Coast FIRE Calculator

Understanding the Coast FIRE calculator — concept and principle

Coast FIRE is the point at which your existing investments, left alone with no further contributions, are expected to grow into your full retirement target by your chosen retirement age. Once you reach it, you only need to earn enough to cover today's living costs; retirement saving can stop. This calculator finds your Coast FIRE number and how far you are from it.

How it is calculated

• FIRE target T = annual spending at retirement ÷ withdrawal rate
• Coast FIRE number = T ÷ (1 + real return)^(retirement age − current age)
• Your savings grow to = current savings × (1 + real return)^(years)
• Gap = Coast FIRE number − current savings (zero if you are already there)

Spending is in today's money, so the return must be a real return, after inflation.

The principle

This is a present value calculation run backwards. Money invested today compounds for the whole time to retirement, so a sum far smaller than your target can grow into it. With 28 years at 5% real, every dollar becomes about 3.92 dollars, which means you need only about a quarter of the target today. The withdrawal rate converts spending into a target: at 4%, the target is 25 times annual spending, a figure drawn from US historical studies of how long portfolios lasted in retirement.

Worked example

1. Age 32, retire at 60, spending $40,000 a year, savings $120,000, real return 5%, withdrawal rate 4%.
2. FIRE target = 40,000 ÷ 0.04 = $1,000,000.
3. Years to grow = 60 − 32 = 28; growth factor = 1.05²⁸ ≈ 3.920.
4. Coast FIRE number = 1,000,000 ÷ 3.920 ≈ $255,094.
5. Your $120,000 would grow to about $470,415 by 60, so you need $135,094 more today to coast.

How to read the result

If your savings already exceed the Coast FIRE number, further saving only adds safety or lets you retire earlier. If not, the gap shows how much more you need now; because it compounds too, money added in your thirties counts far more than money added later. Test lower returns such as 3–4% real and a lower withdrawal rate: both raise the number noticeably.

Common mistakes

• Using a nominal return with spending in today's money.
• Assuming you will never touch the money before retirement.
• Forgetting that state or workplace pensions can reduce the spending the portfolio must cover.

Frequently asked questions

Can I stop saving once I hit Coast FIRE?

For retirement, in principle yes, if returns match your assumption. Many people keep saving a little as a buffer.

How is Coast FIRE different from Lean or Fat FIRE?

Lean and Fat FIRE describe the spending level of the target. Coast FIRE describes when you stop contributing.

What real return should I use?

There is no single right figure. Test a range, for example 3% to 6%, to see how sensitive your number is, and plan around a cautious value.

Sources: Bengen, W. P. (1994). Determining Withdrawal Rates Using Historical Data. Journal of Financial Planning · Standard time value of money mathematics (present value)