Most retirement planning assumes you save every year until the day you stop working. Coast FIRE asks a different question: how much do you need invested today so that compound growth alone carries you to your retirement number, even if you never contribute another dollar?
Once you cross that threshold, your retirement is funded. You still need a job, because you still have bills to pay. But the job only needs to cover your current expenses, and that changes what kind of job it has to be.
What Coast FIRE actually means
Traditional FIRE (financial independence, retire early) requires saving enough to cover your living expenses from your portfolio indefinitely, usually 25 times your annual spending. That is a big number, and most people chasing it save 40% or more of their income for a decade or longer.
Coast FIRE is the earlier milestone on the same road. You have not saved enough to live off your portfolio yet. You have saved enough that, left alone in the market for the years between now and your retirement age, it should grow into the full amount on its own.
The word "coast" describes what happens next. You stop making retirement contributions, or cut them to near zero, and let the existing balance compound. Your paycheck now only needs to match your spending. Someone earning $95,000 and saving $25,000 a year for retirement could, after hitting their Coast FIRE number, take a $70,000 job they like better and stay on exactly the same retirement schedule.
The formula
The math is one line of compound interest run backward:
Coast FIRE number = target retirement portfolio ÷ (1 + real return)^years until retirement
Three inputs:
- Target retirement portfolio. The amount you want at retirement. A common starting point is 25 times your expected annual spending, from the 4% withdrawal guideline. If you expect to spend $60,000 a year in retirement, the target is $1.5 million.
- Real return. Your assumed annual investment return after inflation. Using a real return keeps everything in today's dollars, so the target does not need a separate inflation adjustment. This number is an assumption, not a fact. Many planners use 4% to 6% real for a diversified stock-heavy portfolio, based on long-run historical averages that may not repeat.
- Years until retirement. Retirement age minus your current age.
The formula discounts your target backward through time. Every year of compounding you have in front of you shrinks the amount you need today.
Worked example: a 30-year-old targeting $1.5M at 65
Assume a 5% real return. That assumption does the heavy lifting here, so hold it loosely.
Years remaining: 65 − 30 = 35.
$1,500,000 ÷ 1.05^35 = $1,500,000 ÷ 5.516 = $271,942
If this 30-year-old has roughly $272,000 invested, and the portfolio averages 5% a year after inflation for 35 years, it grows to $1.5 million in today's purchasing power with no further contributions. Check the math forward: $272,000 × 5.516 = $1,500,352.
That is a large amount to have at 30, but it is far smaller than $1.5 million. A high saver in their 20s can plausibly get there by 30 or in their early 30s, which is why Coast FIRE resonates with people who front-load their saving. The mechanics behind that front-loading are the same ones covered in why compound interest matters most in your 20s and 30s: early dollars have the most years to multiply.
Worked example: a 45-year-old targeting $1.5M at 65
Same target, same 5% real return assumption, 20 years remaining.
$1,500,000 ÷ 1.05^20 = $1,500,000 ÷ 2.653 = $565,335
The 45-year-old needs about $565,000 invested, more than double the 30-year-old's number for the identical goal. Fifteen fewer years of compounding is expensive. This is the honest downside of discovering Coast FIRE at midlife: the threshold is much higher, and for many people at 45 the smarter read of the formula is as a progress gauge rather than a green light to stop contributing.
Coast FIRE numbers by age
All figures assume a $1.5 million target at 65 and a 5% real return. Change either assumption and every number in the table changes with it.
| Current age | Years to 65 | Coast FIRE number |
|---|---|---|
| 25 | 40 | $213,000 |
| 30 | 35 | $272,000 |
| 35 | 30 | $347,000 |
| 40 | 25 | $443,000 |
| 45 | 20 | $565,000 |
| 50 | 15 | $722,000 |
Two things stand out. First, the 25-year-old's number is about $213,000, which means someone who grinds hard for their first several working years can potentially be done with mandatory retirement saving before 30. The outsized value of that first chunk of capital is the same effect described in why the first $100K is the tipping point. Second, the numbers roughly double between 30 and 45. Waiting is not neutral.
If your spending target differs from $60,000 a year, scale everything linearly. A $2 million target (about $80,000 a year of spending under the 4% guideline) makes every number in the table 33% larger. A $1.2 million target makes them 20% smaller.
What changes after you hit it
Hitting your Coast FIRE number leaves your bank balance exactly where it was. What changes is the set of choices available to you.
Your income requirement drops to your expenses. If you were saving $20,000 a year for retirement, you can now earn $20,000 less without falling behind. That opens jobs that were previously unaffordable: lower-paying work you find meaningful, part-time schedules, a startup salary, a few years at reduced hours while your kids are young.
Career risk gets cheaper. A layoff or a failed business venture no longer threatens your retirement, only your current lifestyle, which is a far more recoverable problem.
You can redirect savings to nearer goals. Money that was flowing into retirement accounts can go toward a house down payment, a sabbatical fund, or a taxable bridge account if you want the option to retire before 65.
Plenty of people who reach Coast FIRE keep contributing anyway, often at a reduced rate. Nothing forbids further saving. The milestone simply makes it optional, and optional feels different.
The honest caveats
The math above is tidy in a way the next 30 years of your life will not be. Four things deserve real weight before you act on the number.
The return assumption is doing all the work. At 5% real, our 30-year-old needs $272,000. At 4% real, the same calculation gives $1,500,000 ÷ 1.04^35 = $380,000. At 6%, it gives $195,000. A single percentage point moves the target by more than $100,000. Nobody knows which of those futures you will get. If you plan to genuinely stop contributing, use a conservative assumption and treat the resulting higher number as your threshold.
Sequence and drawdown risk. A portfolio you are no longer adding to has no new contributions buying shares during a crash. A decade of flat or negative real returns early in your coast period can leave you well short at 65 with no easy fix except returning to aggressive saving later, at higher required amounts. Averages of 5% include stretches that were far worse.
Healthcare and the years before 65. If coasting tempts you toward earlier semi-retirement, remember that Medicare starts at 65. Private health insurance for a couple in their 50s can run well over $1,000 a month, and that cost falls on your current income precisely when you have chosen to earn less.
Stopping is easier than restarting. Contributions are a habit protected by payroll deduction and inertia. If you turn them off at 32, will you actually turn them back on at 40 when your assumptions drift off course? For a lot of people the practical move is to keep a small automatic contribution running regardless, both as a hedge and as a habit.
The right response to these caveats is to treat Coast FIRE as a milestone you verify continuously rather than a finish line you cross once. Check your balance against the number at your current age every year, using an updated return assumption, and be willing to resume saving if the gap reopens. For context on how the coasting-to-65 phase fits alongside conventional benchmarks, see how much you should have saved at every age.
Tracking your progress toward the number
Your Coast FIRE number only matters if you know your actual invested total, and that total is usually scattered across a 401(k), an old employer plan, an IRA, and a brokerage account. A net worth tracker that consolidates those balances into one figure you update on your own schedule makes the comparison trivial: invested assets on one line, Coast FIRE threshold in your head, gap shrinking month by month. Watching that gap close is also decent motivation during the years when the saving itself feels endless.
Frequently asked questions
What is the difference between Coast FIRE, Barista FIRE, and Lean FIRE?
Coast FIRE means your existing investments will compound into a full retirement fund by traditional retirement age, so you only need to earn enough for current expenses. Barista FIRE means you have partially retired now and cover the gap with part-time work, often chosen for benefits like employer health insurance. Lean FIRE means you have fully retired on a deliberately small portfolio by keeping expenses very low, commonly under $40,000 a year. Coast FIRE is the mildest of the three: you keep working full careers if you want, and nothing about your day-to-day life has to change.
Is Coast FIRE risky?
The concept is sound; the risk lives in the inputs. You are betting that your return assumption holds over decades, that your spending estimate for retirement is right, and that you will stay employed enough to cover expenses until 65. The main failure mode is stopping contributions at the earliest defensible number and then hitting a long stretch of poor returns. You can manage the risk by using a conservative real return, rechecking the math annually, and keeping at least a small contribution flowing.
What return should I assume?
There is no correct answer, only tradeoffs. The long-run real return of US stocks has historically been near 7%, but a diversified portfolio holds bonds and international stocks too, and future returns may be lower than the past. Common practice is 4% to 6% real. A lower assumption gives you a higher, safer Coast FIRE number; a higher assumption gives you an earlier but more fragile one. If the difference between 4% and 6% determines whether you feel done, you are not done.
Should I actually stop saving once I hit my number?
Most people who reach it do not stop completely, and that is reasonable. Capturing an employer 401(k) match remains free money at any portfolio size. A common middle path is to drop from an aggressive savings rate to match-plus-a-little, redirect the freed-up cash toward nearer-term goals, and keep the retirement accounts compounding with a light tailwind instead of none.
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