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“Can you write an article about Coast FIRE?”
When I first read this in my inbox, I thought Coast FIRE had something to do with moving to the west coast, sitting on a beach, and sipping Mai Tai’s.
But after some research, it turns out Coast FIRE means “coasting to FIRE,” so basically the idea that if you save enough in your 20s or 30s, you can theoretically stop investing and let time and the stock market slowly reach FI for you.
For example, instead of saving 50% of your income to reach FI in 10-15 years at any age, you save $130,103.22 by age 30, stop investing, and leave it to grow to 1 million by age 65, like this…
| age | Starting | Contributions | ROI (6%) | End of the Year Total |
| 30 | 130,105.22 | $0.00 | $7,806.31 | $137,911.53 |
| 31 | $137,911.53 | $0.00 | $8,274.69 | $146,186.23 |
| 32 | $146,186.23 | $0.00 | $8,771.17 | $154,957.40 |
| 33 | $154,957.40 | $0.00 | $9,297.44 | $164,254.84 |
| 34 | $164,254.84 | $0.00 | $9,855.29 | $174,110.13 |
| 35 | $174,110.13 | $0.00 | $10,446.61 | $184,556.74 |
| 36 | $184,556.74 | $0.00 | $11,073.40 | $195,630.15 |
| 37 | $195,630.15 | $0.00 | $11,737.81 | $207,367.95 |
| 38 | $207,367.95 | $0.00 | $12,442.08 | $219,810.03 |
| 39 | $219,810.03 | $0.00 | $13,188.60 | $232,998.63 |
| 40 | $232,998.63 | $0.00 | $13,979.92 | $246,978.55 |
| 41 | $246,978.55 | $0.00 | $14,818.71 | $261,797.26 |
| 42 | $261,797.26 | $0.00 | $15,707.84 | $277,505.10 |
| 43 | $277,505.10 | $0.00 | $16,650.31 | $294,155.41 |
| 44 | $294,155.41 | $0.00 | $17,649.32 | $311,804.73 |
| 45 | $311,804.73 | $0.00 | $18,708.28 | $330,513.01 |
| 46 | $330,513.01 | $0.00 | $19,830.78 | $350,343.80 |
| 47 | $350,343.80 | $0.00 | $21,020.63 | $371,364.42 |
| 48 | $371,364.42 | $0.00 | $22,281.87 | $393,646.29 |
| 49 | $393,646.29 | $0.00 | $23,618.78 | $417,265.07 |
| 50 | $417,265.07 | $0.00 | $25,035.90 | $442,300.97 |
| 51 | $442,300.97 | $0.00 | $26,538.06 | $468,839.03 |
| 52 | $468,839.03 | $0.00 | $28,130.34 | $496,969.37 |
| 53 | $496,969.37 | $0.00 | $29,818.16 | $526,787.53 |
| 54 | $526,787.53 | $0.00 | $31,607.25 | $558,394.78 |
| 55 | $558,394.78 | $0.00 | $33,503.69 | $591,898.47 |
| 56 | $591,898.47 | $0.00 | $35,513.91 | $627,412.38 |
| 57 | $627,412.38 | $0.00 | $37,644.74 | $665,057.12 |
| 58 | $665,057.12 | $0.00 | $39,903.43 | $704,960.55 |
| 59 | $704,960.55 | $0.00 | $42,297.63 | $747,258.18 |
| 60 | $747,258.18 | $0.00 | $44,835.49 | $792,093.67 |
| 61 | $792,093.67 | $0.00 | $47,525.62 | $839,619.29 |
| 62 | $839,619.29 | $0.00 | $50,377.16 | $889,996.45 |
| 63 | $889,996.45 | $0.00 | $53,399.79 | $943,396.24 |
| 64 | $943,396.24 | $0.00 | $56,603.77 | $1,000,000.01 |
(note: in this scenario, we’re assuming a 6% return, after adjusting for inflation.)
Now, if you’re like me, you might be wondering how Coast FIRE differs from plain old vanilla “regular retirement”? Well, it’s similar in that both aim for retirement at 65. The difference is regular retirement requires you to invest a fixed amount every year throughout your working life. Coast FIRE requires you to reach a threshold portfolio size as early as possible, then hit the brakes and let time do the work for you. So, in other words, you are front-loading your savings when you’re young.
Sounds great right? I mean, what could be more appealing than the lazy way to FI?
I can see why this would be appealing to many people. But does it make sense?
Let’s look at some pros and cons of this idea:
Pros:
1. It’s More Attainable
I’ve heard 50-70% power saving to FI path described as a “death march”. This is because some people don’t like the idea of killing yourself by working 60-80 hours weeks for 10-15 years, as a trade-off for freedom for the remaining 40-50 years.
If you have a job you hate, just toughing it out for 5 years seems impossible, never mind for the next 10-15.
In that sense, Coast FIRE seems more attainable since you only have to get to $100-200K in your 20s or 30s, take your foot of the gas, get a lower paying job that only covers your expenses, and then work this less stressful job until 65.
Or for those with lower salaries, this is a much more attainable goal, because it’s easier to fathom saving $100K-200K than $500K-$1M.
Coast FIRE seems less scary and more attainable than saving 50% of your salary and reaching full FIRE in your 30s or 40s.
2. You Can Be More Aggressive with Your Allocation
Because you’re letting time and the magic of compounding do the work for you, you’re looking at an investment horizon of 30+ years instead of 10-15. Since you’re not planning to withdraw from your portfolio at all, you can theoretically dial up your risk all the way to 90% or even 100% equities and not have to worry about selling during a bear market.
3. Age Is an Unfair Advantage
If you’re young and in your 20s or early thirties (damn you and your stupid youthful glow!), then you have a huge advantage over those who learned about this investing stuff later on in life. Because time is on your side, you have a long-ass 30+ year runway to get the stock market to do the heavy lifting for you.
Older people who don’t have a time machine won’t have your advantage and will have to save way more to reach the same finish line—$1M by age 65.
Pat yourself on the back and go buy yourself some avocado toast or watch a TikTok video, you win just by being young!
Cons:
1. FI # is Not Calculated Based on Your Savings Rate
I always found the idea of aiming for $1 million by age 65 arbitrary. If you don’t know what your spending rate is, then how do you know that will be enough to cover your expenses at 65?
Let’s say you net $60,000/year starting at age 26. With a savings rate of 54%, you amass a portfolio size of $130,000 by 30. At this point, your savings rate drops to 0%, you spend the entire $60,000 of earnings every year and coast until 65 to end up with a $1 Million portfolio. But by then, you’d have to go from spending $60,000/year down to $40,000/year at 65 in order live off the $1 million. You’d be short $20,000/year unless you can immediately rein in your spending, which after decades at that level of spending, I’m not sure you can.
Since the Coast FIRE formula isn’t using your spending level to calculate your FI number, you’re pretty much guessing how much you need by 65.
2. You Can’t Re-Adjust
Unlike normal FIRE where you can calculate your success rate each year and adjust your spending and investment allocation accordingly, Coast FIRE is a fire-and-forget system, where you assume your spending level 30 years in the without ever experiencing what’s it’s like to live on it. And if you find out when you get there that you did your math wrong, it’s much harder to correct.
Think of it this way. We like to think of Financial Independence as a suit of armour. Once you reach FI, you’re invincible to job loss. As a result, I can finally take the risky path of becoming an author because even if I earn nothing from my passion, my suit of armor protects me against any loss of income (and trust me, when it comes to arts, there are plenty of expected losses).
Since full FI might be too much of a lofty goal for some, they become partial FI instead, building a portfolio big enough to support half of their expenses, and having their passion projects cover the other half. That’s like having a partial armor. You might have the helmet to protect you, but your arms and legs are still exposed.
Coast FIRE is like hiring a blacksmith to build the armor slowly over 30 years without ever trying on the finished product. So, in that sense, it’s quite risky because you have no idea if the armor will even fit.
Here’s another way to look at it. FIRE is a missile. You can change course each year to make sure you reach the target at the end. Coast FIRE is a bullet, you only get one chance to fire (pun intended) the gun, but once the bullet is out of the chamber, there’s no course correcting. You better be sure when you reach 65 that the FI number you predicted 30 years ago is correct.
3. Age Is an Unfair Advantage
In the advantages above, I said that being young is a huge advantage for Coast FIRE. But the flip side to this is that if you don’t have time on your side, Coast FIRE doesn’t work.
What if you are in a field that takes a while to get going like medicine? You might not even get out of school by 35. When you finally have a good salary, pay off your massive student loans, and build a decent-sized portfolio, you’ll already be 45! Then your portfolio only has 20 years to compound in the markets. If you started with $200,000 at 45, you’ll only end up with $641,427.09 at 65. You’re better off power saving towards full FI if you’re older because you no longer have the advantage of time in the market to help you out.
4. You’re Still Someone’s Bitch for 30+ years.
Since you’re not withdrawing from your portfolio for 30+ years, you’ll have to rely on a steady paycheck during that time. Layoffs, health issues, and basically anything can happen. Without the portfolio’s passive income to cover at least part of your expenses, you’ll be as much a sitting duck as everyone else because you still need your job right up until the point your retire.
As you can see, Coast FIRE can be very appealing to those with lower salaries, itching to switch jobs, or are young enough for me to hate them.
Given the pros and cons, would I recommend Coast FIRE?
Coast FIRE, to me is a psychological payoff rather than a logical one. It’s way better than not saving towards retirement at all. Plus, it’s more attainable for those with lower salaries. But it has as many pitfalls and risks. And most importantly, Coast FIRE can be dangerous if it’s used as an excuse to sit back and relax and spend everything you make just because you reached your “threshold Coast FIRE portfolio number.” Remember, you can always get laid off from work, and without basing your retirement number on your actual spending, you don’t know if this “FI armor” will fit in 30 years without ever trying it on.
If you’re still curious and want to calculate your Coast FIRE number, here’s the formula you can use to calculate the starting portfolio size (P) you need at age A to eventually have a million by 65, assuming a 6% rate of return:
If you generalize this formula, you can plug in your own variables where I is the expected investment return, R is your target retirement age, and A is your current age like so:
For example, if you’re currently 35 years old, and you want to find out the portfolio size needed for Coast FIRE with a 6% real return, to have $1M by age 65:
Here’s a graph of different ages and portfolio sizes needed to reach $1M by 65:
As you can see, the older you are when you start Coast FIRE, the less time you have in the markets to get to Coast FIRE, so the bigger the staring portfolio you need.
To find out how big your portfolio needs to be for Coast FIRE, look for your age in the table below:
| Age | Starting Portfolio |
| 25 | $97,222.19 |
| 26 | $103,055.52 |
| 27 | $109,238.85 |
| 28 | $115,793.18 |
| 29 | $122,740.77 |
| 30 | $130,105.22 |
| 31 | $137,911.53 |
| 32 | $146,186.22 |
| 33 | $154,957.40 |
| 34 | $164,254.84 |
| 35 | $174,110.13 |
| 36 | $184,556.74 |
| 37 | $195,630.14 |
| 38 | $207,367.95 |
| 39 | $219,810.03 |
| 40 | $232,998.63 |
| 41 | $246,978.55 |
| 42 | $261,797.26 |
| 43 | $277,505.10 |
| 44 | $294,155.40 |
| 45 | $311,804.73 |
| 46 | $330,513.01 |
| 47 | $350,343.79 |
| 48 | $371,364.42 |
| 49 | $393,646.28 |
| 50 | $417,265.06 |
| 51 | $442,300.96 |
| 52 | $468,839.02 |
| 53 | $496,969.36 |
| 54 | $526,787.53 |
| 55 | $558,394.78 |
| 56 | $591,898.46 |
| 57 | $627,412.37 |
| 58 | $665,057.11 |
| 59 | $704,960.54 |
| 60 | $747,258.17 |
What do you think? Is Coast FIRE for you?
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This is the first time I’ve ever read one of your articles that I have no reaction whatsoever. I guess I have to ponder this one. 🤦😎
LOL. Guess Coast FIRE is not for you then 🙂
Honestly, I think you’ve completely misunderstood the concept of coast FIRE.
The idea is that once you’ve done the heavy lifting, you don’t need that (in your example) $60k job anymore. You just need one that covers your expenses.
So, rather than spend the entire $60k per year from your old job, you’re free to work a lower paying job that you enjoy more. Or work fewer hours at a similar job. Your biggest argument against coast fire is that someone won’t be easily able to switch to a $40K lifestyle if they’re used to a $60k one for decades, when it’s equally possible that they already switched to a $40k low stress job and have been happily living that lifestyle the entire time they were coasting.
That’s why it’s called COAST – it’s like riding a bicycle. You peddle up the hill really hard and then you get to coast downwards with VERY LITTLE EFFORT but you still have to give the ride your full attention to avoid disaster.
Definitely. I think David here pretty much sum it up what CoastFI means.
It never was ‘spending everything you earn while you are working same full time and retire at 65’.
Well said and agree David. While we’re personally team FIRE vs CoastFIRE, this is exactly what coasting is all about. For those that do understand CoastFIRE, you understand you get to switch to a part time role, or a less stressful job, or go after your own pursuits as a freelancer or whatever during those gap years while making it to traditional retirement age. It’s not to save, then keep working that same job and spend 100% of that original income where you were getting to your CoastFIRE goal.
You could decided not to spend 100% of your savings and continue putting money towards your portfolio, but how’s that the different from regular retirement? I suppose you could continue putting in money after you reach the “coast FI number”, in order to get to FI faster than 65, then it would be safer than waiting until 65.
However, what’s stopping someone from saying they’re “coast FIRE”, not bothering to save anymore, and then expecting to magically be able to live off the portfolio at 65? My point is the danger is that people could use that as an excuse to stop saving completely once they hit their Coast FIRE number. If you choose to continue saving, then good for you.
RE: “You could decided not to spend 100% of your savings and continue putting money towards your portfolio, but how’s that the different from regular retirement? I suppose you could continue putting in money after you reach the “coast FI number”, in order to get to FI faster than 65, then it would be safer than waiting until 65.
However, what’s stopping someone from saying they’re “coast FIRE”, not bothering to save anymore, and then expecting to magically be able to live off the portfolio at 65? My point is the danger is that people could use that as an excuse to stop saving completely once they hit their Coast FIRE number. If you choose to continue saving, then good for you.”
I still feel you really don’t understand Coast FIRE.
Let’s say that I work in a brutally stressful job that I’ve grown to hate. I’ve saved $500,000 and my FIRE needs are $40k, so I need a $1,000,000 portfolio if I’m planning on the 4% rule as my withdrawal guideline. But I just can’t stomach working that job or one like it any more.
I’ve already cut my spending to my planned $40k FIRE spending level and I’m happy with it.
So, I need a job that pays my $40k expenses until my $500,000 stash grows to $1,000,000.
At the historical US stock market growth rate, it will take a bit over 10 years for that stash to double in today’s dollars.
I don’t need to be a hard-charger at work in order to FIRE in about 10 years. All I need to do is just enough work to keep a job that pays me $40k a year, and keep my spending in line with my budget.
I’m letting my $500k stash and time do the rest of the heavy lifting — I’ll be coasting along in my low stress, lower paid job.
THAT’s Coast FIRE.
As to your question, what’s going to stop people from doing a really bad job on their FIRE math or just lying to themselves about their retirement preparations? Not a thing. Nor is there anything preventing them from those same mistakes using any the traditional FIRE method either. After reading people’s comments on FIRE for the last 9 years, I can assure you there’s no shortage of people who can’t properly calculate their net worth, or think the equity in the house they live in and won’t sell counts as part of their FIRE stash, or any of a host of other complete failures to get the important details.
Your comments are spot on David.
I consider myself coast fire. I’m 40 have a paid off rental property and a paid off property I live in vancouver. My wife and I have about 1.3 mil invested in a 70/30 portfolio as well. I consider myself coast fire because I no longer work and I no longer contribute to rrsps so my retirement fund is now set it and rebalance. I plan to have a traditional retirement at age 65, but will live off rental income and other investments until then. To me that is coast fire. There is obviously a huge difference difference to the example shown in this article.
I can relate with this. We have a similar scenario but not sure it will be called coast FIRE. IT is probably FIRE or chubby FIRE since you no longer work.
Since you can live on your real estate income, you’re actually FI already from real estate investment, the additional money from the portfolio is just bonus money.
Yeah, that’s our plan in a nutshell.
• Pay off house in 2030, GTFO the rat race
• $2970 monthly spending (no mortgage) requires $891,000 invested
• Current progress to goal: 78.6%
Given that our invested funds have been growing by $150k+ every year for the last three years, we have no concerns about hitting that goal almost nine years from now. So in a couple years I go half-time consultant at my existing job, my wife goes 60% at hers and maintains health insurance, we get four-day weekends together while letting our existing money compound, and we still end up like $300k ahead of target by the time we’re 50 and 48.
A modicum of extra effort (and/or selling this place and moving to northeastern Spain) would see us fully “retire” much earlier… but we love our house and our neighborhood too much to cash out and run.
You’re actually aiming for full FI, just do it in a more relaxed way 🙂 Congrats on being 78.6% of the way there! You’re very close!
Never herd of it, but it doesn’t make much sense to me.
I can’t imagine a person who is able to understand the math, get the right job and save and invest the right amounts for COAST FIRE, who is then, after a few years, will just switch gears.
Once you see your portfolio grow and getting closer, why not just keep going?
I guess this is one of those cases where different people chase FIRE for different reasons. If your reasons are in the “pro” side of the article, then maybe it can work for you, but I see more in the “con”.
David Wendelken (the comment above) explained well why one of the “cons” is not well explained, and I agree with him. For someone who just want’s to throttle down and coast for 30 years it might work.
However, the main pull of FIRE to me is the “fuck you” aspect, the not having to worry about my boss, about vacation, about sick days etc. For people who come from this mindset, any job, even less stressful one, is still a bit of a cage…
However, the main pull of FIRE to me is the “fuck you” aspect, the not having to worry about my boss, about vacation, about sick days etc. For people who come from this mindset, any job, even less stressful one, is still a bit of a cage…
AMEN
I’m coasting, so I’ll quickly describe my path as an example:
Software dev approaching 40 with good spending/saving habits, index portfolio doing well but mostly in tax advantages accounts, side investments also taking off but not ready to draw on, partner still working full time in hcol city (separate finances).
I take a redundancy from my high salary job, but I’ve been ‘done’ with the BS for a while and don’t feel like seeking out a direct replacement. Instead, I look at my portfolio and realize it doesn’t matter if I add to it. It’s already taken off and will easily support me in another 5-10 years if I let it grow, or I could start drawing now, but it would mean reducing spending in ways that aren’t compatible with where we live right now. And frankly, I don’t trust that I won’t want to spend a bit more, so I’d rather let it grow.
I do the math and realize I could work 2 hours/day at market rate and cover my existing expenses AND I could go back to coding, which is what I actually enjoyed about my job prior to being forced into management. Doing that going on 4 years now. Portfolio has more than doubled, and I haven’t had to touch it. I take the occasional contract that generates enough cash to do extra fun stuff, but never let my base lifestyle creep. I have all the time I want to explore hobbies and interests while I’m relatively young. I FEEL retired, even though I’m working about 1/3 full time.
That is coasting to me.
“For people who come from this mindset, any job, even less stressful one, is still a bit of a cage.”
That’s probably true. Maybe what will happen people will either want to go to full FI and stop completely, or switch to a less stressful job and continue working to FI but slowly. Just giving up completely and saving 0% is probably not likely. So in that case, CoastFIRE is actually more like a stage of FI, rather than an end goal.
My husband and I understand the math, have the right jobs, saved and invested the right amounts and then switched gears.
I think the important difference, though, is that both of us like our (healthcare) jobs, we just didn’t like working full time. We’re in our late 30s and are 70% to our full FIRE number after saving 40-50% of our incomes for 10-12 years. We had been planning to “retire” when we were 40, but realized we 1. didn’t necessarily want to stop working completely, because we didn’t hate our jobs (just the hours) and 2. would really like to be able to spend more time with our small children now. We’ve been able to do both of those things (and it’s lovely!). We both work 16-20 hours a week now, which pays for our living expenses, we spend lots more time with our kids (and have no childcare expenses), and I really like going to work twice a week.
Thanks for your perspective Kelly.
I actually kind of agree, or feel similar for myself.
I am a healthcare worker myself and really like going to work, and I can see myself doing the same.
My wife, on the other hand, is a professional working in a major university in a super-stressful environment and role. For her, dropping hours won’t relieve much stress.
So I do totally see some benefits for both. Reading the comments come in after my initial comment did sway me a bit to see the benefits of coasting and how it can work fine for the right circumstances.
Hi and Greetings from Germany: Thank you for the nice article! There are probably two other Con’s for CoastFIRE: The “savings habit” which is a reason for the success of almost all FIRE people in the long run before and after reaching FIRE is not really cultivated. You spend all your money after reaching CoastFI … which is later hard to re-learn after a 35 year or so pause 😉
What if the market is not producing the returns you’re expecting? Hard to save more money after a decade or so flat stock market (like in the 70’s until early 80’s) when you didn’t put money in every month/year etc.
Thanks again for the great website and your book – kind regards
Anthony
Hello Anthony from Germany 🙂 I also think that the discipline of being able to save for a long time is a vital skill. It’s not about “getting to FI”, it’s about “becoming FI”. Being able to keep your costs consistent is what will save you during inevitable dips in the market, especially after retirement.
Another scenario where I can see this may be attractive is for people who plan on starting a family in their 30s or so– save up a bulk of retirement savings early when you have fewer responsibilities, so that when you start a family, you can funnel the percent of income that was going into savings into expenses for raising kids. Or changing jobs so you can have more time for family? Presumably by 65, those kids will be well on their way to taking care of themselves, so your cost of living will decrease, and you’ve let the market do a lot of the heavy lifting for you. It still does have risk in assuming what you need by 65, but if people find their portfolio is lagging behind projections, they can still contribute additional money.
This is our (34M, 34F) situation. Our NW just hit USD 1 million (250k in home equity). So far, we dont want kids, but if we do…we will have them at age 40. By then, we hope to reach 3 mill NW. At that point, it will be ideal to have a kid and take a part time job or a low stress job that is just enough to pay the bills without touching savings.
True, it definitely helps to save early on when you don’t have dependents. I’m hoping people who hop on the “Coast FIRE” band wagon use it more of a “stage to FI” rather than an excuse to never have to save money again.
I love the analysis, but I think Coast FIRE is really more comparable to traditional retirement savings vs “regular” FIRE. I would love to see a comparison of Coast FIRE vs traditional retirement (saving 10-15% every year until retirement), I feel like that’s the market more so than “normal” FIRE.
That’s an interesting suggestion. Thanks! Will add that to my queue of future articles.
I also see it as closer to traditional retirement. Another way to look at it after reading the comments is to see it as “stage towards reaching FI”. Once you reach Coast FIRE, you don’t give up and spending all your income, but continue working towards FI before age 65, just at a slower pace.
As we all know, FI/RE is a different for all of us. I agree that Coast FI could be considered a ‘stage’ of the journey. The Fioneers wrote pretty extensively about this and I like this article https://thefioneers.com/design-your-life/. About halfway down she has a good graphic that sums up her version of the stages of FIRE. Being Coast FI myself, I have definitely switched gears and now control my time. Having that choice is really the ultimate goal of FIRE anyway. I don’t get too rigid with the numbers, we all should plan that our plan probably won’t go to plan.
Haha! “You’re still someone’s bitch.” Now that is funny. I think I might be on coast fire. I’ve had some what people might think is easy or fun part time jobs. Whether you’re a tour guide or cashier at a grocery store or really any job, you’re still reporting to someone, you’re still often dealing with difficult customers etc. It’s not corporate stress but like you said you’re still someone’s bitch.
If you could have some kind of entrepreneurial gig, coast fire would be a lot better. It could be a great option for some people.
Great point, Kara. No matter how great the job is, you’re still susceptible to lay offs and shitty parts of the job you don’t want to deal with. Being an author for me is a dream come true, but I’m so glad I’m not relying on it for an income. There are still parts of it I hate doing (reading long ass contracts, endless rounds of edits, etc).
once you reach coastFI, you can let off some gas. I am going to use this an opportunity to start enjoying the fruits of my labor. I can learn to start spending (some) and not just save save save like previous years. I view it as my transition phase into full FIRE- I also believe I will utilize barista fire too until I can finally quit entirely.
“I view it as my transition phase into full FIRE”
Great way to see it, Melissa. I’m glad you are continuing to work towards full FI 🙂
I strongly considered this at one point – I was living in Houston, hated it (duh), and looked into moving to Denver and starting over. The problem was that I would have to give up a VP level position for something entry level or a McJob which would have required at least an additional 5 – 10 years “being someone’s bitch” before obtaining the glorious FU Money. That is A LOT of time. I decided to suck it up and stayed put – Big Suck for 2 yrs vs Little Suck for 10? Easy call.
BTW this reminded me of when I took my Houston gf to the company holiday party. She asked “I’ve been talking to your employees and they all have 4000 sf houses and drive brand new Range Rovers. How come you live in a one bedroom apartment and drive a 10 year old car?” I said “Because I’m going to retire in 2 years, and they never will.” #winning
Annnnddddd Range Rovers really suck. One of the least reliable vehicles out there…..
Audi, Mercedes and BMWs SUVs etc are popular here … 🙂 Beijing, China
I like the Buick -Envision or Ford Edge Titanium hmmm maybe the Mercedes GLC Long (300) etc … What do you like?
“5 – 10 years “being someone’s bitch” before obtaining the glorious FU Money. ”
“Big Suck for 2 yrs vs Little Suck for 10?”
Hahaha, I love the way you put it, Lance. Well done, you magnificent savings fiend! *winning five*
Thanks! I’m certainly not for everyone but I think you and I have similar senses of humor. BTW, I’m the Lance of Lance and Amy and we are buddies with Alan and Katie – isn’t it a small world?
Coast does make sense, especially if you really hate your job(s), but my guess is that in practice, once a person manages to accumulate $200K-ish, it goes one of two ways: Some will decide to empty their 401K’s (and take the tax hit) and use the money for a large down payment on a house, thus locking themselves into a bitter life of servitude. Others will be so incredibly excited about having saved so much that they go balls to the walls all-in on FIRE, and they’re done and fully retired a few years later.
Haha. Sad but true. The pessimist in me is thinking that most will go the “blow it all on a house” route rather than the “ball to the walls all-in on FIRE” route. I really hope I’m wrong though.
We consider ourselves coast FI in a scenario that you don’t mention.
I am self employed and my husband is a teacher in Ontario with a DB pension.
We are 40. He cannot touch his pension until he is 50. (It’ll be a reduced pension at that point, but we don’t need the whole thing)
We have run all of the numbers and considered multiple options including:
1- Quitting now, and having him supply teach a few days a week to make up the shortfall until he can draw his pension.
2- Working two more years at our current savings rate to add enough cash reserves to cover the pension amount for the intervening years.
He has decided that if he needs to supply teach he might as well just teach. He enjoys it, and the hours can’t be beat.
So- where does that leave us, since our savings rate is very high? Well, as a self employed creative, my income has gone down almost every year for 15+ years. I take the jobs that come my way, but I don’t hustle up extra business, or advertise. I consider myself to be slowly semi-retiring a little at a time. (I also like my job and love the flexibility I have to work when I want).
But here’s the big thing- his contract allows him to take unpaid leave. It is done through a payroll deferral program that allows the time off to count towards his pension-able years and keeps his benefits intact. For 4 years he’s been taking home 80% pay, next year he won’t go to work, but he’ll still receive 80% pay. (We did this instead of just self funding a year off for the pension, benefits and because they cannot deny your leave this way- right now with the teacher shortage, he could have been denied a regular unpaid sabbatical year).
So- we are coasting for the next 10 years. We have scaled our long term savings rate back to basically 0, and are setting aside money for 14 months of travel starting in July, and some family gifts instead of adding to our retirement accounts. We’ll do it again once we’re back, so he has less than 9 school years left before retirement, but he’ll work for 6.5 of those. I’ll continue to work as much or as little as I want, and we’ll coast our way to retirement.
This is a great compromise for us. It won’t be a super early FIRE date, but retiring at 50, after 28 months of travelling (and not working at all while we’re on the road), sounds pretty great to us.
ps- this includes owning a small home on a gorgeous piece of property near our families. A location that we’d never be able to rent for any price.
My CoastFI scenario has some similarities to Jackie. My husband and I are in our 40s and are treating CoastFI as a “glide path” to FIRE in our 50s. I’m also self employed while my husband is a FT employee with benefits. This year I reduced my working hours and we’ve also reduced our savings rate. We enjoy working but we’re also able to reap the benefits of having more money and time choices now. We can choose more enjoyable work, and we also discovered that work is more enjoyable just knowing that we have more choices. It’s possible we may not fully FIRE in our 50s if we still like working but it’s great to know we’ll have the option to if we want.
Just curious, did you considered withdrawing from the DB pension (ie. resign from the job) ? The money would be transferred in a locked-in retirement account and it will be managed by you instead of some bureaucrats. But if you feel confident in managing your own money and this is allowed by the pension rules, this could be a great option for you and your husband.
I withdrew my DB pension recently. I had to wait two years after the day I quit. That was February 2020, just before the market crash. Reinvested in April 2020 at the bottom of the market.. This was not planned. Just a lucky move.
But I only worked for the government for 2 years. The pension amount was relatively small compared to the rest of my assets. If the pension amount is larger, it might be more difficult to take this decision.
Anyway. You stay in the plan and follow their rules or you withdraw and make your own rules ? That is up to you ! 😉
We’ve looked at commuting his pension.
There are pros and cons. I actually tried to edit my original post, but it got stuck and wouldn’t save.
A few things- 1. There would be a large portion of it that would remain taxable, since we don’t have room in our RRSPs for the overflow. ie. We wouldn’t get all of it.
2. There rest of the money would have to be put in a LIRA. We wouldn’t easily be able to access this until age 55, so later than the pension. There are also various rules about the amount you can withdraw.
3. His pension is mostly adjusted for inflation. This removes one of the largest risks to our investments for this portion of our future income.
I’m guessing since you were only with your job for 2 years, your pension was quite small and the situation was very different.
We’ve worked through all of the options and we’re very happy with our situation.
If you’ve looked into everything and you choose to keep working, that’s fine with me. This seems like a very relaxed transition into retirement.
I’m sure Jackie is thrilled that you’re fine with her decision. LOL
I’m not fine with her decision. I’m fine she considered all the options, including the one she did not mentionned in her first post. That’s all.
Jackie, my husband and I are considering doing something similar. I’m with the federal government. I can get a full pension at 55, or a reduced pension as early as 50, but the reduction is 5% for every year below 55, so 25% which is a pretty big reduction, plus the loss of the 5 years of pensionable time. If I work until 55 my pension ends up being 50% more. Do teacher’s pensions work the same way? If so, how are you handling the reduction?
He won’t qualify for the maximum pension amount. He won’t have hit his full “85” factor (age and years of service). He’d have to work to 57 to get the full un-reduced pension.
We’ve run all of the numbers, and we know what he will qualify for at age 50 with the clawback. We have enough money in our retirement accounts to make up any shortfall between his pension at age 50 and our desired spending.
Basically, spending-pension, times 25( 4 percent rule)= FIRE number.
We have a fairly large buffer and have zero reason for him to work a day past 50.
Another year of returns like this one and we’ll likely go earlier, and have a few years without any pension income at all until it kicks in.
I agree with david wendelken that I think you missed the point. Imagine if you were making $100k (after taxes) and saving 60%. Once you hit a rough Coast Fire number you can then drop it down to only having to make $40k a year, your target FI number. So if you’re a couple, maybe then one of you works and the other doesn’t (that’s our case). Or both work part time. Or if you have something like rental income coming in to cover part of your expenses, then you take on a freelance job once or twice a year to cover the difference. Or you work one year and take the next year off. Basically it allows for a ton of flexibility now that you know your retirement is already covered and you’re not having to come up with another $60k annually (for FI), or if you’re talking the traditional retirement route, another $10-15k annually (forever).
There’s still the definite need for a “job”, but that job is no longer something you absolutely hate. And that “job” can take many different forms instead of the 9-5 office grind for the next 5-7 years to hit the true FI number. Plus you have the piece of mind that the “saving for retirement” phase of your life is over and that’s now taken care of. It’s just day to day expenses from here on out.
My point is that there is a danger of only reaching Coast FIRE. That people could use it as an excuse to stop saving and be done, since they assume they’ll automatically win when they get to 65. If they choose not to do that, and see it as more of a “stage to FI” and continue to save then they can use it to their benefit.
That still is kind of the point. Say you’ve set aside a portfolio of $600,000 now and you think your FI number will be $1,500,000 and you have 20 years to retirement. You’re looking at overshooting your FI number by nearly 25%. Why keep working those extra hours just to save when you’ve already got the retirement aspect covered?
Like a few other commenter have said already, your first con isn’t necessarily true. Perhaps the person doing Coast FIRE already did their calculations and estimates they’ll be good at 40K per yr. You also didn’t take into consideration that at 65yrs old, you can qualify for CPP, OAS, and depending on which type of accounts you’re drawing down from, maybe even some GIS. Those sources of income shouldn’t be ignored. So they might be truly getting more than 40K in income per yr at that point.
Depends on how much you contribute to CPP. If you get laid off on your way to retiring at 65, you’re not contributing to CPP during that period. And OAS is not a significant amount. It is something that can be added to the FI number at 65, but it all depends on what your expenses are by then, how much you contributed, and what the rules are by then. A lot can change in 30+ years.
Was just pointing out that you didn’t take those numbers into consideration. Or at least chose not to mention them in your article.
And sure, while OAS is “not a significant amount,” an extra ~7k/yr shouldn’t be ignored.
While I agree that Coast FI is much more attainable and psychologically motivating, I also think it doesn’t have to be so black and white. Being coast FI, to me, doesn’t mean that once you hit the threshold, you start spending all your income. Although, theoretically, yes, you can just “cover your expenses” until 65, most people are probably more motivated than that. Our current NW at age 28 is $250K so we are well past Coast FI. However, I do plan to quit my high paying job in July to venture into the entrepreneurial space / remote work. I will continue to invest what I can, but it will obviously be less. I like think the path we are on is somewhere between coast FI and traditional FI.
I hope you’re right Sam. I hope Coast FIRE will be used as a “stage to FI” and everyone will continue saving rather than using it as an excuse to say “I can coast now, no need to save anymore”.
I’m 51 and reached COAST fire in my early 40s. I agree the benefits are mostly psychological. For me, it meant I had a solid safety net under me if I lost my job. I didn’t quit saving for retirement, but it made me relax a little knowing if I didn’t squeeze an extra $1k in savings every year, it wasn’t going to hurt me that much.
My savings rate used to be more like 33%. Now it’s more like 25%. That’s my sweet spot and I’m ok with that.
Good for you, Mysticaltyger. Glad you are continuing to save 🙂 Hope others who reach CoastFIRE will also do the same.
To me the example isn’t FIRE. There is no FI since you have to keep working to make ends meet and there there is no RE since you have to do it to 65 for $1 million. Which isn’t taking into consideration inflation. It is just another way to get to traditional retirement age.
Like others have mentioned, when you have a much higher net worth it is easier to coast and let your assets grow. Even if the lower paying job to cover the nut doesn’t work (or last) you are still FI. You still have your freedom.
Different note…. Read Psychology of Money (Excellent!) and am reading Die with Zero which is a different way of looking at money, time and when to use it. No use having a pot of money and in too bad of shape to enjoy it.
“here there is no RE since you have to do it to 65 for $1 million.”
I have to agree with you there, Scott. If the person doesn’t bother saving anymore and then retires at 65, the RE part of Coast FIRE doesn’t make sense. It only makes sense if they continue working towards FI to RE, but just uses Coast FIRE as a milestone on their way there.
My only criticism of this piece is it’s a little too binary. If you’re saving 20% to 50% of your income for a decade, you’re probably not going to drop your savings rate to zero. But if a 40% or 50% savings rate is too intense for you, maybe you’re going to notch it down to 33% and live a little. Yeah, you’re not going to hit FI as quickly, but if you’re partially FI, you know you can figure it out of you have to.
Well, I do hope people choose the less binary version of reaching their “Coast FIRE” number and then continue saving towards FI, rather than not saving at all. My pt is that it could be used as an excuse to not have to save anymore. Although, if they continue saving after hitting Coast FIRE, is it really coast fire, or just slower path to FIRE? Maybe the goal should be to get to Coast FIRE as a milestone, and then transition to slow FIRE instead of stopping there.
I’m super confused by this article. Where did you learn that Coast FIRE was exactly 1mil at age 65? That is a very mistaken impression. You must still calculate whatever your own FIRE number is and backtrack it into your calculations. I think many articles arbitrarily choose the million dollar mark to illustrate the concept, by its by no means the number that everyone should use. That’s too generic. You have to calculate your own FIRE number and then “coast” to get there. So that would remove many of your “cons” of this strategy, I think you just misunderstood the concept.
Pulled this from a Yahoo article (https://www.yahoo.com/now/coast-fire-retirement-141530637.html):
A Coast FIRE formula for determining how large one’s nest egg must grow would begin with a regular FIRE number (estimated in the example below at 25 times annual spending of $50,000). In the formula below, note that “Years to grow” is an exponent.
25 x $50,000 / (1 + annual growth rate)Years to grow = Coast FIRE number
Suppose someone estimates they need 30 years to reach their Coast FIRE number and an average annual growth rate over those 30 years of 7%. The calculation would then be:
$1,250,000 / (1 + 0.07)30 years = $164,209
In this example, the Coast FIRE number would be $164,209, which would grow over 30 years (given the above-stated estimates) to the target figure (or regular FIRE number) of $1,250,000.
That’s a bit different than what I know.
For me, Coast FIRE is saving up early and then switching gear. This could mean working less, working in a less stressful job, or being your own boss.
After you hit your target, you just need to work enough to support your lifestyle.
This is your spend rate. You can still adjust for changes. If your lifestyle requires more money, then work more and save more.
I think it’s a valid path if you can find work that you enjoy.
In a way, I think many bloggers are doing Coast FIRE. We work just a bit and make enough money to minimizing drawing down our portfolio.
I outlined our situation above, but I think one of the big questions that wasn’t answered in this article is What are you Coasting to- ie. what age.
It doesn’t necessarily mean coasting to 65.
It might mean continuing to work until your kids graduate, and THEN moving out of the country, or in our case the golden handcuffs of my husbands DP pension.
If you have a reason to continue working for a little while longer (and it isn’t tied 100% to your fire number- as in, at this rate we’ll hit our number at X, but I don’t want to make any changes until X+3 for example), you can pump the brakes, lower your savings rate to 0 (possibly/hopefully work less instead of spending more) and wait it out while enjoying the journey.
If you hate what you’re doing, or if you’re so stressed out that you’re making yourself sick, then coasting isn’t for you.
If you have a life you enjoy, why not slow down.? Take a mini retirement, take a few months off, change jobs, go freelance, go part-time, etc. It doesn’t have to be all or nothing.
We are happy to coast. We’ve set our lives up in a way that we enjoy our time and don’t feel stuck.
Hmmm.. I think your 30 years example doesn’t work. It seems more like a “crossing of the ocean to FIRE” than a “coasting to FIRE” example. 😉
Getting from 130K$ to 1M$ imply a 8-fold increase in a portfolio over 30 years !
This is certainly attainable, but so much hasardous to rely only on portfolio returns to get to destination. I would never “plan” for something like that to happen. I think the risk is just to high.
I think “Coast FIRE” can work well for people already close to “full FIRE” (let say, between 70% and 90% of FIRE target), but ready to take a step back during a “transition period”.
For example, if a couple already have 2M$, but wants to retire on 100K$ a year. Using the 4% rule, this would require a 2.5M$ portfolio. Instead, they can live on 80K$ per year for some time (4% of 2M$) and do some consulting work at the same time to generate some income. When their portfolio reach 2.5M$, then they turn to “full FIRE”.
That, to me, look more like an easy boat ride than the one you are describing in your example. In a 30 years period, your boat ride risks going through many storms, seasicks and even complete wreckage. So, why even think about an endeavour like this when it is so risky ?
Just a small note :
Whenever you do math on financials, it’s alway important to take into consideration two fundamental aspect of finances :
1) Uncertainty of future events – calculated through statistics (mean, deviation to the mean, probabilities, distribution of probabilities, etc.)
2) Behavioral economics – math that consider the human brain reaction relative to finances
https://en.wikipedia.org/wiki/Behavioral_economics
I’ve not run throught the whole statistical and behavioural calculations, but I’m quite sure the “human” in your example will have died many times before reaching the “Coast to FIRE”. 🙁
Apart from that, I wish anyone trying Coast FIRE have a enjoyable ride. The markets have been great recently. It will not be always like this. So, have fun while it last !
Being this far off with your interpretation, and more importantly the math of Coast FI makes me question all of your articles and opinions.
You calc your FI number
Use the Rule of 72 to see if you’ll hit that number by X date if you stop contributing to retirement at Y date.
When Y date comes you are now free to “Coast” by no longer contributing to retirement if you choose.
Some options at this point – use contributions for more vacations while you are young and continue working “like a bitch”, or work way less or in a different lower paying field making just enough to cover your annual needs (AKA your annual FI number only, without needing to earn enough to contribute to retirement anymore).
Not hard.
If that math is so easy, what % of return do you use in your Rule of 72 ?
The 10 year bond yield rate at 1.5% and retire in 999 years ?
Or the Tesla yield rate of 2000% last year and retire in 28.15 months ?
Hahaha 😀
“Being this far off with your interpretation, and more importantly the math of Coast FI makes me question all of your articles and opinions.”
No need to be rude here. At least, if you make a comment, try to keep it useful for everyone.
Re: Rule of 72 question = The same rate that you use for your standard FIRE calc. I’d personally suggest 6-7% like most calcs default to. Ie. Average market return minus inflation.
And what if we have hyperinflation ? How does your Rule of 72 work in that case ? (just kidding – not trying to be rude) 😀
Same question (hyperinflation) applies to any FIRE scenario. Any/All FIRE “rules” are “rules of thumb” not solid risk free facts.
So I think it’s same plan as any FIRE. Get a job like everyone else ya’ bums. You know… if you need to at any point.
Like I said, I was just kidding… In hyperinflation, no “rule of thumb” apply. That’s like… the total destruction of the monetary and financial system !
I mean, you can still calculate your “rule of thumb”, but the number it will give you is totally meaningless.
Here for your information :
The Post-World War II hyperinflation of Hungary held the record for the most extreme monthly inflation rate ever – 41.9 quadrillion percent (4.19 × 1016%; 41,900,000,000,000,000%) for July 1946, amounting to prices doubling every 15.3 hours
https://en.wikipedia.org/wiki/Hyperinflation
Coast FIRE sounds like nonsense. So many things can happen from the time you stop contributing to your retirement and your retirement period commencing. It’s like the Lean FIRE gang. Wasn’t it Wanderer who called out the Lean Fire bunch as those who are naked when the tide goes out because they don’t have ample funds when there might be a market downturn and can’t continue to fund their lifestyle? The same appears to be the case for Coast FIRE.
As for quitting your high powered “stressful” job to do something that pays less and is more menial doesn’t make sense either. When I still worked, I can tell you I had zero interest to take a dinky, low wage McJob versus the well paid and stimulating roles I had progressively moved into. If you allow others to stress you out, that’s you stressing out, it’s not the job. The job itself is what you make of it. If there’s stress, you created that for yourself. Don’t blame others for that. I’ve seen plenty people in the same job. Some are super relaxed and others doing the exact same things are having nervous breakdowns. Again, it’s not the job that creates stress, it’s you.
The higher I rose in the ranks, the less stress and more enjoyment I had. The FI component helped with that too until I initiated the RE component and walked away from it all. I get the feeling many of the comments on here and prior blog posts talking about stress on the job just don’t know how to manage themselves and potentially lack perspective (it’s a job – if you lose it, just go get another one – woop dee doo).
Coast FIRE, just like Lean FIRE are individuals who seem to lack patience, perseverance, and are likely running away from something versus towards something. It’s kind of sad.
I have no regrets. And no stress. I kept contributing towards my retirement to my early forties and retired comfortably at that point with a very plump investment portfolio. Do the work, taste the rewards.
Counter point:
Dog walking, Record Store, Skii instructor, whatever you may get enjoyment out of or that strikes your fancy. Maybe start your own business with the other half of your time that may grow into something that replaces the main job?
Working at same job but part time. Enjoy more time now and you can always ramp back up if the tide goes out.
It’s about options. Not a death march.
Of course that’s my opinion. I’m comfortably retired at a young age. You’re not. Think about it.
My time is my most precious commodity. And…it belongs to me…100%.
I get the feeling most of you don’t get that. Life is not about doing a job and chasing a paycheque. It’s about living.
And you know what? You can enjoy living while doing a full time job that pays well and is challenging. The problem is that most people are thin-skinned, lack confidence in themselves and settle for less than is their due. An employee/employer relationship consists of two equal parties who negotiate the terms of the relationship together. No one can make you do what you don’t want to do unless you agree to it.
As for those who are naked when the tide goes out, do you not notice there are a lot of those people around? Like the majority of the population? Do you also notice those are the same harried people that work at Walmart or those other menial jobs you mentioned and say to you “oh, I don’t work because I need the money. I do it for the enjoyment.” I like how they lie to themselves and then expect you to agree to that idiocy. No thanks.
I agree with you that this post makes Coast FIRE sounds like complete nonsense. The black/white binary examples and assumptions don’t help either. I could be wrong but to me CoastFIRE means something similar to what Joe and Manuel stated in their comments. Basically you start getting close to your FI number (say 70-90%) and instead of grinding it at full throttle you decide to slow down and ease into FIRE more leisurely at the cost of getting there a little later.
That’s exactly what I am currently doing and it’s totally worth it to me. I recently switched to a lower stress/lower pay WFH job. Combine that with the nice and cozy feeling of FU power and my life, my physical and mental health have improved exponentially. Going CoastFIRE is also helping me with overcoming the OMY syndrome which (for me) is real.
Regarding the job related stress I have a different experience. In my rather long software engineering/consulting career, more responsibility and higher pay have almost always equated to more work and stress. Yes, you are responsible for your own stress level to a degree. But once immersed in a stressful or dysfunctional work environment it will rub off on you affect your mental and physical health no matter how hard you try to deny it. Having the luxury to be able to pick a low stress level (over more pay) solves the problem completely. To summarize: the time penalty of coasting to FIRE is 100% worth it to me.
Haven’t delved into coast fire yet but something to think about. Like you said, I thought it was drinking cocktails on a beach or something. Thanks for the coast fire formulas too.
Another Bitch (to use Firecracker’s term) is Inflation. Over the years, inflation can also decrease the value of $1M by the age $65. As an example, $1 million may only be worth $750K at age 65.
Actually Firecracker’s calculations account for inflation. The problem I’m having here is with her CoastFIRE definition not the numbers necessarily.
The main advantage of Coast FIRE is it gives you flexibility.
I think the example in this article is a bit extreme, as a 30 year old would be foolish to stop saving so young. They could stop putting money into retirement, but I wouldn’t stop saving. Life can get messy between 30 and 40.
However, Coast fire lets you redirect the money you would have put towards retirement into a different investment vehicle (i.e. real estate, or a regular brokerage account).
It gives you space to you ask the question “why am I shoving $19,500 into my 401K every year when I could be deploying that money elsewhere?”
All the blogs say “max out your 401K and if you don’t you’re an idiot.” But a person who has reached a Coast Fire number can say “F.U., I’m gonna put this money to work elsewhere, now!”
For example, I’ve drastically cut down on my retirement savings. Instead, I’m saving to build a house in a few years. I’m Coast FIRE. This means I get to spend my money today on, you know…living life.
Wow, obviously more research is still needed since there are so many things wrong with this blog post.
oh, do flamingo fi next.
I accidentally got to traditional definition of CoastFI at 34 after making a lot of mistakes in my 20’s and then trying to go the way of FIRE. I’m not going to stop saving right now and in a few years I’ll hit 50% of my FIRE number. At that point, I’m 10 years away from FIRE with not saving any more. aka, I’ll coast 10 years to get to early retirement by 50. This gives me such great flexibility.
I don’t like my job. I would like to do more crafting and other ventures. With such a runway, I can try all the things! and I don’t have to regret my BA in History, no software engineering salary, and house buying self.
I love that there are so many ways to achieve financial security! I don’t have to optimize everything, and that feels sooooo good to me.
This feels like a Coast FIRE hit piece and while I think you fired some shots, you definitely missed the mark IMO.
You painted a picture of CoastFIRE as this rigid, unchanging, lazy man’s version of traditional fire, which couldn’t be further from the truth.
We’re not all out here aiming to reach $1 mil at age 65… we each have our own CoastFI numbers based on spending and lifestyle desires.
Everyone’s numbers and strategy will be unique, but the general idea stays the same: opting for flexibility and freedom now, instead of waiting.
I hope you try defining coast FIRE again and consider talking to some people who are coasting.. or spend even 20 minutes in the CoastFIRE Reddit group.
Here is some great feedback on your article if you end up wanting to take another pass at “What is CoastFIRE?”
https://www.reddit.com/r/coastFIRE/comments/qulyx8/thoughts_on_millenial_revolutions_post_on/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
Firecracker, thank you for starting and interesting conversation on COAST-FI. While I take issue with the stiff definition and example provided in this article, you hit most of the relevant points. COAST-FI is a poor idea for those with a set it and forget it mindset but is a worthwhile consideration for those with time and in need of flexibility.
I am in my late twenties with a partner in their early thirties. We are maintaining multiple professional jobs, resulting in a 65% savings rate (in addition to stress and physical health effects). It is very important to us to have kids before the 9 years required to achieve full FI- there is some biological motivation here! It is also very important to us to be present in our potential children’s lives rather than working long hours, paying for daycare and missing big moments.
I am a recent COAST convert. We can work 4-5 years at our current rate, cover expenses for 10 years and save enough to be full FI 15 years from today, providing flexibility to cut back on work and prioritize different aspects of our lives. Both of us could work part-time, be self-employed or find full-time employment in the future. One of us could switch to a lower stress, barely full-time job and easily support our family while continuing to save a lesser amount. We could choose to continue to actively save toward FI at any point or could extend the coast timeline to allow our portfolio to grow.
There are always risks (health events, job loss); these are present for everyone working toward FI. There are also real risks to putting off life and working long hours. I do not foresee lifestyle inflation being a major risk as compared to someone just FI planning on having kids, however with 20+ years of buffer and flexible options, the risk remains manageable. Coast FI offers a path for those interested in retiring early to plan effectively and prioritize intentionally. In 5 years, maybe I will decide to stick it out to the full fast FI. It is nice to know that financial independence and early retirement remain achievable well before 45 because of my saving today.
I am interested- how have other parents working toward FI managed?
How much did having kids impact your working hours and would you have done anything differently?
The Coast FIRE crowd is hilarious. “If you invest $20,000 once and wait 50 years it will become 3 million and you’ll be FI!”. Yes, and you’ll probably be dead, missing the entire point.
This quote really sums it up: “Since the Coast FIRE formula isn’t using your spending level to calculate your FI number, you’re pretty much guessing how much you need by 65.”
Since you have no idea what the market returns will be, or what CAPE you’ll be retiring it, it’s pretty much a wild guess what you’ll need to feel secure in 30 years.
Coast FI is for people who built a brand identity around bragging about their FI plans who need to save face once they realized they wanted a big house, a new phone, and an espresso machine more than they wanted FI.
Sincerely, someone who actually IS fi.
I have heard of many FI terminologies including COAST FIRE. Unfortunately, I still do not understand the underlining concept entirely.
Personally, this variation of FIRE reminds me more and more about the fable story between the ANT and GRASSHOPPER. I see the traditional FIRE path to be more stringent like “ants” whereby they are meticulously conscientious about “rationing” today for the purposes of living “abundantly” later whereas I aligned COAST FI to be more the opposite like “grasshoppers”. Both will actually have their cakes and eat it at the same time! Both are also well aware to NEVER eat the entire bakery store either. Neither is wrong or right! They simply just have two very different timelines that’s all.
I do have to adamantly concur with some of the assessments already made both in the article and in the comments section… Technically, and in the end, “You’re still someone’s bitch.” and so the pull of FIRE is really the “fuck you” aspects! All of us here only have a limited amount of discretionary “healthy” hours left in our day so the only true question that should be asked is this…
Would you want to buy your FREEDOM first?!? Would that be NOW or LATER?!?
The answer seems ohhh so simple to me.
ImmigrantOnFIRE
Very good chance you will still put away money once CoastFI, I think it would be crazy to think you wouldn’t earn $1 more and not add anything to investments over 30+ years.
Maybe you take a year or two to find your passion like you guys did and next thing you know you are earning real income and a lot closer to normal FIRE.
I’ve always fascinated with people with the ability to make their lives more complicated than required!
Full FIRE…
Fat FIRE…
Lean FIRE…
Coast FIRE…
Forget all these convoluted ideas out of your head…
practice the discipline of SAVING 15% on any jobs that fit your lifestyles (change JOBS as often as you like)…
in 35 years you will be FI.
Good luck!
Its never one way or the other. In real life, people are more complicated.
Coast Fire combines aspects of regular FIRE; I doubt anyone goes to exactly 0% savings after hitting some number.
In my case, I pursued FIRE. Then, when I was close, quit my job and took another, with reduced hours. I’m now required to work part time, that’s the Coast part. Its not just coasting on the savings part.
Think of Coast as gliding into the final landing; as opposed to FIRE (like firecracker did) where you land hard and fast. How long you glide is up to you, but coasting means taking the foot off the gas somehow (reducing your earnings/workload) and slowly coming into the final landing. You get some of the benefits of retiring early on, but not all.
What the article described was a weird non-coast scenario where a person works fall out the whole time, it neglected the coasting part on earnings and only addressed the coasting on the savings. The article only captured 50% of what coasting means.
You can’t call it coasting if you’re still full on working; that’s just working while having a big bank account. Nothing wrong with it, but there’s nothing to explain without sounding overly pretentious and complicated.
My comment is several months late, but I just stumbled upon this post.
Just like with any FIRE calculator COAST FI can be updated and does not need to be 30 years. COAST FI with 30 years of work is very risky indeed. However, if you are already knee deep in efforts getting to FI it can be a powerful too. You can change the variable of 30 years to 10 and have that info in your pocket in assessing how you’d like to go about your remaining years of work.
A wonderful calculator can be found here:
https://thefioneers.com/coast-financial-independence-calculator/
Example: Let’s say you can somewhat of a later start than kids these days. You’re between 50% – 75% towards your FI goal at 35. And based on your savings rate can retire somewhere between 2-4 year. However, if you deposit enough into investments so that you have the amount you need to reach your COAST FI number and reset your retirement age by 5-10 years you an decide that it’s worthwhile to take the pedal off the metal and live more flexibly in the present. This especially is beneficial for those can the earn decently and can pair down their hours/or days scaling down to 2-3 days vs work 40-80 hours. And it might not mean not still contributing to your FI goal more quickly but at least gives you the flexibility in being okay taking time off to enjoy what’s important now.
There’s pros and cons in everything. And not reaching FI leaves risk, but some may be okay with that if it’s only an ~ 5-8 years differance. So I do think COAST FI is powerful to be aware of, regardless of your goals.
For me it allowed me to be open to taking risks in leaving a full-time position to go freelance with not client leads at the time. And in doing so, I ended up raising my earnings by 30% and working only 3/4 of the year last year with little effort.
Anyway, I still really appreciate yours and the commenters perspectives. I just think more variables need to be considered in determining what is right for someone. And there’s more PROS than currently listed worth noting.