Coast FIRE Calculator
Determine if your current retirement savings have reached the "tipping point" where compound interest will carry you to your goal without further contributions.
Understanding Coast FIRE and Financial Independence
Coast FIRE (Financial Independence, Retire Early) is a significant milestone in personal finance. It is the point where you have accumulated enough invested assets that, even if you completely stop contributing to your retirement savings today, your existing nest egg will grow through compound interest to meet your retirement needs by your target age.
Reaching Coast FIRE doesn't mean you stop working immediately. Instead, it means you only need to earn enough income to cover your current annual living expenses. You no longer need the "hustle" of saving a large percentage of your income for the future, giving you the freedom to potentially switch to a lower-paying but more enjoyable job, work part-time, or take career breaks.
How This Calculator Works
This tool uses standard financial planning principles to determine your status based on five key inputs:
- Current and Retirement Age: Determines the time horizon (number of years) your money has to compound.
- Current Invested Savings: The starting amount of wealth you have already accumulated.
- Annual Retirement Spending: Your estimated yearly expenses in retirement. This calculator uses "today's dollars," meaning you should estimate based on what things cost right now.
- Expected Real Annual Return: The estimated average yearly growth of your investments after adjusting for inflation. A common conservative estimate for a diversified stock/bond portfolio is 6% to 7%.
The "Rule of 25" and the Nest Egg
To calculate how much money you need to retire, this calculator uses the inverse of the popular "4% Rule." It assumes that if you withdraw 4% of your portfolio in the first year of retirement and adjust that dollar amount for inflation in subsequent years, your money should last for at least 30 years. Therefore, to support a specific annual spending amount, you need a total nest egg equal to 25 times that amount (e.g., $50,000 spending x 25 = $1.25 Million Nest Egg).
Disclaimer: This calculator is for educational and illustrative purposes only. It relies on assumptions about future market returns and inflation which cannot be guaranteed. It should not be considered professional financial advice. Before making major financial decisions, consult with a qualified financial advisor to review your specific situation.