The Real Math Behind Coast FIRE—And Why It Might Be Your Shortcut to Freedom
Ever wonder if you're saving too much for retirement? Or whether you could stop saving altogether and still retire comfortably?
That's not a fantasy. It's a strategy. And it's called Coast FIRE—a powerful financial concept that lets your past savings do the heavy lifting while you coast toward retirement without stress or spreadsheets.
But here’s the key: Coast FIRE is only as strong as your numbers. And the numbers come from the Coast FIRE formula.
In this guide, we’ll break it all down—no jargon, no fluff. Just simple math, real assumptions, and a free tool that makes calculating your Coast FIRE number painless.
What Is the Coast FIRE Formula?
The Coast FIRE formula helps you determine how much money you need today so you can stop saving for retirement and still retire comfortably at a target age—thanks to compound interest alone.
The Basic Idea
If your current investments can grow (without adding another dime) to your desired retirement amount by age 60 or 65, you’ve “coasted.” You only need to earn enough to cover your expenses until then—no more aggressive saving required.
The Formula (In Plain English)
Let’s break it down with a little math:
Where:
- r is your expected annual return rate (e.g., 0.07 for 7%)
- n is the number of years until retirement
- Target Retirement Amount is how much you want by retirement age
Example:
Let’s say you’re 30, want to retire at 60, and aim for $1 million at retirement.
Using a 7% average annual return:
That means if you have about $131,000 invested by age 30, you can stop contributing and still end up with $1M at 60.
Use our free Coast FIRE Calculator to run your own numbers.
What Assumptions Go Into the Formula?
No formula is perfect without clear assumptions. Here’s what’s baked into most Coast FIRE calculations:
1. Consistent Annual Return (6–8%)
- Most FIRE followers assume 6–8% annual returns, based on historical S&P 500 averages.
- Real-world returns vary, so it's smart to run multiple scenarios.
2. No Further Contributions
- This is the key concept: you're done saving for retirement.
- From here on out, your job is to maintain your cost of living—not to invest more.
3. Time Horizon Until Retirement
- The younger you are, the longer compound interest can work for you.
- Even just a 5-year delay in starting can require thousands more up front.
4. Inflation and Taxes
- Most calculators use inflation-adjusted returns (e.g., 7% nominal – 2% inflation = 5% real return).
- Adjustments for taxes depend on account type (e.g., Roth vs. traditional).
Why Coast FIRE Works (Even If Traditional Saving Doesn’t)
Most people think the path to retirement is grinding for 35+ years while saving 20% or more of their income.
That works—but it’s not the only way.
Here’s why Coast FIRE is smarter (for many):
- ✅ Front-load your freedom: Save aggressively in your 20s–30s, then relax.
- ✅ Avoid burnout: No pressure to climb the ladder just to earn more.
- ✅ Time is your asset: The earlier you hit your Coast FIRE number, the less effort it takes.
- ✅ Career freedom: Once you've coasted, you can take lower-paying, passion-driven jobs without fear.
Common Mistakes People Make with the Coast FIRE Formula
Even the smartest FIRE fans can miscalculate. Here’s what to watch out for:
❌ Overestimating Returns
Assuming 10% every year is risky. Plan for 6–7% and you'll have a margin of safety.
❌ Ignoring Inflation
If you're not using inflation-adjusted numbers, your Coast FIRE number might fall short by tens of thousands.
❌ Forgetting Life Happens
Job loss, medical emergencies, or early retirement desires can derail plans. Always leave wiggle room.
❌ Not Updating Your Plan
Your Coast FIRE number today isn’t forever. Revisit it every year or after major life changes.
Tools to Help You Calculate Your Coast FIRE Number (Without Spreadsheets)
You don’t need to build formulas in Excel or learn a new FIRE calculator app.
At coast-fire-calculator.com, we built a free, simple Coast FIRE Calculator that does the math for you in seconds.
Just enter:
- Your age
- Desired retirement age
- Current investments
- Target retirement goal
- Assumed return rate
The tool will instantly show:
- ✅ Your Coast FIRE number
- ✅ How far you are from it
- ✅ A visual graph of how your money grows over time
Actionable Takeaways
Here’s how to apply the Coast FIRE formula to your life—starting today:
- Calculate your target retirement number (e.g., 750k—whatever fits your desired lifestyle).
- Plug your numbers into the Coast FIRE formula or use our [free calculator].
- Start aggressively saving early, especially in your 20s and 30s.
- Track your investment growth yearly—adjust if needed.
- Once you hit your number, stop stressing about saving—you’ve earned the right to coast.
Ready to Coast? Try the Calculator Now
The Coast FIRE formula isn’t just theory—it’s a freedom plan backed by math.
And now, with coast-fire-calculator.com, it’s easier than ever to run your numbers, find your freedom point, and stop over-saving.
No spreadsheets. No stress. Just clarity.
Try the free Coast FIRE Calculator now and take the first step toward working less—and living more.