Have you ever wondered how close you are to your retirement goals? If you’re like most people, you have probably developed some default saving and investing habits for retirement–and haven’t given it much thought beyond that. But you could be closer to your retirement goals than you think! You may have already hit your Coast FIRE number.
In that case, you have lots of options for your budget and other savings goals. Calculating your Coast FIRE number is easier than you might think–and the results might surprise you!
What Is Coast FIRE?
Coast FIRE is the idea that if you save and invest enough early on, you can coast into retirement. This is called front-loading, or filling up your retirement savings first. Then, once you reach a targeted amount, you can stop investing and simply let your money grow in the market. That frontloaded amount has decades to compound, which frees up plenty of time for you to spend your money on other things!
How Does Coast FIRE Compare To Traditional FIRE?
You might be wondering if Coast FIRE is the same as financial independence or FIRE. Someone who is Coast FIRE isn’t financially independent in the strictest sense. Though you do have significant control over your time, money, and lifestyle, you still have to work.
However, you are really only worried about covering your current expenses. Many people who reach Coast FIRE experiment with lifestyle design. That might mean downshifting to part-time work or taking the plunge into entrepreneurship. When your retirement costs are already covered, you will likely find that you need to earn less income, which gives you more control over your time. It might not be true financial independence, but it’s a real freedom to be Coast FIRE. In fact, some might argue that Coast FIRE is actually better!
How To Find Your Coast FIRE Number
One of the easiest ways to calculate your Coast FIRE number is to use our free Coast FIRE calculator!
To use the Coast FIRE calculator, you’ll need to know some things about your financial picture. Make sure you can identify the following numbers:
- Current age
- Target retirement age
- Average annual spending
- Current invested assets
Our free calculator then inputs the following information for you automatically based on long-term market performance and common financial rules of thumb:
- Investment growth rate
- Inflation rate
- Safe withdrawal rate
- Investment fees
However, if you would like to adjust these amounts, you can do so easily.
Once you’ve input all the data in our Coast FIRE calculator, you can see how close you are to Coast FIRE.
I Hit My Coast FIRE Number! Now What?
What happens when you use our Coast FIRE calculator and realize you’re officially Coast FIRE? A world of options opens up for you!
Decrease Your Retirement Contributions
The first thing that you might consider doing is scaling back your retirement contributions. Since you have enough in your investment accounts to cover your retirement once you reach retirement age, you don’t need to keep adding money to those accounts. That means you might cancel all your contributions. Or you might simply scale back how much you put in each month.
Maximize Family Experiences
Let’s say you’ve been consistently investing $1,000 a month. Now that you’re Coast FIRE, you can move that $1,000 (or a portion of it!) to other priorities. One of those priorities might be to maximize experiences with your family.
Maybe you have a travel bucket list that you’ve been neglecting. In that case, you can set up a target amount for a sinking fund and put a portion of the money you’d normally invest into that account each month.
There are, of course, other possibilities, too. Perhaps your children have expressed an interest in travel soccer or other pricey extracurricular activities. Maybe your basement is just waiting for a remodel to become the epicenter of family time fun. You can set up a sinking fund (or several!) to help you make the most of your time as a family.
Pay Off Low-Interest Debt
Do you have low-interest debt? You’ve got a pretty big shovel to tackle your debt once you are Coast FIRE! You can take some or all of the money you’ve been investing and work on becoming debt-free. Pay down your student loans or eliminate your mortgage. We promise debt freedom is the best feeling.
One of the best parts of paying off your low-interest debt is that you free up even more money. Once the debt is gone, you have the money you’ve been paying on your debt (and interest!) plus your retirement contributions to work with. You’ve essentially eliminated another line item in your budget. Think of how freeing that would be!
Give More
After hitting your Coast FIRE number, you can also give more! We know that giving is a deeply personal decision. We certainly won’t tell you how to donate your time or money. Instead, we suggest exploring different causes that align with your values. For us, we really value organizations that do work to benefit children.
Coast FIRE allows us to make charitable giving a family affair. If you’re not sure where to start, know that you can always make a one-time donation and then adjust accordingly. We’ve rounded up these quotes on charitable giving to inspire you to get started.
Work Less
This is no doubt the benefit you’ve heard the most about. FIRE leads to early retirement. That means you can stop working altogether. While Coast FIRE won’t lead to those same results, Coast FIRE does allow you to do some serious lifestyle design.
Many people who reach Coast FIRE use that moment to downshift into part-time work. That could free up more time to spend supporting your family. Imagine being able to walk your kids to the bus stop each day or tackle the “someday” list of maintenance tasks around the house. You can also pour more time into your hobbies, friendships, and volunteer work.
Of course, just because you reach Coast FIRE doesn’t mean that you have to work part-time. Instead, you could shift into a field you feel more passionate about. Or you could leap into entrepreneurship like I did!
Divert Investing To Taxable Brokerage For Early Retirement
In addition to making some immediate lifestyle and finance changes, you might also want to consider changing how you invest. Once you are Coast FIRE, you no longer need to invest for retirement assuming you intend to work until you reach a traditional retirement age. But what if you want to retire early?
In that case, you will want to keep investing. However, you will need to structure your portfolio differently. By diverting your retirement investments into a taxable brokerage, you can start to make your early retirement plans come to fruition.
Keep Working And Growing Income
Working 9-5 gets a bad reputation, but what if you actually enjoy your work? If your work is fulfilling and you’re not experiencing burnout, the best move for you might be to keep working. By continuing to work, you can grow your income. Since you’ve already adopted many habits around savings and investing that are likely second nature, you might simply keep going. Continue to work and grow your savings.
Create A Bridge Account
As your savings continues to grow, you can build a bridge to early retirement using a taxable brokerage. When you set up a taxable brokerage, you want to follow the same format as your retirement accounts. Focus on low fees (we enjoy Empower's free portfolio analyzer tool to support that process) and make sure that the asset makeup meets your investing goals. Many people look for broad-based index funds to invest in. Then, you can set up automatic contributions that match what you used to send to your retirement accounts. Since your budget will stay the same, you shouldn’t feel restricted. Instead, you can start to plan for early retirement.
Make A Plan For Early Retirement
A lot of times, we get so focused on what we are retiring from, we forget to ask ourselves what we are retiring to. Now is the perfect time for you to start to envision what your retirement will look like. How will you spend your time? What impact will that have on your finances? Once you have answers to these questions, you can start to adjust your financial plans accordingly.
I'm Not At My Coast FIRE Number Yet. What Do I Do?
Does it feel like Coast FIRE isn’t attainable? We promise it is! In fact, we took a deep dive into ways in which you can reach Coast FIRE by 30, 40, or 50!
Keep Investing With Tax-Advantaged Accounts
The first step to reaching Coast FIRE is to make sure that you are investing in tax-advantaged accounts. The accounts you use depend on factors like your employment status. As a result, the accounts you invest in might not match your friends or family. Instead of worrying about that, just make sure you maximize the options you have.
401k
A 401k is an account that is provided by many employers. You can save a portion of your paycheck and let that money grow in the stock market. Additionally, some employers will “match” your investments up to a certain percentage or dollar amount.
IRA
While your 401k status depends on who you work for, an IRA does not. Instead, you are responsible for setting up this retirement plan with a company like Vanguard or similar providers. You can choose a Roth IRA or traditional IRA based on your situation. No matter what you choose, make sure that you follow the annual contribution guidelines and minimize the fees you pay.
HSA
If you have a high-deductible health plan, you likely have the option of investing in an HSA. This triple-advantaged account gets a lot of praise from the FIRE community. If you haven’t already set one up, you might consider it!
Decrease Spending In Areas That Won't Impact Your Happiness
Are you still far off from your Coast FIRE number? You want to decrease your spending to save more.
Negotiate Bills
At least once a year, take inventory of your recurring bills. What subscriptions can you cut? Then, start to shop around for cell phone carriers (our family likes Tello for this!) and insurance providers to make sure you’re still getting the best rates. Bundling insurance for car and home can sometimes save a considerable amount of money, too.
If you do find a better rate for any of your bills, move the difference to your investing accounts.
Increase Deductibles
Do you have a healthy emergency fund? Then you may be able to increase your deductible on your homeowners or car insurance. That means that in the event of a claim, you will have to pay more money upfront. As a result, you want to make sure that you can cover this deductible with your emergency fund.
Shop at Lower Cost Grocery Stores
It’s true that grocery costs take a bigger bite out of budgets than ever. If you haven’t yet changed your shopping strategy, now is the time. Embrace lower cost grocery stores like Aldi and make sure that you’re meal planning using weekly savings ads. And whatever you do, don’t shop on an empty stomach! As you trim your grocery budget, send that extra money to savings.
Embrace Free or Cheap Fun
Sometimes we default to spending money. What areas of your life can you scale back your spending? Perhaps you switch to potlucks or game nights with friends. Maybe you spend time park hopping with your kids. While you certainly shouldn’t try to eliminate your entire entertainment budget, you want to make sure that you aren’t overlooking chances to have fun for free.
Increase Income
You can only cut so much spending from your life. But you can always find ways to earn more money. To help you hit your Coast FIRE number faster, consider finding ways to boost your income.
Pick Up a Side Hustle for Parents
There are so many different side hustle options for parents. Find one that matches your interests or expertise. Don’t worry if you can’t dedicate a lot of time to it. Even an extra $100 a month can be meaningful.
Sell Things Around the House
Do you feel like your house is bursting at the seams? There are probably plenty of items that you could sell on Facebook Marketplace, Poshmark, or other resale sites. While you won’t make a fortune, you will come up with extra cash to put towards retirement. Plus, your house will feel less cluttered!
Snag a Promotion at Work
While side hustles tend to get all the glory, one of the best ways to boost your income is through your primary job. What can you do to land a raise or score a promotion? Do you have the option of picking up extra duties or working overtime? If you can generate more income through your primary job, make sure you invest that extra money.
Final Thoughts On Calculating Your Coast FIRE Number
Calculating your Coast FIRE number is simple when you have the right tools to work with. After you gather some basic information about your current financial situation, you can use our free Coast FIRE calculator to see how close you are to Coast FIRE.
If you aren’t Coast FIRE, start by taking steps like investing more in tax-advantaged accounts and decreasing unnecessary expenses. Have you already hit your Coast FIRE number? Then, you can explore many lifestyle design options and even plan for early retirement.
What is your Coast FIRE number? How are you working toward Coast FIRE?
Please let us know in the comments below.
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