Are you looking for a less intense way to achieve F.I.R.E. (Financial Independence/Retire Early)? Look no further than Coast FIRE!

Coast FIRE is arguably the simplest and most effective way to join the FIRE movement. It provides a clear and concise path to FIRE without all the overwhelming financial jargon.

My Wife and I hit Coast FIRE this year, allowing us to quit our 9-5 jobs, move abroad to China, and more fully pursue our passions in life! 🙂

Here is my YouTube video going over this content (if you prefer to watch it instead).

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What is Coast FIRE?

Ocean and beach with words "COAST FIRE, relaxing lifestlye, flexibility, investments still grow, puruse passions"
Coast FIRE Benefits

Coast FIRE is a popular retirement strategy involving saving enough money so your nest egg can grow without additional contributions. Once you reach Coast FIRE, you no longer need to work to save for retirement; instead, you only work to pay for current living expenses. This allows you to enjoy a more relaxed lifestyle and focus on activities you enjoy rather than working simply to earn a paycheck.

To achieve Coast FIRE, it is essential to start saving early and invest in a diversified mix of assets. Coast FIRE provides individuals with financial security in retirement and is an excellent option for those looking to retire at the typical retirement age.

How Much Should You Save to Reach Coast FIRE?

Coast FIRE calculation considers variables like age, income, and expenses to determine how much you need to save each month to reach your goal.

While no fixed sum will satisfy everyone’s retirement needs, a rough estimate is often considered 25 times your annual expenses, which is your FI or FIRE number.

Let’s say your monthly expenses at retirement will be $1,300 a month; you will need $15,600 (1,300 x 12) a year and $390,000 (15,600 x 25) to cover expenses for 25 years.

This is based on the 4% principle, which states that you can withdraw 4% of your savings each year without running out of money.

You will want to ensure you have enough in your investment accounts to grow passively without contributions so that it can grow and reach your FIRE number by the time you retire.

Once you hit that number, you will have reached Coast FIRE!

Coast FIRE can be a helpful tool for anyone who wants to retire early or achieve financial independence.

The Coast FIRE approach is simple: you save a certain percentage of your income and invest it in a way that will generate a passive income stream. However, there are a few key components that you need to be aware of before beginning.

  • First: you must calculate how much you need to save to reach your retirement goals.
  • Second: you need to choose the right investment vehicle for your needs.
  • Third, estimate how long you’ll need to keep your money invested.

Coast FIRE example

The formula for determining a Coast FIRE number begins with a regular FIRE number, estimated to be 25 times annual spending.

So, for example, if someone spends $50,000 annually, their regular FIRE number would be $1,250,000.

The Coast FIRE number is then determined by dividing the regular FIRE number by (1+annual growth rate) to the power of “years to grow.”

In the example above, if it is assumed that it will take 30 years to reach the regular FIRE number, and the average annual growth rate over those 30 years is 7%, the calculation would be $1,250,000 / (1 + 0.07)^30 years = $164,209.

Therefore, the Coast FIRE number in this example would be $164,209. It should be noted that this number is only an estimate and may vary depending on individual circumstances.

Nevertheless, it provides a helpful starting point for anyone looking to save for a comfortable retirement.

To sum things up, here are two ways to calculate your Coast FIRE number

  1. Use the formula from the example above. You can adjust your annual return rate and use this exponent calculator. Then divide that number by your FIRE number.
  2. Use a reliable investment calculator to see how much your investments will grow without added contributions.

What Are the Benefits of Coast FIRE?

Person relaxing while enjoying flexible work on the couch with computer since they have reached Coast FIRE.

1. You can achieve financial independence and retire early.

The real reason you want to achieve FIRE is to retire early and live life on your terms. And Coast FIRE makes this possible!

Once you reach your Coast FIRE number, you can quit your job and enjoy a life of leisure. All you need is to work or have passive income streams to cover daily expenses.

2. You don’t have to worry about outliving your savings.

How many people do you know who are worried about running out of money in retirement? With Coast FIRE, you don’t have to worry about this.

As long as you have your Coast FIRE number saved up, you can live off of your passive income for the rest of your life, no matter how long you live.

3. You can still retire even if your investment portfolio takes a hit.

We all know that the stock market is volatile, and it’s impossible to predict what will happen in the future.

However, with Coast FIRE, you don’t have to worry about this. Even if your investments take a hit, you can still retire if you have your Coast FIRE number saved up and have other fail-safes in place (diversified investments, emergency savings, passive income streams).

What Are the Risks of Coast FIRE?

Magnifying glass looking at blocks that spell RISK

1. Not saving enough consistently

The biggest risk of Coast FIRE is that you might not reach your Coast FIRE number if you don’t save enough.

This is why it’s so important to ensure you’re saving as much as you can each month. I wrote another article with 12 saving money tips and How We Save 56% of Our Income as a family.

If you don’t think you can save enough, think of ways you can decrease spending and increase income.

One way you can increase your savings and investments is by mico-investing.

ACORNS is a popular platform that can round up money from purchases and automatically allocate those funds to diversified investments.

You can check them out today and receive a $20 bonus investment!

2. Losing patience and quitting

Another risk of Coast FIRE is that you might not be able to retire as early as you want. This is because it can take a long time to reach your Coast FIRE number.

If you’re not patient, you might get frustrated and give up on the whole idea, but the truth is that anyone can reach financial freedom through hard work and perseverance.

3. Lack of discipline and focus

When life gets comfortable, we tend to get lazy with finances. Once you hit Coast FIRE, life may seem easier, but it’s important to monitor all money decisions and transactions constantly. You cannot all of suddenly increase spending and get into debt.

This is especially true if you hit Coast FIRE and have passive income streams covering all expenses.

Just make sure not to miss anything with your finances and ensure all expenses are accounted for. If you own your own business, make sure you have the proper legal protection.

Flamingo FIRE And Coast FIRE Differences

For those who don’t know, Flamingo FIRE is where you work until you have saved up half or 50% of your FIRE number. Then you can semi-retire and let investments grow passively to retire within 10-15 years fully. Depending on your age, this could be less time coasting and more quickly hitting FIRE.

Flamingo FIRE is a great option for those who are okay with sacrificing longer to build up investments that reach 50% of their nest egg number.

Barista FIRE And Coast FIRE Differences

Barista FIRE is where you work part-time to collect health insurance benefits. It’s called Barista FIRE because Starbucks gives health insurance to those working part-time.

Many people in the FIRE movement work at Starbucks as baristas simply for health insurance benefits.

Healthcare costs can get out of hand, especially as you age. And if a good health insurance plan does not cover you, you could end up bankrupt.

So, Barista FIRE is an excellent option for those who want to ensure they’re covered by health insurance.

The difference between Barista FIRE and Coast FIRE is that you have a job. You’re still working, but the sole purpose behind your employment is health insurance and not much more.

In Conclusion

As with any FIRE strategy, there are risks and rewards. It’s essential to understand both before you decide if Coast FIRE is right for you. But if you’re looking for a FIRE strategy that doesn’t require much work and that you can do from anywhere in the world, Coast FIRE might be the perfect option.

As you look at the different forms of FIRE, you’ll find that each has its unique set of pros and cons. It’s important to understand these before you decide which form of FIRE is right for you.

Coast FIRE is a great way to semi-retire early and enjoy life without worrying about money. That’s what FIRE is all about. So, if you’re looking for an easy and stress-free way to join the FIRE movement, Coast FIRE might be right for you.


We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!