What is Coast FIRE?
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The short answer
Coast FIRE is the point where your retirement savings can grow into everything you'll need by your retirement age without another contribution. Once you reach it, you can stop saving for retirement and only earn enough to cover your current bills. The amount that gets you there is your Coast FIRE number.
FIRE stands for financial independence, retire early. Full FIRE means saving enough to stop working altogether. Coast FIRE is a halfway point: you still work, but you no longer have to save, so you can take a job that pays less, work fewer hours, or spend more of what you earn.
The idea rests on compound growth. Money invested at 35 has decades to grow before you retire, so a smaller amount now can do the job of a much larger amount later.
The formula
You need two numbers. Your FIRE number is what you need invested on the day you retire. Your Coast FIRE number is what you need invested today to grow into it.
FIRE number = yearly spending in retirement ÷ withdrawal rateWith a 4% withdrawal rate, that's 25 times what you plan to spend each year.
Coast FIRE number = FIRE number ÷ (1 + r) ^ years until retirementr is the yearly return you expect after inflation. Dividing by (1 + r) once per year runs the growth backward, from the day you retire to today.
If you expect Social Security or a pension, your FIRE number goes down, because your savings only cover the part of your spending that income doesn't. How we calculate explains how the calculator handles income that starts after you retire.
The 4% figure comes from studies of how much retirees could have withdrawn from a stock and bond portfolio in past markets without running out over 30 years, the best known being the Trinity study. For retirements longer than 40 years, Early Retirement Now's research suggests 3.25% to 3.5% is safer.
Three examples
All three people want the same retirement: $40,000 a year from 65, with a 5% return after inflation and a 4% withdrawal rate. That makes the FIRE number $1,000,000 for each of them. The only difference is how long their money has to grow.
Example 1: starting at 25
With 40 years to go, the money has a long time to compound.
| Age today | 25 |
|---|---|
| Retire fully at | 65 |
| Spending per year in retirement | $40,000 |
| Return after inflation | 5% |
| Withdrawal rate | 4% |
| FIRE number at 65 | $1,000,000 |
|---|---|
| Coast FIRE number today | $142,046 |
$142,046 invested at 25 grows to $1,000,000 by 65 at 5% a year, with nothing added along the way.
Example 2: starting at 35
Ten years later, the same goal takes noticeably more.
| Age today | 35 |
|---|---|
| Retire fully at | 65 |
| Spending per year in retirement | $40,000 |
| Return after inflation | 5% |
| Withdrawal rate | 4% |
| FIRE number at 65 | $1,000,000 |
|---|---|
| Coast FIRE number today | $231,377 |
Ten fewer years of growth means needing more than one and a half times as much invested today: $231,377 instead of the 25-year-old's figure.
Example 3: starting at 45
With 20 years left, most of the FIRE number still has to be saved.
| Age today | 45 |
|---|---|
| Retire fully at | 65 |
| Spending per year in retirement | $40,000 |
| Return after inflation | 5% |
| Withdrawal rate | 4% |
| FIRE number at 65 | $1,000,000 |
|---|---|
| Coast FIRE number today | $376,889 |
At 45 the Coast number is $376,889, more than twice the figure at 25. Each decade of waiting costs more than the one before, because the growth lost is growth on a larger sum.
These are classic Coast numbers: what you'd need today if you stopped saving right now. Most people keep saving for a while, and the Coast FIRE calculator shows the age you can stop based on what you're saving now.
Try it with your numbers
You need $369,128 invested today to coast to 60.
Your $300,000 is 81.3% of it. That's with a 5% return after inflation and the 4% rule.
Open the full calculator to add your saving, Social Security, a partner or part-time years.
Coast FIRE and the other kinds of FIRE
- Full FIRE: you've saved enough to stop working entirely and live off your investments.
- Coast FIRE: you've saved enough to stop saving. Your job still pays your bills until you retire.
- Barista FIRE: you've saved enough to switch to part-time work, and your investments cover the gap between part-time pay and your spending. The Barista FIRE calculator handles that plan.
- Lean FIRE and Fat FIRE describe how much you plan to spend in retirement, from frugal to comfortable. There's no agreed dollar cutoff for either.
These can overlap. A common path is to reach Coast FIRE first, then cut back to part-time work, then retire fully once your savings catch up.
Who Coast FIRE suits
Coast FIRE works best for people who started investing early and now want more room in how they work. Someone in their 30s with a healthy balance might use it to take a lower-paid job they enjoy, go back to school, or spend more on a young family.
It fits less well if you're close to retirement, because there are too few years left for growth to do much. It also fits less well if your income is unstable, since coasting assumes you can cover your bills from work for years to come.
The risks
- Returns could come in lower than you assumed. At 4% instead of 5%, a 30-year gap needs about a third more invested today.
- The order of returns matters once you start withdrawing. While you're only coasting, an early crash and a late one leave you with the same amount at retirement. In your first years of retirement, a crash does more damage than the same crash 20 years later.
- You still need to earn your living until retirement. A layoff or health problem that stops you working doesn't touch the Coast math, but it can force you to draw on savings early.
- Spending tends to grow. If retirement ends up costing more than you planned, your Coast number was too low.
- Health insurance before 65, if you're in the US, can be a large cost the basic formula leaves out.
None of these mean Coast FIRE doesn't work. They mean the number is an estimate that's worth rechecking every year or two, and worth some margin. The calculator's sensitivity table shows how much your number moves when the return or withdrawal rate changes.
Common questions
What does Coast FIRE mean?
It means you've invested enough that your savings can grow into your full retirement number on their own, so you can stop putting money aside and only earn enough to live on.
How do I calculate my Coast FIRE number?
Divide your yearly retirement spending by your withdrawal rate to get your FIRE number, then divide that by (1 + your expected real return) once for each year until you retire. Or calculate your Coast FIRE number with our calculator, which also counts Social Security and pensions.
Is Coast FIRE the same as retiring early?
No. You keep working until your retirement age. What changes is that you no longer need to save for retirement, so you can earn less or spend more.
Do I have to stop saving once I reach Coast FIRE?
No. Many people keep saving something as a cushion against lower returns, or to retire earlier than planned. Coast FIRE gives you the choice. It doesn't require you to stop.
What if I fall behind after I stop saving?
If your balance drops below your Coast number for the age you're at, you'd need to save again, retire later or plan to spend less. Rerunning the numbers each year shows whether you're still on track.
Does Coast FIRE work outside the US?
The math is the same anywhere. What changes is the public pension, the age you can reach retirement accounts, and the costs you face. The calculator has presets for Canada, the UK and Australia that change the labels and defaults.
Sources
- Cooley, Philip L., Carl M. Hubbard and Daniel T. Walz. "Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable." AAII Journal, February 1998. Usually called the Trinity study.
- Jeske, Karsten (Early Retirement Now). The Safe Withdrawal Rate Series. earlyretirementnow.com/safe-withdrawal-rate-series
- Shiller, Robert J. Monthly US stock prices, dividends, earnings, consumer prices and long-term interest rates since 1871. shillerdata.com
- US Social Security Administration. Retirement benefits. www.ssa.gov/benefits/retirement
- US Social Security Administration. my Social Security (your personal benefit estimate). www.ssa.gov/myaccount
- Government of Canada. Canada Pension Plan. www.canada.ca/en/services/benefits/publicpensions/cpp.html
- Government of Canada. Old Age Security. www.canada.ca/en/services/benefits/publicpensions/old-age-security.html
- GOV.UK. The new State Pension. www.gov.uk/new-state-pension
- GOV.UK. Check your State Pension forecast. www.gov.uk/check-state-pension
- Services Australia. Age Pension. www.servicesaustralia.gov.au/age-pension