The Coast FIRE Calculator helps you determine the amount of money you need to invest today (the Coast FIRE Number ) to reach financial independence by your retirement age, assuming no further contributions. Here’s how it works:
Coast FIRE Calculator
Coast FIRE (Financial Independence, Retire Early) is a financial strategy where individuals save and invest aggressively in their early years so that their portfolio can grow without additional contributions. This allows them to "coast" to retirement, covering only their current expenses through active income until their investments mature.
How Does a Coast FIRE Calculator Work?
A Coast FIRE calculator helps determine how much you need to invest early to reach financial independence without further contributions. It considers factors such as current savings, expected return on investments, annual expenses, and inflation.
Key Inputs for the Coast FIRE Calculator
To accurately calculate your Coast FIRE number, the following inputs are essential:
| Input Factor | Description |
|---|---|
| Current Savings | The amount already saved and invested. |
| Annual Expenses | Your estimated yearly living costs. |
| Target Retirement Age | The age at which you want to fully retire. |
| Expected Rate of Return | The average annual return on your investments. |
| Inflation Rate | The expected yearly inflation rate. |
| Withdrawal Rate | The percentage of savings you plan to withdraw yearly. |
Coast FIRE Formula
A simplified formula to estimate your Coast FIRE number is:
For example, if your FIRE goal is $1,000,000, you plan to retire in 20 years, and your expected return is 7% annually, the calculation would be:
This means you need approximately $258,422 invested today for it to grow to $1,000,000 by retirement without additional contributions.
Coast FIRE Calculator Example
Let's assume:
- Current Age: 30 years
- Target Retirement Age: 60 years
- Current Savings: $50,000
- Annual Expenses: $40,000
- Expected Return: 7%
- Inflation Rate: 2%
- Withdrawal Rate: 4%
Coast FIRE Calculation Breakdown
| Parameter | Value |
| FIRE Goal | $1,000,000 |
| Years Until Retirement | 30 |
| Required Coast FIRE Savings Today | $131,367 |
In this example, the individual needs about $131,367 invested today to reach their FIRE goal by 60 without additional contributions.
Benefits of Coast FIRE
- Reduced Financial Stress: Once you reach your Coast FIRE number, you no longer need to aggressively save.
- Career Flexibility: You can switch to a lower-stress or passion-driven job.
- Improved Work-Life Balance: No need to overwork or worry about aggressive savings.
- Compounded Growth: Investments continue growing without extra effort.
Is Coast FIRE Right for You?
Coast FIRE is ideal for those who prefer financial flexibility over extreme frugality. If you want to ensure long-term security while maintaining a balanced lifestyle, using a Coast FIRE calculator can help you strategize effectively.