Coast FIRE: when your portfolio finishes the job for you

Most of the FIRE dialects are about stopping work. Coast FIRE is about something subtler and, for most people, far more reachable: the moment you can stop saving for retirement and still retire comfortably, because the money you have already put away will grow into your full number on its own. You keep working — but only to pay this month’s bills, not to feed the future. The future is already fed. This is the fourth post in our FIRE series, and it is the one I would point a stressed thirty-year-old at first, because it turns an impossible-sounding goal into a birthday you might already have passed.

The idea in one sentence

You have reached coast FIRE when your current invested pot, left completely alone with no further contributions, will compound up to your full FIRE number by the time you hit a traditional retirement age.

That’s it. Note the two halves. You are not financially independent yet — your investments don’t cover your spending today, so you still need a paycheque for groceries and rent. But you have won the retirement-saving game. Every pound of savings pressure that used to sit on your shoulders is gone. You can drop to a job you actually like, go part-time, take the lower-paid role with better hours, or simply stop watching the savings-rate dashboard — and your old age is still handled, because compounding is now doing the work your monthly transfers used to.

The maths, worked through

Coast FIRE runs on the least glamorous force in finance: a lump sum left alone for a long time. The engine is compound growth, and the formula is the one every calculator hides behind a slider.

Say your full FIRE number is £1,000,000 (that’s 25× a £40,000 annual spend, per the 4% rule). You are 30 and you want the option to retire at 60 — thirty years of runway. The question coast FIRE asks is: how much would I need invested today so that, adding nothing more, it grows to £1,000,000 in thirty years?

Assume a 5% real return — that is, growth after inflation, which is the honest way to do this since your £1,000,000 target is in today’s money. Over thirty years, money roughly quadruples at 5% real (1.05 to the power of 30 is about 4.3). So you need about £1,000,000 ÷ 4.3, or roughly £233,000, invested today. Reach £233,000 by thirty and, on those assumptions, you never have to save another penny for retirement. The compounding alone carries you from £233k to a million over the next three decades.

Two things fall straight out of that. First, coast FIRE is brutally sensitive to time — the same person coasting from age 25 needs far less, because they have five extra years of quadrupling; someone starting at 45 needs a great deal more, because compounding has been robbed of its runway. Second, it is why the personal-finance cliché “just start early” is not nagging — it is the entire mechanism. The early pounds are the ones that get the most compounding, and coast FIRE is just that truth with a target attached.

Why it’s the most humane milestone

Full FIRE can feel like a decade-long breath you’re not allowed to let out. Coast FIRE gives you somewhere to exhale much sooner. It reframes the journey from a single distant finish line into a nearer, kinder checkpoint — and crossing it changes your actual options now, not in twenty years.

Cross it and the calculus of work inverts. You no longer need the highest-paying job; you need one that merely covers your current spending, because the savings job is done. That is permission to leave the burnout career, to take the sabbatical, to try the risky thing, to work three days a week while the kids are small. The pressure that makes people feel trapped in FIRE — I must save 60% or I’ve failed — simply lifts. You’ve bought back optionality decades before you’ve bought back your whole time.

The traps, because there are always traps

Coast FIRE has a seductive flaw: it hands you a single number and invites you to treat it as done. It isn’t, and here is where people fool themselves.

The return assumption is doing enormous work. Our example quadrupled the money on a 5% real return. Assume 7% and the coast number looks tiny; assume 4% and it balloons. Small changes in a rate, compounded over thirty years, swing the target by huge margins. Coast FIRE is a projection, not a bank balance, and projections built on optimistic returns are how people “coast” straight into a shortfall.

Sequence risk doesn’t care that you’ve stopped saving. A brutal decade of returns early in your coasting phase can leave you well behind the smooth curve the calculator drew — and because you’ve stopped contributing, you have no fresh money buying in cheap to catch up. Coasting is not the same as being safe; it is a bet that the average holds, and averages are made of ugly stretches. This is a milder cousin of the sequence-of-returns risk that stalks full retirees.

You still have to cover today. Coast FIRE says nothing about your current income — only your retirement pot. If your “coasting” job doesn’t cover your actual spending, you’ll be forced to sell investments to eat, which quietly undoes the whole plan. Coasting assumes the lump sum is genuinely left alone.

Checking whether you’ve already coasted

The genuinely exciting possibility is that you crossed your coast line years ago and never noticed, because nobody ever did the sum. A diligent saver in their late twenties or thirties is often much closer to coast FIRE than to any other milestone — sometimes already past it.

But you can only know by testing it against your real portfolio, not a hypothetical one, and with assumptions you can defend rather than the rosiest number a slider allows. That means one honest figure for what you have invested across every account, and a return assumption you’d be comfortable stating out loud. Strata’s planning tools include a coast-FIRE check that does exactly this — it takes your actual pot, your target, your ages and a return you choose, and tells you whether compounding alone gets you there, no wishful rounding involved. It is the difference between hoping you can ease off and knowing it.

Next in the series we meet coast FIRE’s close relative — the one that adds a part-time paycheque and, crucially, health insurance into the mix: barista FIRE. Or, if you want to find out tonight whether you’ve already quietly won the retirement-saving game, you can build your portfolio and run your own coast number.