Coast FIRE Calculator - Coasting to FI

Using this calculator

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.

• On the left, start by entering your current age and the age you plan to retire.
• Then enter the amount you plan to spend annually in retirement. Note that in many cases, this number will be less your current spending, because (1) you will be covered by Medicare and (2) you may have paid off your primary residence, so you no longer have to pay a mortgage.
• In the Current Net Worth box, enter the amount that you currently have invested. For example, if you have $100,000 invested in the stock market (perhaps through your employer's 401k) and $25,000 saved in your emergency fund, then you should enter $100,000 in this field.
• Use the sliders to adjust the rates and watch the graph to the right immediately react to your change!
• Investment rate of return is the average return that you expect your investments to grow, not adjusted for inflation. This calculator uses 7% as a default Investment rate of return, which is a relatively conservative assumption. Historically, the S&P 500 has returned on average 10% annually from its inception in 1926 to 2018.
• Inflation rate is the average annual rate of inflation that you expect to experience in the future. Historically, the US economy has experienced an annual average inflation rate of 3%.
• Safe Withdrawal Rate (SWR) is the estimated percentage of your net worth that you expect to withdraw to cover your living expenses in retirement. 4% is widely considered as the recommended SWR for retirement planning. This 4% withdrawal rate was found by the Trinity Study to have a 100% success rate over a 30-year retirement horizon with a 50% / 50% mix of stocks and bonds.

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!

The math behind the calculator

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 )

But what about inflation?

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 2020 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.