Coast FIRE explained: when can you stop saving for retirement?
Coast FIRE means you've saved enough that your money can grow to your retirement goal on its own. You still work to pay today's bills, but you don't need to save for retirement anymore.
Key points
- Your "coast number" is what you need invested today to reach your goal by retirement age.
- The younger you are, the smaller your coast number.
- After you hit it, you could take a lower-stress job or work fewer hours.
The simple idea
Say you need $1.25 million by age 65. If you have enough invested at 30, compound growth could get you there by 65 without adding another dollar. That starting amount is your coast number.
Coast number = retirement goal ÷ (1 + yearly return) ^ years until retirement
Coast numbers by age
To reach $1.25 million by 65, here's what you'd need invested today:
| Your age | At 7% a year | At 8% a year |
|---|---|---|
| 25 | $83,475 | $57,539 |
| 30 | $117,079 | $84,543 |
| 35 | $164,209 | $124,222 |
| 40 | $230,311 | $182,522 |
Many people use 7% because it's closer to stock returns after inflation. That keeps the goal in today's dollars.
Coast FIRE vs other kinds of FIRE
- Full FIRE: enough saved to stop working completely.
- Coast FIRE: enough saved for later, but you still work for today's costs.
- Barista FIRE: you've saved a lot and use a part-time job to fill the gap.
- Lean FIRE: retire on a small budget.
Why people like Coast FIRE
- You can switch to work you enjoy, even if it pays less.
- Less pressure to save every dollar.
- It's a reachable goal much earlier in life.
Things to watch
- Returns aren't promised. A slow decade could leave you short. Many people keep saving a little anyway.
- Don't touch the money. Pulling money out breaks the plan.
- Health insurance. A lower-paying job may have weaker benefits.
Find out when your money could reach your freedom number.
Find your Freedom DayQuick answers
What is Coast FIRE?
It means you have enough invested that, without adding more, it should grow to your retirement goal by your planned retirement age.
How do I calculate my Coast FIRE number?
Divide your retirement goal by (1 + your expected yearly return) raised to the number of years until retirement.
Is Coast FIRE realistic?
It can be, especially if you start investing in your 20s. Many people still save a little after reaching it, just to be safe.
What return should I use for Coast FIRE?
Many people use about 7%, which is close to long-run stock returns after inflation.
Sources
Keep learning
This article is for learning only. It is not financial, tax or legal advice. Example returns are not promises. Talk to a licensed professional about your own situation.