Coast FIRE, Explained

After reading this you can compute your Coast FIRE number: the amount that, left alone with no new contributions, grows into your full retirement target by the age you pick, and check whether your current savings already clear that bar.

What Coast FIRE means

Coast FIRE is a single milestone. It is the point at which your invested savings, given enough years and a reasonable return, will grow on their own into the sum you need for retirement. Once you reach it, you never have to save another cent for retirement. You still have to cover your living costs now, but the retirement problem is solved by compounding alone.

Here is the hook. Suppose you are 30, you want to retire at 65, and you have worked out that you will need 1,000,000 at retirement. If your money earns 4% per year after inflation, you do not need a million now. You need the amount that compounds to a million over 35 years. That is about 253,000. Reach roughly a quarter of a million, stop saving, and the market does the rest across the next 35 years.

That gap between the full target and the much smaller Coast number is the whole idea. The earlier you are in life, the smaller the Coast number, because compounding has more time to work.

When to use it, and when not to

Coast FIRE is useful when you want to know how much saving pressure you can safely release. If you have been saving hard in your twenties and want to switch to a lower-paid job you enjoy, the Coast number tells you the balance at which that switch does not endanger retirement.

It is the wrong tool in two cases. First, if your target and your return assumption are shaky, the Coast number is shaky too, because it is very sensitive to the return rate. Second, Coast FIRE says nothing about the years between now and retirement. You still need income to live. If you stop saving but also lose your ability to cover expenses, Coast FIRE will not help.

Coast FIRE and full FIRE differ. Full FIRE means your portfolio covers your living costs now. Coast FIRE means your portfolio will cover them later, at retirement, without further help. Coast comes first and needs a much smaller balance.

The formula and the intuition

Build the number in two steps. First, find the full retirement target from spending and a safe withdrawal rate. If you plan to spend E per year and withdraw a fraction w of the portfolio each year, the target is spending divided by the rate:

T = \frac{E}{w}

Here T is the target balance at retirement, E is annual retirement spending, and w is the safe withdrawal rate written as a decimal. A 4% rate means w = 0.04, so the target is 25 times spending.

Second, discount that target back to now. Money grows by a factor of (1+r) each year, so over n years it multiplies by (1+r)^n. To find how much you need at present, divide the target by that growth factor:

C = \frac{T}{(1+r)^{n}}

Here C is the Coast FIRE number, r is the expected annual return after inflation (as a decimal), and n is the number of years until retirement, n = \text{retire\_age} - \text{age}.

One point about the return. If you enter a nominal return of 7% and inflation of 3%, the growth that matters for a target stated in present-day money is the real return. A close approximation is the difference: 7\% - 3\% = 4\%. A more exact figure uses the ratio:

r_{\text{real}} = \frac{1+r_{\text{nom}}}{1+i} - 1

With r_{\text{nom}} = 0.07 and i = 0.03, this gives 1.07 / 1.03 - 1 = 0.0388, or 3.88%. The examples below use 3.88%.

A worked example with the demo numbers

Age 30, retire at 65, spend 40,000

These are the tool's defaults: current age 30, retirement age 65, annual spending 40,000, safe withdrawal rate 4%, nominal return 7%, inflation 3%, current savings 50,000.

Find the full target. At a 4% withdrawal rate, T = 40000 / 0.04 = 1{,}000{,}000.
Find the years to retirement. n = 65 - 30 = 35.
Find the real return. 1.07 / 1.03 - 1 = 0.0388.
Find the growth factor over 35 years. 1.0388^{35} = 3.777.
Discount the target. C = 1{,}000{,}000 / 3.777 = 264{,}800.

So the Coast FIRE number is about 264,800 in present-day money. Current savings are 50,000, which is roughly 19% of the way there. You have not reached Coast FIRE yet, but the gap is a fraction of the full million.

Check the direction: 50,000 growing at 3.88% real for 35 years reaches 50000 \times 3.777 = 188{,}900, well short of a million. That confirms more saving is needed.

To see when your current savings alone would coast, solve for the years needed: n = \ln(T/C_{\text{now}}) / \ln(1+r). With 50,000 and a million target at 3.88%, that is \ln(20)/\ln(1.0388) = 78.7 years. Far too long, which again says 50,000 is not enough this early.

How the Coast number shrinks with time

The Coast number is small when retirement is far away and rises as it approaches. At retirement age itself the Coast number equals the full target, because there is no time left for growth. The table shows the Coast number for the demo target of 1,000,000 at a 3.88% real return, for someone retiring at 65.

Coast FIRE number by current age, target 1,000,000, retire at 65, 3.88% real
Current age	Years to 65	Growth factor	Coast number
25	40	4.573	218,700
30	35	3.777	264,800
40	25	2.579	387,800
50	15	1.762	567,600
60	5	1.210	826,300

The curve rises steeply near retirement. The marker at age 30 sits at about 264,800; by age 60 the same target demands roughly 830,000.

Reading and interpreting your result

The tool reports the Coast number and compares it to your current savings. Three outcomes matter.

Below the Coast number: You still need to save. The shortfall tells you how far. In the demo, 50,000 against 264,800 leaves a gap of 214,800 to close through contributions and growth.
At the Coast number: You can stop saving for retirement now and, if the return assumption holds, arrive at your target at 65. Any income you earn from here on only needs to cover current living costs.
Above the Coast number: You have overshot. Extra savings past this point do not change whether you can retire, only when. More saving pulls the retirement date earlier or funds a larger target.

Read the number as a moving target, not a finish line. Every year you do not reach it, the required amount rises, because the table shows the Coast number climbs with age. Reach it once and market returns keep it satisfied only if they match your assumption.

Common mistakes

Mixing nominal and real numbers is the most common error. If you state the target in present-day money but grow your savings at the full nominal 7%, you understate the Coast number badly. At 7% for 35 years the growth factor is 10.68, giving a Coast number of only 93{,}600, versus 264{,}800 at the real 3.88%. Keep both the target and the return in the same terms.

Two more traps. First, trusting a single return figure. At 3% real the demo Coast number is 355{,}000; at 5% real it is 178{,}000. That two-point range spans nearly a factor of two. Treat the result as a band, not a point. Second, forgetting that a 4% withdrawal rate is itself a rule of thumb tied to a 30-year horizon. If you retire at 45 and expect 50 years of withdrawals, a lower rate may be prudent, which raises the target and every Coast number with it.

Related tools on this site

Coast FIRE answers one question. These neighbours answer the others.

To model the balance you actually reach with ongoing contributions and the income it supports, use the Retirement Savings Calculator.
To find your full FIRE number and how many years of saving it takes to get there, use the FIRE Calculator.
To test how long a portfolio survives under inflating withdrawals, use How Long Will My Money Last?.
To value a stream of future payments, or find the payout a lump sum sustains, see the Annuity Value Calculator and the Annuity Payout Calculator.

Frequently asked questions

What is a Coast FIRE number in plain terms?

It is the balance that grows into your retirement target on its own, with no further saving, by the age you plan to retire. In the demo it is about 264,800 for a million-dollar target 35 years out.

Should I use nominal or real returns?

Use the real return if your target is stated in present-day money, which is the usual case. The tool converts your 7% return and 3% inflation into a 3.88% real return before discounting.

Does reaching Coast FIRE mean I can stop working?

No. It means you can stop saving for retirement. You still need income to cover living costs between now and retirement. Coast FIRE frees you from retirement saving, not from earning.

Why does my Coast number keep rising each year?

Because you have fewer years left for growth. At 3.88% real, the demo number climbs from 264,800 at 30 to 387,800 at 40. Reaching it sooner means chasing a smaller figure.

How sensitive is the result to the return rate?

Very. Over 35 years, moving the real return from 3% to 5% cuts the demo Coast number from 355,000 to 178,000. Always view the answer as a range.

Try it yourself in the tool