Using the Coast FIRE Calculator
The coast fire calculator is a powerful financial tool designed for those in the Financial Independence, Retire Early (FIRE) movement. Unlike traditional FIRE, where you save until you can quit working entirely, Coast FIRE identifies the specific moment when your current portfolio is large enough that it will grow to your retirement goal through compound interest alone—without you ever needing to contribute another penny.
By entering your current age, desired retirement age, and expected spending, this calculator reveals if you can stop aggressive saving and "coast" into retirement by only covering your current living expenses through work.
- Current Age & Retirement Age
- The number of years between these two points determines the timeframe your money has to grow.
- Expected Growth Rate
- The annual percentage return you expect from your investments (inflation-adjusted is recommended, typically 5-7%).
- Safe Withdrawal Rate (SWR)
- The percentage of your total nest egg you plan to withdraw annually in retirement (the 4% rule is the standard benchmark).
How Coast FIRE Is Calculated
The math behind the coast fire calculator relies on two primary financial concepts: the "Rule of 25" (inverse of the 4% rule) and the time value of money. To find your number, we first determine your total FIRE target and then discount it back to the present day using compound interest.
Coast FIRE Number = (Annual Expenses / Safe Withdrawal Rate) / (1 + Growth Rate)Years to Retirement
- Target FIRE Number: Your ultimate goal to fund your lifestyle indefinitely.
- Growth Rate: The compounding engine that does the "heavy lifting" while you coast.
- Compound Interest: The reason why hitting Coast FIRE early is significantly easier than hitting it later in life.
Coast FIRE Example Calculation
Example: Let's look at Sarah, a 30-year-old software engineer who wants to retire at age 60. She expects her annual expenses in retirement to be $50,000 and expects a 7% market return.
Step-by-step solution:
- Target FIRE Number: $50,000 / 0.04 = $1,250,000
- Years to Grow: 60 – 30 = 30 years
- Formula: $1,250,000 / (1 + 0.07)30
- Calculation: $1,250,000 / 7.612 = $164,214
- Result: Sarah's Coast FIRE number is $164,214. If she has this much today, she never has to save another dollar for retirement.
Common Questions
What is the benefit of Coast FIRE?
Coast FIRE provides psychological freedom. Once you hit your number, the pressure to "climb the corporate ladder" or work high-stress jobs for the sake of retirement savings disappears. You can take a lower-paying job that you love, work part-time, or start a business, as long as you cover your immediate monthly bills.
Does this include inflation?
To account for inflation, you should use a "real" growth rate in the coast fire calculator. While the stock market historically returns about 10%, inflation averages 3%. Using a 7% growth rate allows you to think in "today's dollars," meaning your retirement spending power is calculated based on what $40,000 buys you right now.
What if I want to retire earlier?
If you decrease your retirement age in the calculator, your Coast FIRE number will increase. This is because your money has less time to compound. To retire earlier, you either need a higher current savings balance or you must continue contributing to your investments for a few more years.