Coast FIRE is when you have enough in your retirement accounts that without any additional contributions, your net worth will grow to support retirement at a traditional retirement age.
Once your net worth has passed the Coast FIRE milestone, you still need to earn enough to cover your monthly cost of living, but you no longer need to save money for retirement. If you save up and invest enough money early enough in life, you can allow your existing investments to compound over time and grow to be enough to retire on at a traditional retirement age. This strategy of "Coasting to FIRE" gives you the freedom to pursue a different job that pays less, shift to working part-time, or just have more spending money to enjoy life.
To learn more about the details and math behind Coast FIRE, checkout my post: What is Coast FIRE: The Complete Guide to Coasting to Financial Independence.
This interactive calculator makes it easy to calculate and visualize the growth of your current investments as you plan your journey of Coasting to Financial Independence.
The green line on the graph represents the growth of your current net worth over time with the monthly contribution that you input. The blue line on the graph shows the amount at each age you need to have saved and invested to reach the Coast FIRE milestone. You can see how these curves shift relative to each other as you adjust the sliders. If your net worth is greater than your Coast FIRE number, then you have reached Coast FIRE!
First, let's recall how to calculate your regular FIRE number:
(FIRE number) = (annual spending) / SWR
This calculator uses the compound interest formula:
A = P * ( 1 + n)^t
Here A is the final amount, P is the principle (initial amount), n is the annual growth rate, and t is the time in years. We can set our final amount A to be equal to our FIRE number and then solve for P, the initial amount, which is our Coast FIRE number. This gives us:
(Coast FIRE number) = (annual spending) / ( SWR * (1 + n)^t )
Inflation is an important variable to account for when planning for retirement decades in the future. It is almost certain that we will experience inflation in the future, and for this reason having your money invested in assets and not all stuffed under your mattress is crucially important. Assets like stocks and real estate tend to rise with inflation while cash loses value, meaning the best way to preserve your wealth in times of high inflation is to be invested in these assets.
Don't worry about inflation, it's built-in to the calculator! This calculator accounts for inflation by subtracting the inflation rate (from the input slider) from the investment growth rate of return. This gives an inflation-adjusted rate of return which is then used to calculate your Coast FIRE number and draw the graph. With this approach, all the numbers in the calculator are adjusted to be in today's dollars. Think about it like this - you don't have to worry about cost-of-living increases because it's already skimmed off of your expected investment returns.
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