The FIRE number is a big, sexy number.

But what about coastFI, the invested assets benchmark that lets you lighten up on saving and go enjoy a cocktail by the pool while your money compounds? What's that number? 🍹

Coast FIRE (technically coastFI, for my fellow nomenclature snobs) is the point at which your current invested assets would compound the rest of the way to your FIRE number by your chosen retirement age, even if you never contributed another buck to your accounts.

This lets you take the money you were shoveling into investments or index funds and put it toward other things instead.

The coastFI (coast FIRE) calculator math

To measure your coastFI number, you’ll first estimate what will be enough money for you to become work-optional (your FIRE number), then work backward using typical compound interest formulas.

First, there's the FIRE number. Write down your target retirement age, expected annual return on investments, and how much you plan to spend annually in retirement.

Then, multiply your annual spending by 25 )if using the 4% rule) to get your FIRE number:

FIRE number = E x 25

Where E is your expected annual expenses.

From here, we can reverse-engineer our coastFI number. To determine when the coast could start, we'd to know:

• Our end wealth target (FIRE number) (F)
• Our expected rate of return on our investments (r)
• How many years those investments would passively compound at that expected rate of return. (t)

That formula would look something like this:

coastFI number = F / (1 + r) ^ t

Where F is your FIRE number, r is the annual return (expressed as a decimal, so 6% would be 0.06), and t is the number of years you have until you want to stop working.

The big idea behind CoastFI is that you’re hustling harder in your early years to create more flexibility in midlife. Once you’re reached the CoastFI benchmark, you know that, based on historical returns, your money would grow the rest of the way to your FIRE number, which is traditionally built on the 4% rule and therefore has inflation factored in.

Remember that you’ll need to recalibrate your FIRE number periodically to maintain accuracy, which means you’ll also need to recalibrate your CoastFI number from time to time.

How much do I save to reach my coastFI goal?

It depends on several factors. These include your current age, desired retirement age, expected annual retirement expenses, and projected investment growth rate.

Online calculators crunch these numbers to give you a personalized coastFI target to work towards. They can also show how small changes, like retiring a few years later or living on less, impact your coastFI number.

Ultimately, coastFI calculators illustrate the power of compound growth over time. By frontloading your retirement savings in your 20s and 30s, you give your money decades to snowball before you actually need it. Jumpstarting your investing while time is on your side is key for coasting to an early retirement.

The origins of coastFI

The FIRE movement traces back to the 1992 book Your Money or Your Life by Vicki Robin and Joe Dominguez. The concepts behind coastFI started appearing on FIRE forums and blogs in the 2000s under names like Barista FIRE and RV FIRE. The actual term “coast FIRE” seems to come from a 2016 ChooseFI podcast episode with entrepreneur Sam Dogen.

Over the last several years, coastFI has become much more visible. It's particularly appealing to young adults who have the time and energy to stack cash now, but don’t want to do that for decades. Since young and midlife adults have a lot of compounding time on their side, their coastFI number is much lower.

CoastFI gives you nuance

CoastFI offers a more balanced, flexible approach to financial freedom. It also gets you hyped about the true power of compounding, and we love a lil' extra motivation mojo around here.

For ambitious young professionals, coastFI creates the option to downshift into a lower-paying but more fulfilling career after reaching their coastFI number. Those who like their career can keep working, but also save less aggressively, and still have peace of mind that they’re on track.

If you're looking for a strategy that doesn't require decades of grind, calculating your coastFI number is a great place to start. ⬥