Coast Fi Calculator

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Reviewed by: David Chen, CFA. David is a Chartered Financial Analyst with over 15 years of experience specializing in compounding and long-term investment strategies.

The Coast FI Calculator helps you determine how much you need to save now so that your investments can grow independently to reach your Financial Independence (FI) number without any further contributions.

Coast FI Calculator

Calculated Result:

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Detailed Calculation:

Coast FI Calculator Formula

$$F = P \times (1 + R)^T$$

Formula Source: Investopedia | Reference: The Balance

Variables:

  • Current Portfolio Value (P): The total amount of money you have invested today. This is the seed money that will grow.
  • Target FI Number (F): The total portfolio value required for you to be financially independent (usually calculated as 25 times your desired annual expenses).
  • Years to Coast (T): The number of years you plan for your current portfolio to compound until it reaches your Target FI Number.
  • Annualized Return Rate (R): The average expected rate of return on your investments, expressed as a decimal (e.g., 7% is 0.07).

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What is Coast FI?

Coast FI is a critical concept in the Financial Independence, Retire Early (FIRE) movement. It means you have saved enough money such that if you stop contributing entirely, your current portfolio will naturally grow to cover your full Financial Independence (FI) number by your desired retirement age, purely through compounding returns.

Reaching your Coast FI number means you are “coasting”—you only need to cover your current living expenses with your current income. Any income earned beyond covering costs can be used for fun, reduced work hours, or lower-stress jobs, knowing your future retirement is already funded.

How to Calculate Coast FI Calculator (Example)

  1. Determine Target FI Number (F): Assume your desired annual expenses are $40,000. Your Target FI is $40,000 x 25 = $1,000,000.
  2. Set Investment Parameters: You expect an Annualized Return Rate (R) of 7% (0.07) and plan to retire in 25 years (T).
  3. Solve for Current Portfolio Value (P): You need to know how much to save today. Using the rearranged formula $P = \frac{F}{(1 + R)^T}$.
  4. Execution: $P = \frac{\$1,000,000}{(1 + 0.07)^{25}}$.
  5. Result: $P \approx \$184,242$. This is your Coast FI number. Once you have this amount invested, you can stop contributing and your portfolio will grow to $1,000,000 in 25 years.

Frequently Asked Questions (FAQ)

Is Coast FI the same as “regular” Financial Independence (FI)?

No. Regular FI means you have reached the full amount required to live off your investments today. Coast FI means you have reached the amount required today to reach regular FI at a future date without any more contributions.

What is a safe Annualized Return Rate (R) to use?

Historically, the stock market returns around 10% before inflation. Most calculators use a real (inflation-adjusted) return rate between 5% and 7% for conservative long-term planning.

Can I start Coast FI with zero savings?

No, Coast FI requires a certain amount of capital (P) to be already invested. If your Current Portfolio Value is zero, you must first save money until you reach your calculated Coast FI number.

What if I input all four values into the calculator?

The calculator will perform an “Inconsistency Check.” It will calculate the future value based on P, R, and T, and compare the result to your inputted Target FI (F). If they differ significantly, it will notify you of the mathematical inconsistency.

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