The Coast FIRE Calculator helps you determine the lump sum amount you need to have in your retirement portfolio today so that, without any further contributions, it will grow to your full financial independence number by your desired retirement age.
Coast FIRE Calculator
Your Coast FIRE Number is:
—Coast FIRE Calculator Formula
N = Target Retirement Age - Current Age
T = Target Annual Expenses × 25
R = (\frac{1 + Expected Return}{1 + Inflation Rate}) - 1
Coast FIRE Number = \frac{T}{(1 + R)^N}
Formula Source: 4% Rule (Investopedia)
Formula Source: Compounding Principle (Mr. Money Mustache)
Variables
- Target Annual Expenses: The amount you expect to spend annually in retirement (in today’s dollars). This is used to calculate your full FIRE number ($T$).
- Expected Annual Investment Return: The average annualized growth rate you anticipate your investments will achieve (e.g., 7%).
- Expected Annual Inflation Rate: The average rate at which general prices are expected to rise over your investment period (e.g., 3%).
- Current Age: Your age now. Used to calculate $N$, the years until retirement.
- Target Retirement Age: The age at which you plan to stop making contributions to your Coast FIRE portfolio.
What is Coast FIRE?
Coast FIRE is a form of Financial Independence, Retire Early (FIRE) where you save up enough money in your retirement accounts so that your savings, without any further contributions, will naturally “coast” on investment returns until the standard retirement age, at which point the portfolio will have grown large enough to support your lifestyle.
Once you hit your Coast FIRE number, you effectively have the option to stop saving for retirement entirely. You can then choose to work a less demanding job, start a business, or prioritize lifestyle over maximum income, knowing your retirement is secured by the power of compounding interest.
How to Calculate Coast FIRE (Example)
- Determine Target Annual Expenses: You estimate you’ll need $40,000 per year in retirement.
- Calculate Target FIRE Number (T): Multiply expenses by 25 (the 4% rule): $40,000 \times 25 = \$1,000,000$. This is your future goal.
- Determine Years to Compound (N): If you are 30 and want to retire at 65, your compounding period is $65 – 30 = 35$ years.
- Calculate Real Rate of Return (R): Assuming a 7% return and 3% inflation, the real rate is approximately 3.88%.
- Calculate Coast FIRE Number: Use the formula $\text{Coast FIRE} = \frac{\$1,000,000}{(1 + 0.0388)^{35}}$. This results in a Coast FIRE number of approximately $266,400.
Related Calculators
Frequently Asked Questions (FAQ)
What is the difference between Coast FIRE and regular FIRE?
Regular FIRE is the full amount you need to withdraw from today. Coast FIRE is the much smaller amount you need *today* that will grow to your regular FIRE number by your retirement date, without any further contributions.
Do I still need to work after hitting my Coast FIRE number?
Yes, typically. The Coast FIRE number secures your retirement savings but does not cover your current living expenses. You need to work enough to cover your annual budget until the day you officially retire.
What is the 25x multiplier based on?
The 25x multiplier is based on the 4% Rule, a long-term study suggesting you can safely withdraw 4% of your portfolio’s initial value annually (adjusted for inflation) with a high probability of your money lasting 30 years or more.
Is Coast FIRE adjusted for inflation?
The calculation is performed using the real rate of return, which is your expected return minus inflation. This ensures the calculated Coast FIRE number is in *today’s dollars*, making it an accurate, actionable target.