What is Coast FIRE

What is Coast FIRE

Coast FIRE is the point where your current investments, left untouched, will grow to your retirement target by a traditional retirement age through compound growth alone. After reaching Coast FIRE, you only need to earn enough to cover current expenses. Your future retirement is already funded.

This creates options. You could switch to lower-paying work you enjoy more, go part-time, or just stop worrying about retirement savings while continuing your career.

The Math Behind It

Say you want $1.25 million at age 65 and expect 7% annual investment returns. Working backwards, you can calculate how much you need today for compound growth to do the rest.

A 30-year-old with 35 years until 65 would need about $250,000 today. At 7% annually, $250,000 grows to roughly $1.25 million over 35 years without adding another dollar.

A 40-year-old with 25 years to go would need about $460,000 for the same result.

The formula is: Coast FIRE Number = Target ÷ (1 + return rate)^years

Checking Your Own Numbers

The Coast FIRE calculator runs this math for your situation. Enter your age, target retirement age, current investments, desired retirement income, and expected returns.

You will see whether you have already reached Coast FIRE, and if not, when you will at your current savings rate.

The Trade-offs

Coast FIRE is not the same as retiring early. You still need income to cover current expenses. The appeal is reduced pressure: knowing retirement is handled even if you stop contributing.

The main risk is that projected returns may not materialize. If you assume 7% and get 5%, your portfolio will fall short. Many Coast FIRE planners build in margin by targeting a higher number or using more conservative return assumptions.

Who This Works For

Coast FIRE makes most sense for people who started saving early and want more flexibility before traditional retirement. Someone who maxed their 401k through their 20s might hit Coast FIRE by their mid-30s.

It works less well for late starters since there is less time for compounding.

Projections assume consistent returns, which real markets do not provide. This is educational information, not financial advice.