What is Coast FIRE? How to work out your Coast FIRE number

Coast FIRE is the point where the money you’ve already invested will grow into your full retirement number by your target age, even if you never invest another cent. From then on, your income only has to cover your living costs. You still work, but you can take a lower-paid job, work part-time or take a career break without putting retirement at risk.

It’s the halfway house between starting out and full financial independence (FIRE), and for many people it’s the more realistic first goal.

How do you calculate your Coast FIRE number?

Start from the FIRE number you’ll need at your retirement age, in today’s money, and work backwards:

Coast FIRE number = FIRE number ÷ (1 + real return)^{years until retirement}

The real return is your expected return after inflation. If you expect 7% a year and inflation of 3%, the real return is about 3.9%.

For example, say you need 1,000,000 in today’s money at 60 and you’re 35, so 25 years away:

The same target, 30 years away at 4%, needs about 308,000 today; 15 years away it needs about 555,000. Time does most of the work, which is why Coast FIRE is mainly a goal for people in their 20s and 30s.

The method works in any currency: only the ratio matters, so 1,000,000 can be dollars, pounds, euros or rupees.

Coast FIRE vs. other kinds of FIRE

Coast FIRE and Barista FIRE are often confused. With Coast FIRE you don’t touch your investments at all until retirement; with Barista FIRE you already draw on them, topped up by work.

What can go wrong?

Coast FIRE depends on assumptions that won’t hold exactly, so treat the number as a range, not a finish line.

• Returns could be lower. At 3% real instead of 4%, the example above needs about 100,000 more today. Using a cautious real return of 3 to 4% leaves some margin.
• Your spending could rise. Children, a move or health costs can raise the FIRE number itself. Re-check it every year.
• A late crash hurts most. A large market fall in the last few years before retirement leaves little time to recover. Moving gradually towards bonds as retirement approaches reduces that risk.
• Some savings may be locked. If part of your money is in a pension you can’t touch until a set age (57 in the UK, 60 in Australia, 65 for KiwiSaver), check that the money you need for the years before then is outside it.
• Fees and taxes. Use returns after fees and, where it applies, after tax.

How do you use Coast FIRE in practice?

1. Work out your FIRE number for the age you want to retire. The FIRE calculator does this year by year, rising with inflation.
2. Compare your current investments with the Coast FIRE number it shows. If you’re above it, you’ve reached Coast FIRE.
3. Decide what to do with the extra freedom. Many people keep investing anyway, just less, so they can retire earlier or with more margin.
4. Review once a year with your actual balances. A good year might pull your date forward; a bad one might mean a few more years of saving.

If you’d rather plan a regular retirement, the retirement calculator works the same way for a retirement at 60 to 65. Country editions with local pensions and rules are available for the USA, the UK, Canada, Australia, New Zealand and India.

Frequently asked questions

What is a good Coast FIRE age?

There isn’t one right age, but most people who aim for it want to reach it in their 30s or early 40s. The earlier you get there, the smaller the amount you need, because there are more years for growth.

Does Coast FIRE mean I stop saving for retirement?

It means you can. Whatever you keep investing makes you more secure or lets you retire earlier. Many people keep investing at a lower rate.

What return should I use?

A real (after-inflation) return of 3 to 4% a year is a cautious choice for a mixed portfolio of shares and bonds. Higher assumptions shrink the number, but if returns turn out lower you’d fall short.

For education only, not financial advice. Read the disclaimer.