Coast FIRE: The Middle Path to Financial Freedom

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title: "Coast FIRE: The Middle Path to Financial Freedom" excerpt: "How to achieve financial flexibility without waiting for full FIRE." date: "2024-11-10" category: "Lifestyle" author: "Jonathan" readTime: "6 min read"

Not ready to fully retire, but tired of the grind? Coast FIRE might be your perfect middle ground.

What is Coast FIRE?

Coast FIRE (Financial Independence Retire Early) is when you've saved enough that your current investments will grow to your full FIRE number by traditional retirement age—without any additional contributions.

Think of it as financial cruise control. You've done the heavy lifting early, and now you can coast.

The Coast FIRE Formula

Coast FIRE Number = FIRE Number ÷ (1 + return rate)^years

Real Example

Meet Alex, age 30:

• FIRE number: $1,000,000
• Retirement age: 65
• Expected return: 7% annually
• Years to retirement: 35

Coast FIRE number: $1,000,000 ÷ (1.07)^35 = $93,663

If Alex has $93,663 invested at age 30, they can stop saving entirely and still hit $1M by age 65!

Why Coast FIRE is Powerful

1. Earlier Freedom

Instead of grinding for 15-20 years to full FIRE, you might reach Coast FIRE in just 5-10 years.

2. Career Flexibility

Once you hit Coast FIRE, you can:

• Take a lower-paying passion job
• Work part-time
• Start a risky business
• Take a sabbatical
• Move to a lower cost-of-living area

3. Reduced Pressure

No more obsessing over every dollar saved. As long as you cover living expenses, your retirement is secure.

4. Time Arbitrage

By leveraging compound interest and time, you trade intense early-career saving for decades of flexibility.

The Coast FIRE Timeline

Phase 1: Hustle Mode (Years 0-7)

• Goal: Hit Coast FIRE number
• Savings rate: 50-70%
• Lifestyle: Lean, focused, intentional
• Career: Maximize income

Example: Save $60k/year starting with $10k

• Year 7: ~$560k invested
• Coast FIRE achieved for $1M retirement at 65

Phase 2: Coast Mode (Years 7-30+)

• Goal: Cover living expenses
• Savings rate: 0-20%
• Lifestyle: Balanced, flexible
• Career: Follow your passion

Your $560k grows to $1M+ by retirement without additional contributions.

Phase 3: Traditional Retirement (Age 65+)

• Portfolio has grown to full FIRE number
• Withdraw 4% annually
• Full financial independence

Coast FIRE Strategies

Strategy 1: Geographic Arbitrage

After hitting Coast FIRE, move to a lower cost area.

Example: Software engineer in San Francisco

• Save aggressively for 7 years: $500k
• Move to Portugal, Thailand, or Austin
• Work remotely part-time: $40k/year
• Coast to full FIRE while enjoying life now

Strategy 2: Career Pivot

Use Coast FIRE to fund a career change.

Example: Accountant hits Coast FIRE at $400k

• Quits corporate job
• Becomes a yoga instructor ($35k/year)
• Covers expenses, stops saving
• Portfolio grows to full FIRE

Strategy 3: Part-Time Income

Work 20-30 hours/week instead of 50+.

Benefits:

• More time for family, hobbies, health
• Less stress and burnout
• Covers living expenses easily
• Retirement is on autopilot

Strategy 4: Sabbatical Years

Alternate between working and not working.

Pattern:

• Work 2 years, save $50k
• Take 1 year off, live on $50k
• Repeat while Coast FIRE portfolio grows

Coast FIRE vs Other FIRE Types

Coast FIRE vs Lean FIRE

• Lean FIRE: Live on $30-40k/year, retire fully now
• Coast FIRE: Work part-time, full retirement later
• Tradeoff: Coast requires less savings, but you still work

Coast FIRE vs Fat FIRE

• Fat FIRE: $2M+ portfolio, luxury retirement
• Coast FIRE: Smaller portfolio, normal retirement later
• Tradeoff: Fat FIRE takes longer, Coast gives flexibility sooner

Coast FIRE vs Barista FIRE

• Barista FIRE: Part-time work covers expenses + provides benefits
• Coast FIRE: Part-time work covers expenses, but retirement is secured
• Similarity: Both involve continued part-time income

Is Coast FIRE Right for You?

You're a Good Fit If:

• ✅ You're young (20s-30s) with time for compound growth
• ✅ You want career flexibility soon
• ✅ You don't mind working part-time long-term
• ✅ You value experiences now over earlier full retirement

You're NOT a Good Fit If:

• ❌ You want to fully retire ASAP
• ❌ You're closer to traditional retirement age
• ❌ You hate your career and need to quit immediately
• ❌ You want luxury retirement spending

How to Reach Coast FIRE

Step 1: Calculate Your Numbers

Use our Coast FIRE Calculator to determine:

• Your Coast FIRE number
• How much you need to save
• When you'll reach it

Step 2: Maximize Early Savings

• Increase income (promotions, side hustles, job hopping)
• Cut expenses aggressively
• Invest in low-cost index funds
• Max out tax-advantaged accounts

Step 3: Track Progress

Monitor your Coast FIRE percentage:

Coast FIRE % = Current Savings ÷ Coast FIRE Number × 100

Step 4: Plan Your Coast Life

Before hitting Coast FIRE, plan:

• What type of work will you do?
• Where will you live?
• What income do you need?
• What will you do with your time?

Step 5: Make the Transition

Once you hit Coast FIRE:

• Give notice if changing jobs
• Negotiate part-time or remote work
• Build your new lifestyle gradually
• Keep emergency fund intact

The Risks

Market Downturns

A major crash early in your Coast phase can derail plans.

Mitigation:

• Build a cash cushion (1-2 years expenses)
• Have flexible income sources
• Consider a 3.5% Coast FIRE number instead of 4%

Lifestyle Creep

Part-time work might not cover rising expenses.

Mitigation:

• Track spending carefully
• Distinguish needs from wants
• Keep living costs stable

Career Changes

That "fun" job might become unfulfilling too.

Mitigation:

• Keep skills sharp
• Build multiple income streams
• Save extra in good years

Real Coast FIRE Stories

Emma, 32, Former Consultant

• Saved $400k by age 30
• Quit consulting, became a freelance writer
• Earns $45k/year, works 25 hours/week
• Portfolio will hit $1.5M by 65
• "I have my life back and retirement is still secured"

David, 35, Software Engineer

• Hit $500k at 33
• Took 3-year sabbatical to travel
• Returned to part-time contract work
• Works 6 months/year, travels 6 months
• "Coast FIRE gave me time freedom in my 30s, not my 60s"

The Bottom Line

Coast FIRE is the Goldilocks of financial independence:

• Not too aggressive (Lean FIRE)
• Not too slow (Traditional retirement)
• Just right for early freedom with security

It's about optimizing for life satisfaction across all decades, not just maximizing wealth or minimizing work years.

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My Take: Coast FIRE Feels Less Intimidating

I'll be honest—I haven't calculated my Coast FIRE number yet. I'm still in the early stages of my FIRE journey, and honestly, I'm probably far from hitting Coast FIRE right now. But the concept appeals to me way more than traditional FIRE.

Here's why: the pressure.

Full FIRE requires a massive nest egg—likely over $1 million for most people. That's a daunting target, especially when you're starting at 40 like me. Coast FIRE, though? That milestone comes way earlier. Even if I hit Coast FIRE and knew my retirement was secured if I just kept working at a reasonable pace, that would be a huge mental win.

The other thing that makes Coast FIRE attractive: I don't think I'd actually stop saving even if I hit it.

I run a roofing business, and I'm building other income streams (like this site and a CRM for contractors). I'm not the type to coast—I'd probably keep growing my net worth just because that's how I'm wired. But knowing that I could slow down if I wanted to? That's freedom.

What appeals to me most is the reduced pressure. I don't need to save 50-70% of my income every month and live like a monk. I can hit Coast FIRE, keep working on projects I care about, and know that even if things slow down, I'm not derailing my retirement.

I need to run the numbers (probably using our Coast FIRE calculator), but I suspect Coast FIRE will be a key milestone for me. Not the finish line—just a checkpoint that says "you're good, now build from here."

If you're starting late like me, Coast FIRE might be the most motivating target to aim for first.

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Start calculating: What's your Coast FIRE number? Try the calculator and discover your path to financial flexibility.