One of the most popular twists to the FIRE movement – that is financial independence, retire early – is Coast FIRE, mainly because it grants people the freedom to live reasonably now, while still ensuring they retire early.
The Coast FIRE calculator below helps you plan out what you need to save and when. An early retirement must be planned well, and that’s where this calculator hopefully be of use to you.
Keep reading, and I’ll take you through the FIRE movement and how Coast FIRE could help you reach those retirement goals.
Coast FIRE Calculator
Please hit Calculate to proceed.
We’ve updated this calculator with new functionality! Here’s a quick guide to using the calculator and what each input needs.
There are two tabs – Simple and Advanced. As the names suggest, you get a simplified or the full blown version of the calculator.
Let’s go through the inputs for the Simple mode first:
- Currency: Simply choose the currency you intend to save and withdraw in (e.g., USD, GBP, CAD, AUD, EUR, or INR).
- Current Age: Nice and simple – how old are you right now (in years)?
- Retirement Age: The age at which you wish to begin your retirement.
- Current Portfolio Value: Do you already have a portfolio for investments, stocks, shares, or bonds? Be sure to enter your savings amounts here – and only include those amounts you can freely use to invest with.
- Annual Contribution: How much do you save or contribute each year? This must be a figure you know you’ll invest without fail. It’s assumed that these payments are made each year until you retire. If you want a little more control, check out the Advanced tab.
- Annual Return (%): How much do you roughly expect to make from your portfolio each year? I’d recommend entering 6 to 8% if you’re unsure.
- Annual Expense: The amount of money you expect to require in your retirement.
Note that the Simple mode defaults to an inflation rate of 2%. Income taxes are assumed to be 0%. If you’d like to account for those, please used the Advanced mode.
The Advanced tab features more inputs and more functionality. Here are the key things to know about the inputs on this tab:
- Annual Contribution and Stop Contribution Age: These two inputs work in conjunction here. You can enter a specific age up to which you wish to continue contributing to your portfolio. See the discussion below for more clarification.
- Initial Return (%): This is the return on your portfolio during your wealth build-up phase. Typically people prefer a more aggressive allocation, you could try a higher number like 8% here.
- Retirement Return (%): Once in retirement, people generally skew to a more conservative portfolio, so you can model that using a lower return figure – say 6%.
- Inflation Rate (%): Enter in your country’s current inflation rate if you know it. A good figure for a developed country may be, for example, 2%.
- Stop Contribution Age: At what age do you want to stop paying into your savings or portfolio? This value can be any year between your Current Age and your Retirement Age.
- Annual Expense (Post-tax): In today’s currency terms, how much money will you need in your retirement phase? Don’t worry about inflation – the calculator will take care of this for you! Simply enter in a number based on current inflation rates and your results will be adjusted. Also remember you will very likely have to pay income taxes in your retirement as well, so your withdrawals from the portfolio will actually be higher to account for income taxes.
- Supporting Income (Pre-tax): Do you expect to receive any supporting money from a pension plan, social security, or a side-hustle? Enter the gross amount here.
- Expected Average Income Tax Rate (%): You don’t have to fill this field in – but if you know how much you expect to pay in average income tax on your combined income, enter in a number. If you don’t know a number, a low-figure, usually between 10% to 20% will serve as a reasonable placeholder.
A quick note on the ages: The idea behind any retirement calculator is for you to specify you current age and the retirement age. Our calculator includes an additional input called the Stop Contribution Age. Let’s look at this through an example:
Jon is currently 37 years old and wants to retire at the age of 55. His savings portfolio is currently worth $75,000. He would like to save up front for the next 10 years, so he can contribute $15,000 per year for the next 10 years, or until the age of 47.
In this example, Jon would entire his Current Age as 37, the Stop Contribution Age as 47, and Retirement Age is 55. Jon is letting his portfolio coast for the 8 years (from age 48 to 55) until his retirement age.
Jon could alternatively use a Stop Contribution Age of 54, if he intends to keep adding to his portfolio right up till the very end. Alternatively, he could also use 37 if he just wants to contribute for 1 year.
There are many different options! Please do try out a few different options to see what fits best.
The calculator presents the results in 4 different ways:
- Descriptive: This section just provides a simple text based summary with the basic numbers around whether you’ll be able to achieve Coast FIRE or not, based on the inputs that you have entered.
- Chart 1 – Portfolio Value & Annual Investment Income: The black line shows how your portfolio value (left y-axis) will behave over time. The vertical bars show the annual investment income generated by your portfolio. Note that this income will be a combination of capital gains (share prices going up) and dividends.
- Chart 2 – Annual Cash Flows & Returns: This chart shows the cash added to the portfolio during initial years and the cash withdrawn from the portfolio in the retirement years. These are in orange. The blue bars show the annual investment income from the portfolio.
- Table: If you select “Yes” in the dropdown box, the results will be shown in a tabular format for each year.
There’s a convenient button to Share your results too. You can save the link and come back to the calculator to reuse the inputs that you previously entered as well.
This Coast FIRE calculator is applicable across the world, so whether you are in the US, UK, Canada, or Australia, this calculator will work for you. Just remember to set your currency format properly so your results are shown in the proper format.
What is the FIRE movement?
FIRE stands for Financial Independence, Retire Early. The idea of the FIRE movement is to promote extreme savings and wise investments for those following the system to retire early.
The overall idea is to try to live off small withdrawals from your savings without worrying about running out of funds before retirement.
Essentially, it’s a way to develop responsible saving and spending habits while keeping a financial cushion in mind. For many people, it means breaking free from work to enjoy their money as and when they wish.
However, FIRE does take a lot of work – and, generally, a lot of money. It’ll mean scaling back your spending and being smart about debt. What’s more, there’s a risk you could outlive your savings. If you really want to save up via FIRE, you’ll likely need to start cutting back on daily and weekly spending. However, the idea is that you’ll be able to enjoy the money you have saved sooner than you typically might.
Let’s explore Coast FIRE, a variation on the theme that’s picked up a lot of recent interest.
What is Coast FIRE?
Coast FIRE, at its most basic, is an intensive savings model that requires you to save for retirement early, then live off your retirement money while growing it in investments.
Unlike other FIRE models, Coast FIRE does not permit individuals to save enough to retire fully earlier. Instead, you’re hitting your goals earlier to keep growing this capital while living off it.
The idea behind this all is so that you can stop saving for retirement perhaps 10 to 20 years before you’re of an age to cease working. Once you hit your desired total, you let your money saved “coast” in investments or retirement funds to grow. You’ll keep working alongside to keep income rolling in, but you can work fewer hours if you wish.
While this may sound difficult – or even counterproductive – Coast FIRE allows you to gain financial freedom and independence without spending most of your life contributing to your 401K or equivalent.
Instead, once you’re at the Coast FIRE total, you can (hypothetically) rely on your savings to cover your basic needs while still being able to work part-time or even in a lower-paying job. Therefore, you should still have plenty of extra free time outside of work, almost in the shape of a semi-retirement!
What are the benefits of Coast FIRE?
Coast FIRE may not be achievable for everyone (and may not even be the most preferable option for FIRE fans), but there are a few reasons you may wish to try it.
You can stop working full-time, sooner.
One of Coast FIRE’s biggest benefits is that you don’t have to keep working full-time to top up your retirement fund.
For example, if you start early enough and save within your means, you could start to scale back your hours at the age of, say, 45. If you have enough to retire on at that age, you can start focusing on personal projects, and even living off your retirement money for basic expenses.
The further benefit of the Coast FIRE model here is that it will keep growing in investments, meaning there’s income coming in. Naturally, the risk is that your investments don’t work out – so you need to be a shrewd investor.
You can potentially change careers.
Many people feel restricted by careers when they focus wholesale on saving for retirement. What’s more, many of us have reached positions and built careers by following what may have been the easiest, most natural, or most obvious paths for us. And, in so doing, we may have left bigger dreams behind.
Coast FIRE strives to give you back the chance to do something you’ve always wanted to, while not having to worry about saving so far into your working life. Simply check out once you achieve Coast FIRE, and provided you have an income stream (through investment interest or otherwise), you’re covered.
Your retirement pot will grow even more once you reach 60+.
Rather than making do with whatever amount you’d typically achieve through retirement saving by the age of 60+, letting your savings grow on compound interest means you’ll have an even larger amount to fall back on when you really want to quit work for good.
The ultimate aim of Coast FIRE is to provide you with the dual dream of earlier working freedom, and larger retirement savings. That said, achieving all of this comes at a fairly large cost over time.
What are the drawbacks of Coast FIRE?
There are drawbacks to every positive, and while Coast FIRE isn’t a too-good-to-be-true option, it’s still got its caveats.
Returns are never guaranteed.
To reach your Coast FIRE total, you will need to rely heavily on wise investments and careful portfolio management. But, no matter how researched and careful your investments are, returns are never guaranteed.
Therefore, if you’re reliant on your investments driving up your eventual retirement returns, keep in mind your end date may change if you’re not careful. Consider working closely with a portfolio manager who can help you find the absolute best diversification options for your money and lifestyle.
You’ll need a lot of money to reach Coast FIRE.
Regardless of how long it takes you, reaching Coast FIRE means condensing lifelong savings into around half the time it’d usually take. That means you’ll either need to work a little harder now and make a few sacrifice for 10-20 years, so you can really sock away those savings.
That means you’ll need to prioritize your future self and savings goals over your immediate comforts. So, consider scaling back vacations, big holiday spending, new cars, and properties. You’ll really have to attach yourself to Coast FIRE as your goal.
You may not benefit in the short term.
Keeping an eye on long-term success is one thing, but it may not actually be good value at all to invest in Coast FIRE in the here and now.
If you’re not paying into a 401K or other standardized retirement plans, you could risk spending more on healthcare, and missing out on extra contributions into your retirement funds.
Do also think about any debts you have to settle. Student loans, for example, may prevent many Americans from reaching Coast FIRE at all on a feasible basis.
That’s why I’ve set up the calculator above – so you can see if it‘s feasible for you to start saving and eventually achieve “Coast FIRE” without suffering in the short term.
What do I need to calculate my Coast FIRE total?
We’ve discussed the inputs for the calculator above, but here are some additional points on what you’ll ideally need to hand if you want to calculate how to get to Coast FIRE.
Your current monthly expenditure
Your monthly expenses include everything that you spend on a monthly basis. This includes your food costs, rent payments, mortgage payments, utility bills, entertainment, etc. It should also include expenses that you may not spend every month but will need to be considered, such as travel, maintenance (on your home, car, etc.), insurance, etc.
In the calculator, use the annual expenditure (multiply monthly expenditure x 12). Don’t worry about inflation over time as the calculator automatically handles this for you.
The age you want to achieve Coast FIRE
Think carefully about when you want to achieve financial independence, including when it’s likely to be possible. The older the age at which you want to be financially independent, the more time you will have to grow your savings between then and now.
Your current investments
Do also take care to consider your current investments and total net worth. That means the sum of your financial assets (including cash, investments, real estate, etc.). It is vital admin to take into account all of your liabilities, too, such as your loans and debt.
Rates of Return
You should also consider your investments’ current expected growth rate. That said, as mentioned above, there are no guaranteed growth rates, so it is important to research your investment opportunities carefully and diversify as much as possible.
Depending on your age and risk profile, I would recommend that you opt for one of the following flavours of investment portfolios:
- Balanced Portfolio (typically 60% equity and 40% debt): These portfolios are suitable for those who have moderate risk tolerance. Your expected annual returns over the long run would likely be in the 5-7% range. You can comfortably use 6% as a representative figure here.
- High Equity Allocation (at least 80% equity): Some companies refer to this as a “High Risk” portfolio. I disagree with the nomenclature, as the portfolio doesn’t have higher risk. On our site we have often discussed the difference between risk and volatility. Suffice to say that if you’re young and you can absorb volatility, this is likely your best bet. You can use a return range of 6-9%.
When you do allocate your portfolio, remember to consult a professional wealth advisor. Seek advice wherever you can, so you don’t get in to unexpected troubles.
Withdrawal rate at retirement
It’s important to look at the withdrawal rate in your retirement. Ideally, shooting for a target of 4-5% is reasonable as you can expect a reasonably balanced portfolio to deliver upwards of 5% annually.
If your withdrawal rate exceeds your annual returns, your portfolio will start to decline over time. If the mismatch is severe, your portfolio could exhaust itself in your life time. This would put you in a very difficult situation.
Some people however wish to “die with zero” and leave no money behind. Some people wish to leave a lot of money behind. You have to determine what your end goal is as it’s a personal decision.
Just be sure to think it through carefully as the trajectory will be difficult to modify as you get older. Please play around with the calculator to see what works best for you!
Coast FIRE Calculator With Pension
You can use this calculator to determine whether you can achieve your Coast FIRE if you expect to receive a pension. You can enter this value in the Supporting Income field on the Advanced tab.
Please note that you should enter the gross value of the pension (i.e. pre-tax) that you receive. Usually pensions are taxable even in retirement, but of course that differs in each country.
Be sure to use the correct average tax rate on your combined income streams. Usually a value between 10% to 20% will be good enough for most people for modeling purposes at this stage.
The Shape of FIRE
We talked about several points above and I wanted to show through the example of the Coast FIRE calculator how portfolio values could shape up over the course of retirement.
This is a pretty obvious case in which there simply isn’t enough money saved up to retire in a sustainable manner. The chart generated by our calculator would look like the one one shown below.
Building on Jon’s case above, with the assumptions presented below, Jon runs out of money by the time he’s 67. That’s not a good situation to be in!
- Current Age: 37
- Retirement Age: 55
- Current Portfolio Value: $100,000
- Annual Contribution: $25,000
- Stop Contribution Age: 45
- Annual Return: 6%
- Inflation Rate: 2%
- Annual Withdrawal: $60,000
One way to get around this problem – if Jon still intends to follow through on this plan – is to consider supplementing your income in your retirement through a part-time job. Barista FIRE is the name given to this concept. You could try some small part-time jobs from home or try something more involved like working for Doordash.
Luke Warm FIRE
Jon sees the above and decides to step his game up a couple of notches. He opts for a more aggressive portfolio allocation to equities (at least 90% equities) and hopes to attain 8% over the long run. He also increases his Stop Contribution Age to 48, so contributing $25k annually for 3 additional years.
In this case, his portfolio’s life extends out to the age of 88 to 89. This is obviously a better situation than the above, but not great. A couple of bad years in the market or higher level of expenses would force him to withdraw more. With bad timing, he could still easily get in to trouble.
Jon really wants to achieve Coast FIRE, so he isn’t left in a lurch when he is old. But he doesn’t want to dramatically step up his savings rate either. He is also uncomfortable taking on a high equity allocation portfolio. So now he changes the assumptions to the following:
- Retirement Age: Increase by 1 year to 56. 1 year of compounding can make a big difference in the latter years!
- Annual Contribution: Increase to $26,000. This is only $1,000 a year higher, so not a dramatically higher ask.
- Stop Contribution Age: This is where he does have to make the biggest change. This now goes up to 55.
- Annual Return: He dials the risk a little bit and shoots for a 7.5% return.
Now his money can really go on for a long time! As this chart shows, even if he lives to be 125 years old (highly unlikely), his portfolio will still outlive him.
It might seem funny to think about being 125 years old, but this does build in an excellent buffer for the unexpected: poor market returns for an extended period of time, or higher than expected medical or other bills, or leaving money behind for a surviving spouse/partner, or of course leaving money behind for an inheritance or a charitable donation! Buffers are important and they’re important to build in slightly higher than you would expect.
Of course one can argue that this may case not really be Coast FIRE, but this is just an example. If you are able to start off at a younger age and save more, your numbers could look a lot better than those presented here!
Try out the calculator and see if you can hit Coast FIRE at 40! Or try this as an exercise: What does it take to get to a $7 million portfolio? Is it achievable? If not, then is at least $5 million realistic then?
There are other types of FIREs too and it’s worth learning about them. If you’d like to retire with a bigger nest egg and earlier, try checking out Fat FIRE.
Before You Go…
Hopefully you found this information useful. Please do let me know in the comments if you have any feedback, comments, or questions!
Our whole blog is dedicated to help you get on the path of financial freedom. Feel free to browse around and read through the articles.
In a nutshell, the fastest way to achieving FIRE is to cut your debt, minimize unnecessary expenses, so you can save and invest your money! Do check out our guide to vested balances and 401Ks, should you choose to go that route!
How do you calculate Coast FIRE?
There are many inputs and assumptions that go in to calculating Coast FIRE, so it’s difficult to generalize. Try out our Coast FIRE calculator to help you figure out how it might work for you.
How much money needed for Coast FIRE?
There are many inputs and assumptions that go in to calculating Coast FIRE, so it’s difficult to generalize. Try out our Coast FIRE calculator to help you figure out what is the right number for you in terms of your savings rate, retirement age, expected costs, etc.
What is the difference between a CoastFIRE and a FIRE?
Coast FIRE is the more relaxed version of FIRE. In a nutshell, you do not save and invest as aggressively as normal FIRE. You invest smaller amounts for a longer period of time, but still hope to retire well before your 60s. This could be driven by the fact that you still like your job, or your ability to save aggressively is limited, or that you just don’t want to sit at the beach all day when you’re just 45!
by Brianna Johnson
Brianna Johnson, a Miami-based finance veteran, is a wealth advisor for high net-worth families. She loves to write and to share her knowledge. For PFF, she writes in-depth articles on finance and investments that help readers get unique insights. See more.