Coast FIRE Calculator: Student Loans
Planning for Coast FIRE while paying off student loans comes with unique considerations that generic calculators often miss. Your situation affects everything from your FI number (we've pre-filled a typical estimate of $40k/year in expenses) to your realistic savings capacity ($400/month is common for this scenario). Our calculator lets you adjust these defaults to match your specific reality.
Why This Matters
Student loans don't prevent Coast FIRE - they just require balancing two goals. If your loans are above 6-7% interest, prioritizing payoff may make sense. If they're lower (especially federal loans around 3-5%), investing may outperform extra payments over time. Consider income-driven repayment plans to free up cash flow for investing. If you work in public service, PSLF (Public Service Loan Forgiveness) could eliminate your loans after 10 years of qualifying payments. Many Coast FIRE achievers reached their number while still carrying student debt - the math can work either way.
Key Considerations for Your Situation
Balance paying off loans with retirement saving - don't ignore either completely. Missing early compounding years to aggressively pay loans can cost more than the interest saved. A balanced approach typically works best.
If your student loans are below 5-6% interest, mathematically investing often outperforms extra loan payments over time. At 7% investment returns and 4% loan interest, you're 3% ahead by investing. Of course, guaranteed "return" from loan payoff vs uncertain investment returns is a personal risk preference.
Consider income-driven repayment plans to reduce monthly payments and free up cash flow for investing. The extended timeline means more interest paid, but if the freed capital is invested, you may come out ahead.
If you work in public service (government, non-profits), PSLF (Public Service Loan Forgiveness) could eliminate your federal loans after 10 years of qualifying payments. This changes the math entirely - if you qualify, make minimum payments and invest the difference.
Student Loan Strategies for Coast FIRE
The math depends on interest rates: above 6-7%, prioritize payoff. Below 4-5%, investing likely wins long-term. In between? Split the difference for psychological balance.
Income-driven repayment (IDR) plans cap payments at 10-15% of discretionary income. This frees cash flow for investing while making minimum payments over 20-25 years.
Public Service Loan Forgiveness (PSLF): if you work for government or nonprofits, 10 years of IDR payments qualifies remaining balance for forgiveness. Worth $50k+ for many borrowers.
Refinancing trade-offs: private refinancing can lower rates but loses federal protections (IDR, forbearance, PSLF). Keep federal loans federal unless you're certain you'll never need those options.
Healthcare While Paying Student Loans
Income-driven repayment reduces your AGI slightly (interest deduction), potentially improving ACA subsidy eligibility at the margin.
Don't skip health insurance to pay loans faster. One medical emergency can create more debt than years of loan payments. Insurance is non-negotiable.
If pursuing PSLF, you're likely working for an employer with decent health benefits. Take advantage of these while making qualifying payments.
FSA for healthcare reduces taxable income: at $3,050/year, you save $670-975 in taxes annually. Use this to cover predictable medical expenses while freeing up loan payment capacity.
Healthcare costs vary significantly by state, age, and family size. Factor in premium subsidies, deductibles, and out-of-pocket maximums when planning your Coast FIRE budget.
The Psychology of Coast FIRE with Student Loans
Debt shame is real but counterproductive: you invested in education hoping for better outcomes. That investment may still pay off. Don't let shame paralyze you.
The "pay off loans vs invest" debate can become obsessive: run the numbers once, make a decision, and stop second-guessing. Either path works if you commit.
Loan forgiveness feels like cheating: it isn't. PSLF is a legal program you're entitled to use. Income-driven repayment is a valid strategy. Use the tools available.
Freedom has a different timeline: Coast FIRE with loans might mean coasting to loan payoff + retirement, not just retirement. Redefine what freedom means for your situation.
How Coast FIRE Works
Compound Growth
Your investments grow exponentially over time. Einstein called compound interest the 8th wonder of the world.
The Coast Strategy
Once you hit your Coast number, you never need to save for retirement again. Work for passion, not survival.
Freedom Date
Discover when you can switch to part-time work or pursue your dreams without financial anxiety.
Frequently Asked Questions
Can I achieve Coast FIRE while paying off student loans?
Yes - Coast FIRE is achievable in any situation with the right strategy. Student Loans households have unique challenges, but many people in your exact situation have reached financial independence. The path may look different (different timeline, different strategies, different FI number), but the destination is the same. Our calculator helps you plan around the specific factors that affect your situation.
What's a realistic savings rate while paying off student loans?
We've pre-filled $400/month based on typical student loans situations, but this varies widely. Generally, aim for 15-25% of your income if possible, adjusting for your specific circumstances. Some months you may save more, some less - consistency over time matters more than hitting an exact percentage every month. Use our calculator to see how different savings rates affect your timeline.
How much should I budget for annual expenses while paying off student loans?
We've estimated $40k/year for student loans households, which is typical for this situation. This number directly determines your FI number (Annual Expenses ÷ 0.04 = FI Number). The lower your spending, the lower your Coast FIRE target. Track your actual spending for a few months to get a realistic number - many people are surprised (in either direction) by their true expenses.
What's the best Coast FIRE strategy while paying off student loans?
The fundamentals remain the same regardless of situation: 1) Maximize the gap between income and expenses, 2) Invest consistently in low-cost index funds, 3) Take full advantage of available tax-advantaged accounts, and 4) Stay the course through market volatility. What differs while paying off student loans are the specific tactics - which accounts to prioritize, how much emergency fund to keep, what risks you can take, and what timeline is realistic.
Your Next Steps
Calculate the interest rate break-even point between loan payoff and investing.
Research income-driven repayment plans and PSLF if you qualify.
Don't completely ignore retirement saving - even small contributions compound.
Model scenarios with different loan payoff timelines in our calculator.
Related Tools & Resources
Ready to Calculate Your Coast FIRE Number?
Use our free calculator above to see exactly when you could stop saving and let compound interest carry you to retirement.
Use Calculator NowSources
- [1]Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable(1998)
- [2]Determining Withdrawal Rates Using Historical Data(1994)
- [3]Historical Returns on Stocks, Bonds and Bills
- [4]Bureau of Labor Statistics Occupational Outlook
- [5]Safe Withdrawal Rate Series
- [6]Healthcare.gov Marketplace
- [7]TSP.gov - Thrift Savings Plan
- [8]IRS Publication 571