What is Coast FIRE?

Coast FIRE (Financial Independence, Retire Early), or Coast FI, is a unique strategy within the FIRE movement. It involves saving enough money early in life to fund retirement, allowing you to stop making additional retirement contributions later on. This approach focuses on achieving a level of financial security where your existing savings can grow to support a comfortable retirement without requiring further contributions.

Key Principles of Coast FIRE

The strategy revolves around aggressive early savings, after which you can ‘coast’ through your remaining working years without the pressure of saving for retirement. Your investments continue growing in the background while you focus on covering current expenses.

A Real-Life Example: The Path to Coast FIRE

Consider someone who aggressively saves for retirement in their 20s and 30s. By age 40, they’ve accumulated enough that their investments will grow to fund a comfortable retirement by 65, even without adding another dollar. This allows them to shift focus to current expenses, pursue lower-paying but more fulfilling work, or simply reduce financial stress without worrying about retirement savings.

Benefits of Coast FIRE

• Early Financial Security: Provides peace of mind knowing your retirement is already secured.
• Workplace Flexibility: Enables career changes or reduced hours without worrying about retirement savings.
• Focus on Present Needs: Shifts your financial focus from future retirement to current lifestyle and expenses.

Incorporating Coast FIRE into Your Financial Plan

Coast FIRE appeals to those seeking early financial security while maintaining the freedom to adjust their work and life balance. It’s particularly well-suited for high earners early in their careers who can save aggressively before shifting to less demanding or more personally fulfilling work.

Frequently Asked Questions About Coast FIRE

What is the difference between Coast FIRE and regular FIRE?

Regular FIRE means you have enough saved to retire immediately and live off your investments. Coast FIRE means you have enough saved that it will grow to support retirement at a traditional age (like 65), but you still need to work to cover current living expenses. With Coast FIRE, you continue working but without the pressure to save for retirement.

Should I still save for retirement after reaching Coast FIRE?

You can continue saving if you want to retire earlier than your target age or increase your retirement lifestyle. Reaching Coast FIRE simply means you’ve hit the minimum threshold where additional savings aren’t required. Any extra contributions will accelerate your path to full financial independence.

What happens if the market crashes after I reach Coast FIRE?

Market downturns are a risk with any long-term investment strategy. The advantage of Coast FIRE is that you have decades for your investments to recover before retirement. If you reach Coast FIRE at 35 with plans to retire at 65, that’s 30 years of potential recovery time. You can also choose to temporarily resume retirement contributions during downturns to stay on track.

Is Coast FIRE the same as Barista FIRE?

No, they’re different strategies. Coast FIRE means your retirement savings are set and growing, but you still work to cover current expenses. Barista FIRE means you have some retirement savings and supplement them with part-time work income. With Coast FIRE, you might still work full-time; with Barista FIRE, you’re typically semi-retired and working part-time.

Calculate Your Coast FIRE Number

Calculating your Coast FIRE number requires considering your current age, target retirement age, expected investment returns, and desired retirement spending. The key is determining how much you need today so that compound growth can do the heavy lifting over the remaining years until retirement.

ProjectionLab’s Coast FIRE Calculator handles these complex calculations for you. You can model different scenarios to see exactly how much you need to save now based on various retirement timelines and spending levels. The tool shows you when you’ll reach Coast FIRE and how different career decisions might accelerate or delay that milestone, helping you make informed choices about your path to financial independence.