What is Coast FIRE? Stop Saving, Keep Working (2026 Guide)

What is Coast FIRE?

Coast FIRE (also called Coast FI) is a financial milestone where you have invested enough money that compound interest will grow it to your full retirement number - without contributing another dollar.

Think of it like pushing a snowball down a hill. Once it is big enough and rolling, gravity takes over. Your job is done. With Coast FIRE, once your investments hit a certain threshold, time and compound growth do the heavy lifting.

The key insight: you still work, but only to cover your current living expenses. No more stressing about maxing out your 401(k). No more feeling behind on retirement savings. That mental burden lifts completely.

How Coast FIRE Works

Coast FIRE relies on the power of compound interest over time. Here is the basic logic:

1. Calculate your FI number - How much you need to retire (typically 25x your annual expenses using the 4% rule)
2. Pick your target retirement age - When you want to fully retire (e.g., 60 or 65)
3. Work backwards - Using expected investment returns (typically 7%), calculate how much you need today for it to grow to your FI number
4. Hit that number - Once you reach it, you have achieved Coast FIRE

After reaching Coast FIRE, your options open up. You can:

• Switch to a lower-paying but more fulfilling job
• Go part-time
• Take a sabbatical without derailing retirement
• Start a business with less financial risk
• Spend more on experiences now instead of saving

Coast FIRE Example

Let us walk through a real example:

Now Sarah can take a pay cut to pursue work she loves, go part-time to spend time with family, or simply enjoy her income without the guilt of not saving enough.

How to Calculate Your Coast FIRE Number

The Coast FIRE formula is:

First, you need your FI number - the total you need to retire. The standard approach is the 4% rule: multiply your expected annual expenses in retirement by 25.

Then plug into the formula. Or just use our Coast FIRE calculator which does the math for you. For a deeper dive with more examples and a reference table, see our Coast FIRE formula guide.

Benefits of Coast FIRE

Why do people pursue Coast FIRE instead of traditional FIRE?

1. More achievable than full FIRE

Full FIRE might require $1.5M+ and 15-20 years of aggressive saving. Coast FIRE might require $200-400k and be achievable in your early 30s. The barrier is much lower.

2. Psychological freedom

Knowing retirement is handled removes a massive mental burden. You can make career decisions based on happiness, not just salary. This is hard to quantify but often the biggest benefit.

3. Flexibility in your prime years

Instead of grinding until 55-60, you gain flexibility in your 30s and 40s - when you have energy, health, and possibly young kids. That trade-off appeals to many.

4. Lower income still works

Traditional FIRE often requires high income. Coast FIRE is more accessible - front-load savings early, then coast. It works even if your income drops later.

Challenges and Risks

Coast FIRE is not without trade-offs:

Market risk

The calculation assumes ~7% long-term returns. If markets underperform for an extended period, you might not hit your target. Consider using a more conservative 5-6% estimate as a buffer.

Inflation uncertainty

We use inflation-adjusted returns, but real inflation might differ. Your future expenses might be higher than expected. Building in some margin helps.

You still need income

Coast FIRE is not retirement. You still need to earn enough to cover current expenses, healthcare, and lifestyle. It is freedom from saving, not freedom from work.

Temptation to touch investments

The money needs to stay invested for decades. Life events (job loss, medical bills, divorce) might tempt you to withdraw. That would reset your Coast FIRE status.

Is Coast FIRE Right for You?

Coast FIRE works best if:

• You are young (20s-30s) with time for compounding to work
• You can save aggressively for 5-10 years early on
• You value flexibility and mental freedom over early full retirement
• You enjoy some form of work and do not mind continuing
• You want to pursue lower-paying but more meaningful work

It might not be for you if:

• You are closer to traditional retirement age (less compounding time)
• You hate working and want to stop completely ASAP
• You prefer the certainty of full FIRE over partial freedom

Not sure if Coast FIRE is your best path? Take our FIRE Readiness Quiz to score yourself across 8 key dimensions and get personalized tool recommendations.

Frequently Asked Questions