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Coast FIRE: Easiest Path To Financial Independence

CoastFIRE is one of several types of Financial Independence Retire Early (FIRE).  Coast FIRE is defined as having enough money invested early in life to stop contributions and still cover a traditional retirement.  This allows you to work only to cover current expenses.

Let’s explore CoastFIRE as an alternative route to regular financial independence retire early (FIRE) and see if it’s right for you.


What is Coast FIRE?

Coast FIRE is when you aim to invest enough money to let it grow without any further contributions and have that money be sufficient to cover a traditional retirement.  This growth would come from capital gains and dividend reinvestments. 

Since you don’t need to contribute towards retirement, you could then switch to a part-time job to cover your current expenses.  At that point, you would be “coasting” towards financial independence.

This type of FIRE appeals to a lot of people because you don’t have to save up as much money.  CoastFIRE allows you to switch to a part-time job much earlier and not wait until you have accumulated 25x your yearly expenses like traditional FIRE.


Calculating Coast FIRE

To calculate Coast FIRE you need to know how much money you would need for traditional retirement.   If in retirement you anticipate having yearly expenses of $40,000/year, then you would have to save $1 million.  This is based on a traditional route to FIRE (25x Rule Of Retirement).

FIRE Number = 25x (Yearly Expenses)

However, for CoastFIRE you don’t have to wait until you reach $1 million.  You can invest $90,000 at an early age and let it grow to $1 million using compound interest.  The money will be there for you once you retire even without any additional contributions.

Here is what it would look like if you had $90,000 invested by the age of 30 and you wanted to retire at 65 years old: (assuming a 7% return)

Coast FIRE Calculation

Letting $90,000 compound over 35 years at a 7% average yearly return would give you $1 million!  This is why compound interest is the 8th wonder of the world. 

So in this example, you could stop making contributions at the age of 30 and only worry about your current expenses.  This allows you to design a lifestyle in which you work less or spend more now.  You could have more money and time for family, friends, and adventures.  That is the appeal of CoastFIRE.


Your Coast FIRE Number

Your Coast FIRE number or the amount will depend on two factors:

  1. Yearly Expenses
  2. Time Until Retirement

Knowing how much you spend in a typical year is the first step to calculating your Coast FIRE Number. 

I Use Personal Capital To Track My Expenses   

The next step is figuring out how much time you have until you would like to retire.  If you are 30 years old and would like to retire at 65, then you would have 35 years until retirement.  Now we can calculate our Coast FIRE Number:

Coast FIRE Number = (Yearly Expenses x 25) ÷ (X)

X Depends On Your Time Until Retirement

Coast FIRE FormulaHere Is An Example: 

  • Yearly Expenses ($40,000)
  • Time Until Retirement (35 Years)
  • X = 11.5

CoastFI Number = ($40,000 x 25) ÷ (11.5)

CoastFI Number = ~ $87,000

The Coast FIRE Formula gives us our Coast FIRE Number of $87,000.  Now we use the FIRE calculator to find out when we will reach this amount.  It will be much faster than regular FIRE.

Download The Free FIRE Calculator Here

Using my FIRE calculator helps you find out how long it will take to reach your CoastFIRE amount.  The FIRE Calculator accounts for how much you’ve saved and the amount you are currently contributing.  It shows your progress year by year, so you can easily identify when you would arrive at Coast FIRE. 

CoastFIRE Example

In this example, it would take 16 years to accumulate $1 million and achieve Traditional FIRE. 

However, that same person would reach CoastFIRE in only 2 to 3 years!  That is a full 13 years before Traditional FIRE.


Benefits of Coast FIRE

Freedom To Design Your Lifestyle

Coast FIRE gives you the freedom to switch jobs or to part-time work much faster than traditional FIRE.  If you are miserable at work, then pursuing Coast FIRE can help you live a happier lifestyle sooner.

Easiest Path To Financial Independence

Coast FIRE is also the easiest path to financial independence.  As the example above showed, it took less than 3 years to reach CoastFIRE.  The majority of the $1 million was compound interest working for you.  The advantage with CoastFIRE is allowing compound interest to do the heavy lifting.  When using this type of FIRE, time works in your favor.  The earlier you start the easier it is to achieve Coast FIRE!

Keeps You Engaged

Lastly, by continuing to work, this type of financial independence appeals to those who are not looking for a fully retired lifestyle.  Perhaps, you enjoy work, just not working for 40 hours a week.  It’s also possible you envision getting bored with early retirement.

If switching to part-time work appeals more than completely retiring, CoastFIRE might be the right FIRE path for you. 

The good news is you can always change your mind later and pursue traditional FIRE.  Regardless, it’s important to think about this early on in your journey and make adjustments as needed.


Different Types Of FIRE

The Financial Independence Retire Early (FIRE) movement is growing and now has many types of FIRE.  Here are the different types of FIRE in order from easiest to hardest to achieve: 

  • CoastFIRE (Coast FIRE)
  • BaristaFIRE (Barista FIRE)
  • LeanFIRE (Lean FIRE)
  • TraditionalFIRE
  • FatFIRE (Fat FIRE)

Each type of FIRE has its pros and cons and comes down to balancing money and work.  

  • Coast FIRE is accumulating enough money to stop contributing and still reach FIRE in the future
  • Barista FIRE is having enough money to retire early, while still working a part-time job for additional income and health insurance
  • Lean FIRE is the minimalist way of reaching FIRE and means retiring with a “lean” budget
  • Traditional FIRE is accumulating 25 times your annual expenses and retiring early using the 4% rule
  • Fat FIRE is early retirement without embracing frugality and choosing to accumulate a bigger nest egg.

Having these options for FIRE gives us options to pursue the type that best matches our lifestyle goals.

Barista FIRE: Everything You Need To Know

Here Is An Illustration I Made To Help Remember The Different Types Of FIRE:

5 Types Of FIRE Graphic

Negatives of Coast FIRE

A clear negative of Coast FIRE is the need to continue working and depending on an employer for income.  Coast FIRE is not for those who want F-You Money or to design a self-reliant lifestyle.

CoastFIRE also relies on sticking to a budget and embracing some form of frugality.  If you prefer to live budget free or anticipate increased expenses in the future, CoastFIRE might not be the best option.


Coast FIRE Financial Independence

As you can see, you can reach FIRE in a variety of ways.  Coast FIRE is by far the easiest path to financial independence.  This can be used as a motivational milestone to keep you motivated to continue towards harder types of FIRE. 

Alternatively, if you enjoy your job, achieving CoastFIRE by switching from full-time to part-time might be the best option.  You can still enjoy the same lifestyle and declare you’ve reached CoastFIRE in only a few years.


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This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

This Post Has 2 Comments

  1. KGin

    Your example is misleading because it doesn’t account for expenses nominally increasing with inflation. If your FIRE number today is $1M, it will be much greater than $1M in 35 years.

    1. Mr Inspire To FIRE

      Thank you for the comment! I agree the 1M dollar FIRE number would be greater in 35 years however for simplicity sake I ignored inflation. If inflation is a concern you can always add a little more to your target FIRE number.

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