A low-information but high-celebration post, since I’m finally confident we’ve hit our “Coast FIRE” number.
What is Coast FIRE?
If you’re not familiar with Coast FIRE/CoastFI, what it basically means is “you have enough money invested that you could stop contributing to retirement accounts tomorrow and still be able to retire at age 65.” Like most things in the FIRE world, there are dozens of different interpretations. For some, it means giving up the high-pressure job and doing something you’re more passionate about but may not be as lucrative, or even just something to pay the bills and let you de-stress (this is tip-toeing onto Barista FIRE, but I digress).
Are you FIRE’d when you hit Coast FIRE?
For us (and it seems most others), all Coast FIRE really means is “I’m on track.” If your goal is early retirement, it’s only logical that you can’t retire early until you’re able to retire “on time.” So while there’s some measure of satisfaction in hitting our number, it doesn’t change a whole lot for us day-to-day. We’re not going to quit our jobs and pursue passion projects, we’re just going to stay focused on paying down debt and start giving serious attention to taxable brokerage accounts so we can retire before age 59½.
How do you know you’ve hit Coast FIRE?
Well, to be honest…there’s no way to be certain. Maybe we’ll see hyperinflation and cost of living will go up to $1M/yr. We don’t really know what our expenses will be, and 27 years is a long time out to try to plan specifics. In our case it’s more of a “spectrum of comfort level” and I think at this point we’re safe. We have no intention of scaling back our retirement contributions, it’s just a peace of mind milestone that, if something crazy happened and we lost the good jobs we have now, we’d still eventually be able to retire even if we never contributed another dollar.
There are a ton of blogs, spreadsheets, and formulas out there, but I’m lazy and I like tidy calculators. My favorite for Coast FIRE is the one at WalletBurst, so feel free to go plug in some numbers and see how you’re doing.
The Big Reveal: Our Numbers
So again…we have absolutely no idea what our annual spending is going to look like. These numbers are somewhere between “assumption” and “wild-ass guess.” But since we intend to continue contributing to our retirement accounts just as we have been (actually…we’re gonna get real serious about our savings rate), I’m not super worried about it. This is like a “worst case scenario” or a fallback.
Current Age: 38
Retirement Age: 65
Current Retirement Account Balance*: $760,000
Monthly Contribution: $0 (remember, this is “if I don’t contribute anything else, I can retire at 65)
Growth: 6.25% (historical avg is 10%, no way to know what the next 27 years will bring)
Inflation: 3%
Safe Withdrawal Rate (SWR): 4%
*I don’t like using net worth for this, since that generally includes a house and it’s difficult to cash out of real estate.
Does any of this actually matter?
No! It’s basically a thought exercise at this point. We’re not quitting, changing jobs, altering our retirement contributions, or anything tangible really. We don’t suddenly have a bunch of money or a bigger/better house. It’s more of an “in name only” milestone on the path to actual financial independence/early retirement. Still, after staring at $750,000 worth of debt all the time, it’s a nice mental break to think about something more positive 🙂