What is Coast FIRE?

Most people treat retirement saving as a switch with two settings: saving, or retired. Coast FIRE is the setting in between, and it shows up far earlier than either of the other two.

You reach it the day your invested balance is large enough that compounding alone carries it to your retirement number by the age you picked. From then on, every dollar you earn only has to cover this year. Nothing has to be set aside for the one in 2055.

The calculation

Take your retirement target, then discount it back to today at whatever real return you expect. In plain terms, divide the target by 1.05 once for every year between now and retirement, assuming a 5% real return.

A 35 year old with a $1.5 million target at 65 has 30 years of growth ahead. $1.5 million divided by 1.05 thirty times is about $347,000. Hit $347,000 and the plan finishes itself.

$1.5 million target at 65, 5% real return, no further contributions.

Look at the spread. The 30 year old needs $272,000. The 50 year old needs $722,000 for the same retirement. Fifteen years of runway is worth roughly $450,000 of savings, which is the clearest argument for early contributions anybody has ever put in a table.

What it actually buys you

The money does not change on the day you hit it. Your options do.

A household saving $30,000 a year needs $30,000 a year less in income once the saving stops. That is a pay cut you can absorb on purpose. It buys a job you prefer, a four day week, a move to somewhere cheaper, or a year off that does not cost you the retirement date.

It also removes the worst part of a long savings plan, which is the feeling that stopping even briefly sets everything back. Once you have coasted, a gap year is a gap year. It is not a delay.

Where the plan breaks

Coast FIRE rests entirely on compounding, so anything that interferes with compounding hits harder here than in a plan that keeps contributing.

Weak real returns. Take the 35 year old in that table and give the first decade 2% real instead of 5%. The balance lands near $1.12 million at 65 rather than $1.5 million, so the plan is close to $375,000 short. A saver who kept contributing would have filled part of that without noticing. A coaster has no such buffer.

Spending drift. The target was set against your budget at the time you coasted. Stop saving, and the money that used to leave your account every month is suddenly available. If your spending rises to meet it, the target rises too, and nobody updates the spreadsheet.

Touching the balance. The plan assumes that money is untouched for decades. A car, a roof or a bad year that comes out of the invested balance does not just cost you the withdrawal. It costs you every year of growth that withdrawal would have earned.

Coast against the other variants

Coast FIRE is the earliest milestone on the list, which is why it is the one most people should aim at first. Barista FIRE comes next: there the portfolio covers most of your spending and part-time work covers the rest. Lean FIRE and Fat FIRE are full independence at two very different budgets. Full FIRE is the far end.

The honest reason Coast deserves the attention is that a 50% savings rate is out of reach for a lot of households and a Coast number is not. It is a goal you can hit on a normal salary in your thirties.

Check it once a year

Coasting is not fire and forget. Once a year, take your current balance, your current spending and the years left, and confirm the plan still lands. Two things move: markets, and your budget. Both are worth ten minutes each January.

If the check comes back short, the fix is small when you catch it early. A couple of years of partial contributions puts most plans back on track. Left for a decade, the fix is a different retirement date.