What Is Coast FIRE? The Number That Buys Your Freedom

Coast FIRE is the point at which the money you have already invested will grow into a full retirement pot on its own, with no further contributions needed. Hit the number and the retirement problem is mathematically solved decades ahead of schedule. A 25-year-old with roughly $134,000 invested never needs to save another cent to retire with $2 million at 65, assuming 7% real returns. Every paycheck after that is for living, not for catching up.

The standard American career script says something very different. Work full tilt until your Social Security full retirement age of 67, max the 401(k) every year you can, and treat any gap in the grind as a moral failing. We write from Britain (where the same FIRE maths runs measurably harder), and from across the Atlantic the strangest thing about that script is how rarely anyone checks whether the saving part of the job is already done. For a decent slice of diligent savers in their 30s and 40s, it is. Coast FIRE is the maths that tells you so.

Contents

• What is coast FIRE?
• The coast FIRE formula, with worked examples
• Coast FIRE vs barista FIRE vs lean and fat FIRE
• How to calculate your coast FIRE number
• What can go wrong: the criticisms and risks
• When coasting actually makes sense
• Frequently Asked Questions

What is coast FIRE?

Coast FIRE is a milestone inside the broader FIRE movement (Financial Independence, Retire Early). Traditional FIRE means saving until your portfolio can fund your entire life right now. Coast FIRE asks a humbler question: how much do I need invested today so that compound growth alone gets me to a normal retirement at, say, 65?

The name is the bicycle metaphor. You pedal hard up the hill early in your career, and once you crest your coast number, you stop pedalling. Momentum does the rest. The portfolio keeps compounding for 20, 30 or 40 years while you simply cover your living costs from whatever work you choose.

Here is the reframe that makes the idea click: coast FIRE is really a statement that your retirement is already funded, you just have not met it yet. The $134,000 our 25-year-old holds is not "a good start". At 7% real returns it is the $2 million pot, sitting 40 years upstream of itself. Once you see invested money as future money wearing a discount, the whole retirement conversation changes shape.

What coast FIRE does not mean is retiring now. You still need to earn enough to pay the bills until 65. What it removes is the obligation to save for retirement on top of paying the bills, which for most households is the difference between needing a $90,000 job and getting by comfortably on a $55,000 one.

The coast FIRE formula, with worked examples

The maths is one line:

Coast FIRE number = retirement target ÷ (1 + real return)^years until retirement

Three inputs: your target pot (annual retirement spending times 25, per the Rule of 25), your expected real return (return after inflation; 5% to 7% is the range most planners use for a stock-heavy portfolio), and the years between now and your retirement age.

Worked example one. A 25-year-old wants $80,000 a year in retirement at 65. Target: $80,000 x 25 = $2,000,000. Years of growth: 40. At 7% real returns, money multiplies by 1.07^40 = 15.0x over that span. So the coast number is $2,000,000 ÷ 15.0 = roughly $134,000. That is less than six years of maxed-out 401(k) contributions at the 2026 employee limit of $24,500, per the IRS.

Worked example two. A 35-year-old wants $60,000 a year, so a $1.5 million target at 65. Thirty years of growth at 7% real gives a 7.6x multiple. Coast number: about $197,000.

Worked example three. A 45-year-old with a leaner $40,000 a year plan needs $1 million at 65. Twenty years at 7% real is a 3.9x multiple. Coast number: about $258,000.

Notice the pattern: the young need shockingly little, because time is doing almost all of the lifting. The 25-year-old's number is half the 45-year-old's despite the target being twice the size. Compounding is exponential rather than fair, and coast FIRE is the strategy that puts that unfairness to work in your favour.

You do not need a spreadsheet for any of this. Our Coast FIRE calculator runs the whole calculation interactively, and it displays dollars automatically for US visitors. The rest of our US-facing tools live at /us/tools.

Coast FIRE vs barista FIRE vs lean and fat FIRE

The FIRE movement has spawned a small zoo of variants, and the labels get muddled constantly. The clean distinctions:

Coast FIRE: retirement is fully funded by existing investments plus time. You keep working to cover current living costs only. No more retirement saving required.

Barista FIRE: a close cousin with one very American twist. You quit the career job and take part-time work, partly for income and mostly for the employer-sponsored health insurance. The name comes from Starbucks, which famously extends health benefits to part-time staff. Barista FIRE usually implies drawing a little from the portfolio to top up part-time wages; coast FIRE implies touching nothing until 65. We have taken a full look at barista FIRE and the health insurance maths behind it separately.

Lean FIRE: fully retired now, on a deliberately thin budget, typically $40,000 a year or less for a household. The pot is smaller because the life is smaller.

Fat FIRE: fully retired now, on a generous budget, usually $100,000 a year plus. Requires a pot of $2.5 million or more, and generally a very large income during the accumulation years.

A fairer way to rank them: lean and fat FIRE are destinations, coast and barista FIRE are ways of changing the journey. Coasting keeps you working; what it ends is the version of your working life where you have no leverage.

How to calculate your coast FIRE number

Four steps, ten minutes.

Step 1: Pin down your retirement spending. Not your current salary, your actual expected annual spending in retirement. Look at what you spend now, subtract work costs and (with luck) a paid-off mortgage, add more travel and healthcare. Most people land between $40,000 and $80,000 a year.

Step 2: Multiply by 25. That is your target pot under the 4% rule. If you want a safety margin, multiply by 28 or 30 instead; more on why in the risks section.

Step 3: Pick a retirement age and a real return. 65 is the natural anchor for Americans because Medicare eligibility begins at 65. On returns, 7% real is the optimistic historical case for US equities; 5% real is the cautious planner's number. Run both.

Step 4: Discount the target back to today. Divide the target by (1 + return)^years. If your current invested balance is above the answer, congratulations, you are already coasting. If it is below, the gap tells you exactly how much more heavy lifting your savings rate has to do. That guide prices the examples in pounds, but the savings rate maths is universal; the percentages do not care which currency you earn in.

One subtlety: your coast number is a moving target in the healthiest possible way. Every year that passes without a crash, compounding pulls the required balance down relative to your actual balance. A 30-year-old with $100,000 invested is not coasting toward much at first glance, but at 7% real that balance becomes roughly $1.07 million by 65 with no further help.

What can go wrong: the criticisms and risks

Coast FIRE has sharp edges, and the loudest advocates tend to skip them.

The number is violently sensitive to your return assumption. Our 25-year-old needs $134,000 at 7% real returns. Rerun the same calculation at 5% real and the coast number is roughly $284,000, more than double. A two-point change in one assumption doubles the requirement. Anyone declaring themselves "done saving" off the back of the optimistic number is making a 40-year bet on the rosy scenario. Use 5% to 6% real for the decision, and treat the 7% outcome as upside.

Sequence of returns risk cuts both ways. While you are coasting and withdrawing nothing, a market crash costs you nothing but nerve; you are not selling, so paper losses stay on paper. But a coaster has also stopped contributing, which means nobody is buying the dip on your behalf, and a weak decade just before 65 can leave the pot genuinely short. The mechanics of why the order of returns matters more than the average are covered in our guide to sequence of returns risk, and they apply with full force in the last ten years of a coast.

Healthcare is the American-sized hole in the plan. Medicare does not begin until 65. A coaster who downshifts into freelance or part-time work without employer coverage is buying insurance on the ACA marketplace for potentially decades, and unsubsidised family premiums plus deductibles can run well past $20,000 a year. This single line item is why barista FIRE exists as a named strategy. Budget for it explicitly or the plan is fiction.

Social Security timing is a real variable too. Full retirement age is 67 for anyone born in 1960 or later, per the SSA, and claiming at the earliest age of 62 permanently cuts the benefit by around 30%. Coast FIRE plans that quietly assume a full benefit landing at 65 have the maths wrong on two counts.

And the behavioural risk: coasting can curdle into drifting. Stepping off the savings treadmill removes the forcing function that built the pot in the first place. Lifestyle inflation does not send a calendar invite. The coasters who do well treat the coast number as a checkpoint they keep monitoring, not a finish line they stop looking at.

When coasting actually makes sense

Now for the part the retirement industry will not say out loud. The "work until 67" default is a convenience for everyone except the worker, not a law of nature: employers get decades of compliant labour from people who cannot afford to leave, and the entire benefits architecture, from 401(k) vesting schedules to health insurance tied to employment, is built to keep it that way. A worker with a funded retirement and modest living costs has the one thing the system quietly prices at zero: the power to walk.

That is what the coast number actually buys: leverage, not idleness. Reaching "enough invested" at 32 or 40 converts the remaining decades of forced work into chosen work. You can take the interesting job over the lucrative one, drop to four days when the kids are small, retrain, start the small business, or simply stop tolerating a manager who relies on your mortgage for your obedience. None of that requires retiring. All of it requires the retirement question to be already answered.

Coasting fits best when three things are true. Your invested balance already clears the number on cautious assumptions. Your career has a humane, lower-paid version of itself you would genuinely enjoy. And you have solved health coverage without the corporate job. If any of the three is missing, the better move is usually to keep contributing through the boring middle a while longer; the years of grinding are precisely what make the coast years cheap.

And if you are somewhere in between, that is the normal case. Knowing you are 70% of the way to your coast number changes negotiations, career risks and household decisions long before you cross the line.

Further reading: JL Collins' The Simple Path to Wealth is the canonical American case for the low-cost index investing that makes coasting possible, and Bill Perkins' Die With Zero is the sharpest argument against saving long past the point your future is already funded. Disclosure: affiliate links - we may earn a small commission if you buy through them, at no cost to you.

Frequently Asked Questions

What is the difference between coast FIRE and regular FIRE?

Regular FIRE means your portfolio can fund your entire life today, so work becomes optional immediately. Coast FIRE means your portfolio will fund a normal-age retirement by itself, but you still work to cover current living costs. FIRE needs 25x your annual spending now; coast FIRE needs only the discounted fraction of that, which at age 30 can be under 15% of the full number.

How much money do you need to coast FIRE?

It depends on your age, retirement target and return assumption. At 7% real returns with a 65 retirement age, a 25-year-old needs about $6.70 invested per $100 of target, a 35-year-old about $13.10, and a 45-year-old about $25.80. For a $1.5 million target that is roughly $100,000, $197,000 and $388,000 respectively. Run your own inputs through our Coast FIRE calculator.

What is an example of coast FIRE?

A 30-year-old with $150,000 in retirement accounts wants $60,000 a year at 65, so a $1.5 million target. At 7% real returns over 35 years, money multiplies 10.7x, which puts the coast number at about $140,000. They are already past it: they can stop contributing entirely, take a lower-paid job they enjoy, and let compounding finish the pot on its own.

Why is it called coast FIRE?

The image is a cyclist cresting a hill. The early-career saving is the climb; the coast number is the summit. After that, compound growth carries the portfolio to the retirement target with no further pedalling. You coast, the money works.

How long will $500,000 last using the 4% rule?

The 4% rule has you withdraw $20,000 in year one and adjust that amount for inflation annually. It was designed around the worst 30-year periods in US market history, and in that historical data a diversified $500,000 portfolio managed this way lasted at least 30 years, though past results do not guarantee future ones. Whether $20,000 a year is enough to live on is the harder question, and for most American households it is a supplement, not a retirement.

What is the $1,000 a month rule for retirement?

A planner's rule of thumb: for every $240,000 you have invested at retirement, you can draw about $1,000 a month. That implies a 5% withdrawal rate, which is more aggressive than the 4% rule, so treat it as a quick mental benchmark rather than a plan. Wanting $5,000 a month from your portfolio points to a pot of $1.2 million on this rule, or $1.5 million at the more cautious 4%.

Is $2 million enough to retire at 45?

At a 4% withdrawal rate, $2 million produces $80,000 a year before tax, which funds a comfortable life in most of the country. The catch is the horizon: a 45-year-old may need the money to last 50 years, not 30, so many planners would model 3.3%, about $66,000. Add 20 years of health insurance before Medicare at 65 and $2 million is enough for a careful retirement at 45, not a lavish one.

You can find more of our US-edition writing at /us/articles.

This article is general information for a US audience, not financial, tax or insurance advice. Investing puts your capital at risk: values fall as well as rise, and the 5% to 7% real returns used here are assumptions for illustration, not forecasts or promises. Past performance does not guarantee future results. US contribution limits, Social Security rules and Medicare eligibility can change. Your own numbers depend on your circumstances.