The milestone between saving hard and being done
Full financial independence is a long way off for most people, and a target that far away is difficult to feel. Coast FIRE is a nearer milestone with a concrete meaning: the point at which the portfolio no longer needs your help. Cross it and the compounding already under way is sufficient, on your assumptions, to reach the full number by your target date without another dollar going in.
That changes what work is for. Before the coast point, part of every paycheque is buying your retirement. After it, your income only has to cover today's living costs, which is what makes the classic Coast FIRE moves possible — dropping to four days a week, moving to a lower-paid job with better hours, taking a year out, or the “Barista FIRE” version where part-time work covers expenses and health cover while the portfolio finishes the job on its own.
The number falls dramatically the earlier you reach it, because the discount period is longer. Aiming at a $1.5 million target at 65 with a 5% real return, a 25-year-old needs $213,069 and a 45-year-old needs $565,334 — 2.65 times as much for the same eventual outcome. That factor is exactly 1.0520, which is the whole argument for saving early stated as a single number.
Two steps, and why the return must be real
Step one: the FIRE number. Divide annual spending by your planned withdrawal rate. At 4%, spending of $60,000 needs $1,500,000, because 4% of $1.5 million is $60,000. The withdrawal rate is doing a lot of work here and it is the assumption most worth stress-testing — the safe withdrawal rate calculator and the FIRE number calculator both interrogate it directly.
Step two: discount it back. Divide the FIRE number by (1 + r)N, where N is the years until your target age. This is present value, the same operation used to price a bond, applied to a retirement target instead of a coupon.
The return has to be a real return — after inflation — because the spending figure is in today's dollars. Mixing a nominal return with today's spending is the single most common error in FIRE arithmetic and it always flatters the result. At 8% nominal with 3% inflation the real rate is 1.08 ÷ 1.03 − 1 = 4.854%, not 5%; the real return calculator does that conversion properly.
The coasting age is subtler than it looks, because the target is moving. As you get older the number of remaining compounding years falls, so the balance you would need to coast rises — at exactly the real rate of return. A portfolio with no contributions therefore grows at precisely the speed the requirement does, and never closes the gap. Only contributions close it. Setting balance(t) equal to Ccoast(1 + r)t and solving gives the closed form in the formula box, and it also explains the calculator's warning when contributions are zero.
Worked example: 35 years old, $60,000 of spending, retiring at 65
Using the calculator's defaults: a 4% withdrawal rate, a 5% real return, $150,000 invested and $1,500 a month going in.
- FIRE number. $60,000 ÷ 0.04 = $1,500,000.
- Years of compounding. 65 − 35 = 30.
- Growth factor. 1.0530 = 4.321942. Every dollar invested today becomes $4.32 of purchasing power by 65.
- Coast number. $1,500,000 ÷ 4.321942 = $347,066.17.
- Where you stand. $150,000 − $347,066.17 = −$197,066.17, so you hold 43.2% of the coast number.
- What you have already secured. $150,000 × 4.321942 = $648,291.36 at 65 even if you never save again — 43.2% of the target, the same share, because both sides compound identically.
- When you can coast. Annual contributions are $18,000. Solve 0.05 × ($347,066.17 − $150,000) ÷ $18,000 = 0.547406, then t = −ln(1 − 0.547406) ÷ ln(1.05) = −ln(0.452594) ÷ 0.0487902 = 16.25 years.
- Read the age. 35 + 16.25 = 51.25. From that birthday onward, contributions become optional.
Steps 5 and 6 give the same percentage, and that is not a coincidence. The share of the coast number you hold today is identical to the share of the FIRE number you have already locked in, because both quantities grow by the same factor over the same period. It is the most useful single statistic on this page: 43.2% means compounding is already delivering 43.2% of your retirement, and your savings rate has to supply the rest.
How much confidence the number deserves
The coast number is exquisitely sensitive to the real return, and the sensitivity grows with the horizon because the assumption is raised to the power of N. At 30 years, dropping from 5% real to 4% cuts the growth factor from 4.321942 to 1.0430 = 3.243398, moving the coast number from $347,066 to $462,478 — 33.2% more money for a single percentage point. Anyone treating a coast calculation as a decision to stop saving should run it at a return one to two points below their central assumption and check that they still like the answer.
The withdrawal rate matters just as much and in the opposite direction. Moving from 4% to 3.5% raises the FIRE number from $1,500,000 to $1,714,285.71 and the coast number in the same proportion, to $396,646.48. A 3.5% rate is a common choice for anyone retiring early, precisely because a 4% rule derived from thirty-year retirements is being asked to survive forty or fifty.
Sequence risk sits outside this model entirely. A constant real return cannot represent a decade of poor returns early in the coasting period, and that is the scenario in which a coast plan quietly fails: the balance ends up below target with no contributions running to make up the difference. The practical defence is not to abandon coasting but to re-run the calculation annually and be willing to resume saving if the balance falls below the requirement line in the table above.
Two things the number never covers. It says nothing about the years between now and retirement — health insurance, a mortgage, dependants — which is what actually determines whether you can afford to cut your income. And it assumes the spending figure is right, which for a decision spanning thirty years is a bigger assumption than the return. Overstate spending by 20% and the coast number rises 20%; understate it and the whole plan is built on the wrong target.
Coast FIRE number by age for a $1.5M target at 65
| Age today | Years to 65 | Growth factor | Coast FIRE number |
|---|---|---|---|
| 25 | 40 | 7.039989 | $213,068.60 |
| 30 | 35 | 5.516015 | $271,935.60 |
| 35 | 30 | 4.321942 | $347,066.10 |
| 40 | 25 | 3.386355 | $442,954.05 |
| 45 | 20 | 2.653298 | $565,333.95 |
| 50 | 15 | 2.078928 | $721,526.00 |
| 55 | 10 | 1.628895 | $920,869.88 |
Each five-year step multiplies the requirement by 1.05⁵ = 1.276282, because that is exactly the compounding you no longer have time to receive. The 25-year-old's figure is 14.2% of the target; the 55-year-old's is 61.4%.
Assumptions and limits to keep in view
- The return is constant and real. No sequence risk, no volatility, no variance drag. A bumpy 5% compounds to less than a smooth 5%, so use a realised compound rate rather than an average of annual returns.
- Taxes are ignored. The mix of pre-tax, Roth and taxable accounts changes what a given balance can actually spend, sometimes by a fifth or more.
- Social Security is excluded. Including it lowers the spending the portfolio must cover and therefore lowers both numbers — the break-even calculator shows how much the timing of a claim is worth.
- Spending is treated as flat in real terms. Most retirement spending is not: it tends to be higher early, lower in the middle, and higher again for care costs.
- Access matters as well as size. Money in a workplace plan may not be reachable at the age you want to stop working, which is a separate constraint from the total.
- Coasting is reversible. Nothing forces you to stop saving at the coast point, and re-checking each year against the requirement line is what makes the strategy robust.
Coast FIRE among the other FIRE variants
Lean, regular and fat FIRE differ only in the spending assumption, so all three run through the same two steps on this page. Change the annual spending figure and both the FIRE number and the coast number move proportionally.
Barista FIRE is Coast FIRE with a job attached. The portfolio is left to compound while part-time work covers current expenses, often chosen for health coverage as much as for income. Arithmetically it is identical to coasting; the difference is that the wage requirement is your living costs rather than your living costs plus savings.
Full FIRE is the point where the portfolio covers spending now rather than later, which is what the years to financial independence calculator solves for. Coast FIRE always arrives first and usually by a wide margin, because it only requires the seed rather than the harvest.
If your question is not “can I stop saving?” but “when do I hit a specific number at my current rate?”, the goal timeline calculator solves that directly and accepts a real return in the same way. And if you want to check the target itself rather than the path to it, the retirement savings needed calculator approaches the same problem from the spending side. Run at least two of them before making a decision as consequential as reducing your income.