Coast FIRE is a milestone, not a retirement. It is the point where you have saved enough that, if you never added another dollar to your investments, compound growth alone would still carry you to full financial independence by the retirement age you choose. After that point you only need your work to cover your current living costs. You can take the lower-paid job you actually want, go part time, or start the business, because the retirement saving is already done, in the sense that matters: the money is in place and time is doing the rest. This guide shows how the number is calculated, why the return assumption moves it more than anything else, and how Social Security and a pension fit in, so you can judge whether the calculator result is a plan or a hope.

The two-step formula

The Coast FIRE calculation is two steps, and both are simple. Step one finds the destination: your FIRE number, the portfolio that could support your retirement spending indefinitely at your chosen withdrawal rate. The classic version uses the 4 percent rule, which says that withdrawing 4 percent of a portfolio in the first year of retirement, then adjusting for inflation, has historically lasted for 30-year retirements in US market history. The reciprocal of 4 percent is 25, so the FIRE number is annual retirement spending multiplied by 25. Spending 60,000 dollars a year needs a portfolio of 1,500,000 dollars. Spending 40,000 dollars a year needs 1,000,000 dollars. The spending figure must be retirement spending, in present-day dollars, including the costs people forget: health insurance before Medicare, home maintenance, and taxes on withdrawals.

Step two works backwards from the destination to today. If the FIRE number must be reached in a given number of years, and the portfolio grows at an assumed annual return, then the amount needed today is the FIRE number divided by 1 plus the return, raised to the number of years. That is the present value of the FIRE number, and it is the Coast FIRE number. The formula assumes no further contributions, no withdrawals, a constant return, and that the return is a real return, after inflation, because the FIRE number is stated in present-day dollars. Mixing a nominal return with a present-day spending figure is the single most common error in Coast FIRE arithmetic, and it understates the number badly.

Put the two steps together and the full formula reads: Coast FIRE number equals annual retirement spending, times 25, divided by 1 plus the real return, raised to the years until retirement. Every input is a choice, and every choice should be visible. The spending figure is yours. The withdrawal rate is yours, and 25 is only the 4 percent version of it: a 3.5 percent withdrawal rate uses a multiplier of about 28.6, and a 3 percent rate uses 33.3. The return is an assumption about decades, and the years are the gap between today and the retirement age you choose. Change any one and the answer moves, which is the point of the calculator: it lets you see the sensitivity instead of trusting a single number.

Worked example: 60,000 dollars of spending at 30

Take a 30 year old who expects to spend 60,000 dollars a year in retirement, plans to retire at 65, and assumes a 5 percent real return. Step one: 60,000 times 25 is a FIRE number of 1,500,000 dollars. Step two: 35 years of compounding at 5 percent multiplies money by 1.05 to the power of 35, which is about 5.516, so the Coast number is 1,500,000 divided by 5.516, about 271,935 dollars. Invest 271,935 dollars today, add nothing more, earn 5 percent after inflation every year for 35 years, and the portfolio reaches 1,500,000 dollars at 65. The arithmetic is exact. The future is not. The value of the example is that it shows the shape: a large sum today, a long runway, and a result that depends entirely on the return actually arriving.

Now run the same person at a 7 percent real return, the figure many Coast FIRE examples use. The compounding factor over 35 years is 1.07 to the power of 35, about 10.677, so the Coast number falls to about 140,494 dollars, roughly half the 5 percent figure. That gap, about 131,000 dollars, is the price of two percentage points of assumed return, and it is why the return assumption deserves more attention than any other input. A 7 percent real return sustained for 35 years is at the optimistic end of what diversified portfolios have delivered, and it leaves no room for a bad decade, a career break, or a change in spending. The calculator default sits in this range, so treat its headline number as the optimistic case and rerun it at 5 percent before making any life decision on it.

A third version of the same example shows the effect of starting later. At 40, with 25 years to 65, the 7 percent Coast number on the same 1,500,000 dollar target is about 276,374 dollars, and at 50, with 15 years, it is about 543,669 dollars. The number roughly doubles every decade of delay, because each decade of compounding removed must be replaced by money today. That is the arithmetic behind the advice to start early, and it is also the arithmetic behind the relief Coast FIRE offers: once the number is reached, the doubling works for you, and the years do the saving that contributions used to do.

The return rate moves the number more than the saving does

Most people approach Coast FIRE by asking how much more they must save. The formula says the more powerful question is what return to assume, because the return is exponentiated while the saving is not. Doubling your monthly contribution moves the date you reach Coast FIRE by months. Raising the assumed return by two points halves the Coast number itself. That asymmetry is dangerous in one direction and useful in the other: dangerous because it tempts people to assume a high return and declare victory early, useful because it shows that a conservative assumption is cheap insurance. Rerunning the calculation at 3, 5, and 7 percent and planning to the middle or low result costs nothing and protects against the most likely disappointment, which is a decade of returns below the long-run average.

What return should you assume? Long-run US stock market returns have averaged around 10 percent a year before inflation and around 7 percent after inflation, over very long periods, for a portfolio invested entirely in stocks. A diversified portfolio with bonds returns less, and a portfolio held through a bad sequence of years returns less still in the years that matter. A planning assumption of 5 percent real for a stock-heavy portfolio, or lower for a balanced one, is defensible and cautious. A planning assumption of 8 or 9 percent real is not a plan; it is a hope that the next 35 years beat the last century. The honest approach is to carry two numbers: the Coast number at your central assumption, which tells you where you stand, and the Coast number at a lower assumption, which tells you how much margin you have. If the two are far apart, the margin is the message.

Sequence matters as much as the average. The formula assumes a smooth return every year, and real markets do not deliver smooth returns. A portfolio that averages 7 percent with a sharp fall early and a recovery late ends in a different place from one that averages 7 percent smoothly, and for a coasting portfolio the early years matter most, because that is when the balance is smallest and the compounding has the longest to run. The calculator trajectory on the hub page shows this in miniature: the savings line and the Coast line race each other, and the gap between them is the margin. Keep the margin wide, keep contributing if you can even after reaching Coast, and treat the Coast number as a floor to stand on rather than a ceiling to stop at.

The Coast number at every age

The table below holds spending, target, and return fixed, at 60,000 dollars of annual spending, a 1,500,000 dollar FIRE number, and a 7 percent real return, and varies only the age, with retirement at 65. It is the hub calculator trajectory in tabular form, and it shows the doubling pattern clearly: each decade of delay roughly doubles the amount needed today. The last row is the definition of full FIRE: at 65, with no years left to compound, the Coast number equals the FIRE number itself.

Spending $60,000 a year, FIRE number $1,500,000, real return 7 percent, retirement at 65.

Read the table as a map, not a verdict. A 25 year old with 100,171 dollars invested is in a remarkable position, and a 55 year old with 762,524 dollars invested is in a strong one, but the table says nothing about how either got there, and nothing about what happens if spending rises, the return falls, or retirement comes earlier than 65. Retiring at 60 instead of 65 removes five years of compounding and raises every number in the table: at 7 percent, five years is a factor of about 1.40, so the age-30 Coast number rises from about 140,494 dollars to about 197,000 dollars. The retirement age is as powerful an input as the return, and it is the one most fully in your control.

Social Security and pensions: subtract first, then multiply

Social Security and pension income do not add to your Coast FIRE number. They subtract from the spending your portfolio must cover, which reduces the FIRE number, which reduces the Coast number. The order matters: subtract the expected annual benefit from annual spending first, then multiply the remainder by 25. Suppose the 30 year old above expects 24,000 dollars a year from Social Security in retirement. The spending the portfolio must cover falls from 60,000 dollars to 36,000 dollars. The FIRE number falls from 1,500,000 dollars to 900,000 dollars. The Coast number at 7 percent over 35 years falls from about 140,494 dollars to about 84,297 dollars. The benefit did more work than a decade of saving, because it is subtracted before the multiplier, not after it.

Three cautions belong with that arithmetic. First, the benefit figure is an estimate, not a promise: Social Security benefits depend on your earnings record, the age you claim, and future law, and the figure on your statement is an estimate at a stated claiming age, not a guarantee. Use the estimate for your planned claiming age, and consider running the calculation with a reduced benefit as a stress test. Second, timing matters: Social Security typically starts years after an early retirement, so the portfolio must cover full spending in the gap years before benefits begin, and a Coast calculation that assumes the benefit from day one understates the need. Third, pensions vary enormously: a pension with cost-of-living increases behaves like Social Security in this arithmetic, while a fixed pension that does not rise with inflation covers less spending every year, and a pension that starts at 65 does not help a retirement at 55. Model each income stream at its own start date and its own inflation treatment, and do not let a single combined figure hide the gaps.

The same subtract-first logic applies to any reliable income in retirement: rental income net of costs, a working spouse income that will continue, or part-time work you genuinely intend to keep. What does not belong in the subtraction is unreliable income: an inheritance that may not arrive, a business sale at an assumed price, or investment income already counted in the portfolio return. Count each dollar of future income once, in one place, and the Coast number stays honest. Count it twice, once as income and once as portfolio growth, and the number flatters you into stopping too soon.

Coast FIRE, Barista FIRE, and full FIRE

The FIRE family has three members, and Coast is the middle one. Full FIRE means the portfolio already covers all spending: you can stop working entirely. Coast FIRE means the portfolio will cover all spending by retirement age, with no further contributions: you must still work, but only to cover current living costs. Barista FIRE means you have semi-retired: you work part time, often in a lower-paid job with benefits, to cover some spending while the portfolio continues to grow, and you may or may not have reached Coast already. Barista FIRE is a way of working; Coast FIRE is a balance-sheet fact. The two combine well: reaching Coast and then taking barista work is the classic Coast FIRE life, because the part-time income covers living costs, the portfolio coasts, and the work is chosen rather than endured.

Lean FIRE and Fat FIRE describe the spending level rather than the stage: Lean FIRE is independence on low spending, Fat FIRE is independence on high spending, and the Coast arithmetic works identically for both, with the spending figure changed. A Lean FIRE target of 30,000 dollars a year gives a FIRE number of 750,000 dollars and a Coast number at 30, at 7 percent, of about 70,247 dollars. A Fat FIRE target of 120,000 dollars a year gives a FIRE number of 3,000,000 dollars and a Coast number of about 280,989 dollars. The method is the same. Only the spending, and therefore the life, differs, which is why the spending estimate deserves more care than any other input: it is the only input that is also a life decision.

What the formula leaves out

The formula leaves out taxes, and taxes are not small. Withdrawals from traditional retirement accounts are taxed as income, Roth withdrawals are not, and taxable account withdrawals carry capital gains treatment, so the same portfolio balance supports different amounts of spending depending on where it sits. A FIRE number built on pre-tax balances overstates the spending it can support. The correction is to work in after-tax spending and after-tax balances, or to gross up the FIRE number for the tax you expect to pay. The hub calculator does not model tax, so carry the correction yourself: estimate the tax on the withdrawal pattern you expect, add it to annual spending, and rerun the calculation.

The formula also leaves out health costs, long-term care, and the cost of a gap in coverage between leaving employer insurance and Medicare. It leaves out the possibility that spending rises in retirement rather than staying flat, and the possibility that the retirement age moves. It assumes the portfolio is invested and stays invested through falls, which is a behavioural assumption, not a mathematical one. And it assumes no further contributions, which is a definition, not a recommendation: most people who reach Coast keep saving, because the margin it buys is worth more than the spending it would fund. Treat the Coast number as the point where saving becomes optional, not the point where it becomes pointless.

Mistakes: nominal returns, gross spending, and moving targets

The first mistake is the nominal return: using a 10 percent historical stock return against present-day spending, which double counts inflation and understates the Coast number by roughly half over 35 years. Always use a real return with present-day spending, or a nominal return with future-dollar spending, and never mix the two. The second mistake is gross spending: using take-home pay, or pre-retirement spending including the mortgage that will be gone and the saving that will stop, instead of retirement spending. Build the retirement budget from the retirement life, line by line, and include the costs that start in retirement, like health insurance, alongside the costs that stop.

The third mistake is the moving target: recalculating the Coast number every month on a rising market and declaring victory at a peak, or recalculating after a fall and declaring defeat at a trough. The Coast number moves with markets because the balance moves, but the target moves slowly, with spending and age. Recalculate once a year, on the same date, with the same assumptions, and judge the trend over years, not the level on any one day. The fourth mistake is stopping all saving the day Coast is reached and spending the freed income to the last dollar. Coast means the retirement is funded if the assumptions hold. The assumptions will not all hold. Keep a margin, keep some saving, and let Coast be the freedom to choose work you like, not the freedom to stop thinking about money.

Frequently asked questions

What is my Coast FIRE number?

It is your FIRE number divided by 1 plus your assumed annual real return, raised to the years until your retirement age. Your FIRE number is your expected annual retirement spending multiplied by 25 at a 4 percent withdrawal rate. For example, 60,000 dollars of spending gives a 1,500,000 dollar FIRE number, and at a 7 percent real return with 35 years to run, the Coast number is about 140,494 dollars. Rerun the calculation at a lower return to see how much margin you have.

What is the difference between Coast FIRE and Barista FIRE?

Coast FIRE is a balance-sheet milestone: you have enough invested that growth alone reaches your FIRE number by retirement, with no further contributions, and you still need work to cover current living costs. Barista FIRE is a way of working: you semi-retire into part-time work, often for benefits, while the portfolio keeps growing. The two combine naturally, since part-time work can cover living costs while the portfolio coasts, but Barista FIRE does not require having reached Coast first.

Does Coast FIRE include Social Security?

It should, as a subtraction from spending, not as an addition to the portfolio. Subtract your expected annual Social Security benefit from your annual retirement spending first, then multiply the remainder by 25 to get the FIRE number, then discount to today. A 24,000 dollar benefit on 60,000 dollars of spending cuts the FIRE number from 1,500,000 dollars to 900,000 dollars. Use the benefit estimate for your planned claiming age, and remember the portfolio must cover full spending in the years before benefits begin.

What return rate should I use for Coast FIRE?

Use a real, after-inflation return, because the FIRE number is in present-day dollars. A planning assumption of around 5 percent real for a stock-heavy portfolio is cautious and defensible; 7 percent real is at the optimistic end of long-run diversified returns. Never use a nominal return of around 10 percent against present-day spending, since that double counts inflation and understates the Coast number. Carry two results, at a central and a lower return, and plan to the lower one.

Can I stop saving once I reach Coast FIRE?

By definition, yes: the calculation assumes no further contributions. In practice, most people keep saving something, because the calculation also assumes a constant return, no tax surprises, and spending exactly as estimated for decades. Treat reaching Coast as the point where saving becomes optional and work becomes a choice, not as a reason to spend every freed dollar. Keep a margin against the assumptions that will not all hold.

Is Coast FIRE the same as being financially independent?

No. Financial independence means the portfolio covers your spending today. Coast FIRE means the portfolio will cover your spending by your chosen retirement age, if growth arrives as assumed, and you must still earn enough to live on until then. Coast is reached years or decades before full independence, which is its appeal: it brings the freedom to choose lower-paid or part-time work long before full retirement is affordable.