenses immediately | Can work part-time or lower-paying jobs |
Key Differences
- Traditional FIRE: All-or-nothing approach with immediate retirement
- Coast FIRE: Gradual transition with decades of lifestyle flexibility
- Same outcome: Both achieve financial independence
- Different path: Coast FIRE offers more lifestyle options
How to Calculate Your Coast FIRE Number
The Coast FIRE formula is:
Coast FIRE Number = FIRE Number Ć· (1 + return rate)^years to retirement
Example Calculation
Let's say you're 30 years old and want to retire at 60 with $80,000 annual income:
- FIRE Number: $80,000 Ć· 0.04 = $2,000,000 (using 4% rule)
- Years to retirement: 60 - 30 = 30 years
- Expected return: 7% annually
- Coast FIRE Number: $2,000,000 Ć· (1.07)^30 = $262,000
This means if you save $262,000 by age 30, you can stop saving entirely and still have $2 million at 60!
Real Coast FIRE Examples
Example 1: The Teacher
| Category | Details |
|---|---|
| Person | Sarah, age 25, teacher making $45,000 |
| Goal | Retire at 62 with $60,000 annual income |
| Coast FIRE number | $195,000 |
| Strategy | Save aggressively for 8 years, then coast for 29 years |
| Monthly savings needed | $2,000 (53% savings rate) |
Example 2: The Tech Worker
| Category | Details |
|---|---|
| Person | Mike, age 35, software engineer making $120,000 |
| Goal | Retire at 55 with $100,000 annual income |
| Coast FIRE number | $633,000 |
| Current savings | $400,000 |
| Additional needed | $233,000 |
| Timeline | 3-4 years of aggressive saving |
Example 3: The Late Starter
| Category | Details |
|---|---|
| Person | Lisa, age 45, nurse making $70,000 |
| Goal | Retire at 67 with $70,000 annual income |
| Coast FIRE number | $1,170,000 |
| Strategy | Aggressive saving but still achievable |
| Monthly savings needed | $4,000 (69% savings rate) |
Coast FIRE Strategies
1. Front-Load Your Savings
The earlier you reach Coast FIRE, the more freedom you have. Consider:
- Living on one income if you're a couple
- House hacking to reduce expenses
- Side hustles to accelerate savings
- Geographic arbitrage (move somewhere cheaper)
2. Optimize Your Investment Returns
Coast FIRE depends heavily on compound growth:
- Stock market index funds (historical 10% returns)
- Target date funds for automatic allocation
- Roth IRAs for tax-free growth
- 401(k) matching is free money
3. Choose Your Coast FIRE Lifestyle
Once you hit Coast FIRE, you have options:
- Barista FIRE: Work part-time for health insurance
- Geoarbitrage: Move to lower cost of living area
- Passion projects: Start that business you always wanted
- Career pivot: Take that lower-paying dream job
Common Coast FIRE Mistakes
1. Underestimating Inflation
- Use real returns (7% vs 10% nominal)
- Plan for healthcare cost increases
- Consider lifestyle inflation over decades
2. Ignoring Taxes
- Traditional 401(k) withdrawals are taxable
- Consider Roth conversions during low-income years
- Plan for tax-efficient withdrawal strategies
3. Not Having a Post-Coast Plan
- What will you do after reaching Coast FIRE?
- How will you handle health insurance?
- Will you have enough social stimulation?
Coast FIRE Age Milestones
Here's when to aim for Coast FIRE based on your retirement goals:
For Retirement at 65
| Age You Reach Coast FIRE | Percentage of Final FIRE Number Needed | Years of Compound Growth |
|---|---|---|
| 25 | 15% | 40 years |
| 30 | 22% | 35 years |
| 35 | 35% | 30 years |
| 40 | 54% | 25 years |
| 45 | 76% | 20 years |
| 50 | 100% | 15 years |
For Retirement at 55
| Age You Reach Coast FIRE | Percentage of Final FIRE Number Needed | Years of Compound Growth |
|---|---|---|
| 25 | 35% | 30 years |
| 30 | 50% | 25 years |
| 35 | 76% | 20 years |
| 40 | 100% | 15 years |
| 45 | 162% | 10 years |
Is Coast FIRE Right for You?
Coast FIRE works best if you:
- ā Can save aggressively for 5-10 years
- ā Want maximum lifestyle flexibility
- ā Don't mind working until traditional retirement age
- ā Trust in long-term market returns
- ā Have predictable retirement goals
Coast FIRE might not work if you:
- ā Want to retire before 55
- ā Have unpredictable income
- ā Prefer steady, consistent saving
- ā Need psychological security of larger balances
Getting Started with Coast FIRE
- Calculate your Coast FIRE number using our free calculator
- Assess your current savings and investment returns
- Create a timeline for reaching Coast FIRE
- Optimize your savings rate and investment strategy
- Plan your post-Coast lifestyle and income needs
The Bottom Line
Coast FIRE offers a middle ground between aggressive traditional FIRE and conventional retirement planning. By front-loading your savings and trusting compound growth, you can achieve financial freedom with decades of lifestyle flexibility.
The key is starting early and saving aggressively during your highest-earning years. Once you hit your Coast FIRE number, you've essentially secured your financial future and can focus on living life on your terms.
Ready to calculate your Coast FIRE number? Use our free calculator to see exactly how much you need to save to coast to financial independence.
Ready to plan your path to FIRE?
Take control of your financial future with our comprehensive suite of free FIRE calculators. Whether you're mapping your coast FIRE timeline, calculating your target number, or planning your investment growth, we've got the tools to help you create a personalized roadmap to financial independence.