You can stop saving for retirement when your invested balance, growing at a conservative return, will reach your full FIRE number by your target retirement age without another dollar added. That balance is your Coast FIRE number. From then on your income only has to cover what you spend today, so you can take a lower-paid job, go part-time, or keep your job and spend more freely.
Before you stop, test the number with a lower return than you expect, keep an emergency fund, and decide whether you’ll still collect any employer match. Then plan the second transition, from coasting to fully retired, a few years before it arrives.
How do you know you’ve hit Coast FIRE? #
The formula divides your FIRE number by the growth your money has time to do:
Coast FIRE number = FIRE number ÷ (1 + real return) ^ years until retirement
Take a 40-year-old with a $1.5 million FIRE number who wants to retire at 65, so 25 years of growth. The answer swings a lot with the return you assume:
| Real return assumed | Coast FIRE number at 40 |
|---|---|
| 6% | about $349,500 |
| 5% | about $443,000 |
| 4% | about $562,700 |
The step-by-step version, including how to pick the return and how to handle inflation, is in how to calculate your Coast FIRE number.
Retire Goals has a Coast FIRE calculator that does this in a few inputs: it finds the amount that grows to your FIRE number by retirement age with zero further contributions. Try it at two or three return rates. If you’re only “there” at the most optimistic one, you’re not there yet.
Should you stop saving completely? #
Hitting the number doesn’t mean you have to stop. Three common approaches:
- Stop entirely. Your income covers spending and nothing else. Maximum freedom, no margin for error.
- Keep collecting the match. Contribute just enough to get any employer 401(k) match. It’s free money and keeps a small stream going in.
- Coast with a buffer. Wait until you’re at 110% to 120% of your Coast number, or use the 4% real return row above. You give up a year or two of coasting in exchange for a cushion against a bad decade.
Most people who’ve thought hard about it choose the second or third option. The math behind Coast FIRE assumes average returns over a long period, and no one gets the average.
What changes once you start coasting? #
- Your income target drops. You need to earn only what you spend, not what you spend plus savings. For someone who was saving 40% of take-home pay, that’s a big pay cut you can afford.
- Career options open up. Part-time work, a lower-stress role, a sabbatical-length gap, or a business that pays modestly.
- Health insurance still has to be solved. If you leave a job with benefits, price marketplace coverage or look for employers that cover part-timers.
- The portfolio is off-limits. Coasting only works if the money stays invested. Keep 3 to 6 months of spending in cash so a car repair or job gap doesn’t force a withdrawal.
What can go wrong while you coast? #
- A flat decade. If returns are poor for 10 years, your balance falls behind the curve and you may need to save again for a while.
- Your FIRE number creeps up. Kids, a bigger house, parents who need support, or plain lifestyle creep can raise the target your Coast number was based on.
- Using nominal returns by mistake. If you assumed 7% growth but meant before inflation, your Coast number was too small. Use real (after-inflation) returns or restate your FIRE number in future dollars.
- Having to withdraw early. A layoff with no emergency fund can mean selling investments, which undoes years of coasting.
Recheck the math once a year. If you’ve fallen behind, a year or two of saving again usually closes the gap.
How to move from Coast FIRE to full retirement #
Coasting ends when your portfolio reaches your full FIRE number and you stop working. Start preparing three to five years before that date.
Check your assumptions against reality #
Did the portfolio grow at the rate you modeled? Has your planned retirement spending changed? Is health insurance before 65 priced in? Update your FIRE number first, then see how close you actually are.
Reduce sequence-of-returns risk #
A crash while you’re coasting is annoying. A crash in your first years of retirement is dangerous, because you’d be selling shares at low prices to live on. Two common tools:
- A cash buffer of one to two years of spending in savings, CDs or Treasury bills. Our guide to how much cash to keep in early retirement covers the sizing.
- A bond tent: shift gradually toward bonds in the years around retirement, then drift back toward stocks once the risky early years pass.
Pick a withdrawal rate that fits a long retirement #
The 4% rule was built on 30-year retirements. If yours could last 40 or 50 years, a lower rate gives more margin:
| Annual spending | 4% rate | 3.5% rate | 3.25% rate |
|---|---|---|---|
| $40,000 | $1,000,000 | $1,142,857 | $1,230,769 |
| $60,000 | $1,500,000 | $1,714,286 | $1,846,154 |
| $80,000 | $2,000,000 | $2,285,714 | $2,461,538 |
Only count invested assets. Home equity and cars don’t pay for groceries.
Map your withdrawal order #
If you retire before 59½, you need a way to reach your money without the 10% early-withdrawal tax:
- Taxable brokerage accounts first, often at low capital gains rates.
- Roth IRA contributions, which you can withdraw tax- and penalty-free at any age.
- A Roth conversion ladder, where each converted amount becomes penalty-free five years after its conversion.
- A 72(t) plan of fixed yearly payments from an IRA; see how 72(t) withdrawals work.
- The Rule of 55, if you leave a job with a 401(k) in or after the year you turn 55.
Before you quit, test the drawdown. The Will My Money Last calculator in Retire Goals takes your portfolio, first-year spending and expected return, raises the withdrawal each year for inflation, and shows how many years the money covers, plus the spending that would make it last 30 years.
The psychological side of the last step #
Many people reach their full number and keep working “one more year,” then another. Set a numeric exit rule in advance, such as your portfolio hitting 28 times your spending, and commit to it. If a permanent exit feels too big, take a six-month unpaid leave as a trial retirement first.
Coasting also keeps structure in your life. Before you give up the part-time job, sketch what a normal week will look like: exercise, projects, people, maybe volunteering.
Frequently asked questions #
Do I have to stop working when my portfolio reaches my FIRE number? #
No. Reaching your FIRE number makes work optional, not forbidden. Many coasters keep a job they enjoy for the structure, the people or the health insurance.
What happens if the market crashes while I’m coasting? #
Nothing, as long as you don’t sell. You’re not withdrawing, so a crash mostly delays your finish date. If a downturn leaves you well behind your curve, a year or two of saving again catches you up.
How does inflation affect Coast FIRE? #
Inflation raises your FIRE number in dollar terms every year. The fix is to run all your math in today’s dollars with a real return, which is the return minus inflation, so the two stay consistent.
Should I keep contributing enough to get my 401(k) match? #
Usually yes. A match is an immediate return on your money, and contributing enough to collect it is a small cost for most people. It also adds a buffer if markets underdeliver.
Is Coast FIRE the same as Barista FIRE? #
No. With Coast FIRE your job pays all your current spending and the portfolio isn’t touched. With Barista FIRE the portfolio already pays part of your spending through withdrawals, and a part-time job covers the rest.