What is the Coast FIRE formula?

Two steps. First, annual retirement spending divided by your withdrawal rate gives the full FIRE number. Second, that figure divided by (1 + real return) raised to the number of years until retirement gives the coast number. The second step is ordinary discounting: it asks what sum today grows into the target by then.

Should I use a nominal or a real return?

Real, always. Your FIRE number is expressed in today’s money, so the rate that discounts it has to be expressed in today’s money too. Using a nominal return against a real target mixes units, and over a 30-year horizon it can understate the coast number by more than half.

How do I convert a nominal return into a real return?

Divide rather than subtract: (1 + nominal) / (1 + inflation) − 1. With a 7% nominal return and 3.4% inflation that gives 3.48%, not 3.6%. The difference looks trivial and is worth roughly $14,000 on a $1.2m target over 30 years.

Does hitting my Coast FIRE number mean I can stop working?

No. It means you can stop saving for retirement. You still need income to cover your current expenses — the portfolio is not paying for anything yet. The point at which the portfolio starts covering part of your living costs is Barista FIRE, and the point at which it covers all of them is full FIRE.

Why does my coast number go up every year I wait?

Because there is less time left to compound. The number grows at roughly your real return each year, and in absolute terms the increases accelerate as the horizon shortens. Delaying from 32 to 33 might add $15,000 to the target; delaying from 54 to 55 adds twice that.

What happens to my coast number if my spending goes up?

It moves much more than the spending did. At a 4% withdrawal rate every extra dollar of annual spending adds twenty-five dollars to the FIRE number, and the coast number is that figure discounted. An extra $400 a month adds $120,000 to a FIRE number and roughly $43,000 to a coast number thirty years out.

How to Calculate Your Coast FIRE Number — Formula and Worked Example

Coast FIRE is the point at which the money you already have, left completely alone, compounds into your full retirement number by the time you want to stop working. Reach it and you can stop contributing. You still have to earn enough to pay this year’s bills; you just no longer have to put anything aside for the future.

That makes it the earliest milestone in the FIRE sequence and, for most people, the one that changes daily life soonest. It is also the one most often calculated wrongly, because the number is extremely sensitive to a single input that is easy to fill in badly.

The formula

fireNumber = annualExpenses / withdrawalRate coastFireNumber = fireNumber / (1 + realReturn)^(retirementAge − currentAge)

Four inputs, and they are not equally forgiving. The first two set the size of the target. The last two decide how much of that target you need to have already.

Step 1: annual spending in retirement, in today’s money

Not your current income, and not your current spending either. What you expect a year of retired life to cost, priced at today’s prices.

Two adjustments are worth making deliberately rather than by feel. Subtract the things that stop when work stops: commuting, the portion of your housing cost that exists because of where the job is, and retirement contributions themselves, which are not consumption. Then add the things that start: in the US, health cover you are currently getting through an employer is the single largest line most people forget, and it applies for every year between retiring and Medicare at 65.

Keep the figure in today’s money. Do not inflate it forward. Inflation is handled in step 4, once, and handling it twice is a common way to end up with a number nobody could ever reach.

Step 2: turn spending into a FIRE number

Divide annual spending by the withdrawal rate you intend to use. At 4%, that is the familiar multiply-by-25. At 3.5% it is multiply-by-28.6, and at 3% it is multiply-by-33.3.

The 4% figure is a convention drawn from studies of historical US market sequences, not a law. It was derived for a 30-year retirement, and someone retiring at 50 is planning for considerably longer than that. If your horizon is long, the honest move is to run the number at 3.5% as well and see how much the answer moves. $48,000 a year is a $1.2m target at 4% and a $1.37m target at 3.5% — and that difference propagates into everything downstream.

For the rest of this guide the example is $48,000 a year at 4%, so a FIRE number of $1,200,000.

Step 3: the horizon

Retirement age minus current age. The only thing to be careful about here is that this is the age at which the portfolio starts paying for your life, which is not necessarily the age you stop working, and not necessarily the age you claim Social Security.

For anyone born in 1960 or later, full retirement age is 67, and claiming at 62 reduces the benefit by 30% for life. If your plan is to retire at 62 and claim immediately, the portfolio is covering a smaller share of your spending than you might assume and the benefit is permanently smaller. If your plan is to retire at 62 and claim at 70, the portfolio has to carry eight full years alone. Those are different plans with the same retirement age, and they need different numbers.

Our example uses 32 now, 62 then: a 30-year horizon.

Step 4: the real return, which decides everything

This is where the calculation goes wrong, and it goes wrong the same way almost every time. The FIRE number from step 2 is expressed in today’s money. The rate that discounts it must therefore also be expressed in today’s money — a real return, net of inflation. Discount a today’s-money target with a nominal rate and you have mixed units, and the result is not slightly wrong. It is wrong by a factor.

Converting nominal to real is a division, not a subtraction:

realReturn = (1 + nominal) / (1 + inflation) − 1

With a 7% nominal return and inflation of 3.4% — the 12-month CPI change published for August 2026 — that gives 3.48%, where subtracting would have given 3.6%. On a $1.2m target thirty years out, that rounding alone is worth about $14,000.

The larger question is whether 7% nominal is the right starting point at all. It is worth knowing what the market will actually guarantee: on 25 August 2026 the 30-year Treasury real yield was 2.92%, with the 10-year at 2.32%. That is the risk-free real return available for locking money away for three decades. Any assumption above it is an equity risk premium you are forecasting, not a rate you are being offered. Assuming 5% real is assuming roughly two points of premium will show up over your particular thirty years. That is not unreasonable. It is also not guaranteed, and it is the whole of your plan.

The worked example, done both ways

Same person, same target, same horizon. The only difference is which rate goes into the denominator.

FIRE number $48,000 / 0.04 = $1,200,000 Horizon 62 − 32 = 30 years Discounted at 7% NOMINAL $1,200,000 / 1.07^30 = $157,641 Discounted at 3.48% REAL $1,200,000 / 1.0348^30 = $429,817

The correct number is 2.7 times the incorrect one. And because the error is in the denominator’s exponent, it grows with the horizon — it is worst for exactly the young savers most likely to be running the calculation.

Translate that into time, which is what actually matters. Take someone at 32 with $60,000 invested, saving $18,000 a year, earning 3.48% real:

They pass the wrong number, $157,641, in 5 years, at 37.
They pass the right number, $429,817, in 15 years, at 47.

So a person who ran the calculation with a nominal rate declares themselves coast FIRE at 37 and stops contributing. They are a decade early. The $167,700 they have at that point, left alone at 3.48% real for 25 years, arrives at about $394,000 of today’s money against a $1.2m target — and they find out at 62. There is no recovering from that, because the missing ingredient is time.

This is the entire reason to be pedantic about one input. The Coast FIRE Calculator derives the real rate from your return and inflation assumptions with the Fisher relation rather than asking you for it, which removes the opportunity to make this mistake.

What the coast number looks like by age

Holding the $1.2m target and 3.48% real fixed, and varying only when you reach it:

Age 32 30 years left $429,817 Age 35 27 years left $476,293 Age 40 22 years left $565,184 Age 45 17 years left $670,666 Age 50 12 years left $795,834 Age 55 7 years left $944,362 Age 60 2 years left $1,120,611

Two things fall out of that table, and the second one is the useful one.

The first is the obvious point that waiting costs money. The second is that it costs steadily more per year of waiting. Delaying from 32 to 33 adds $14,965 to the target. Delaying from 54 to 55 adds $31,773 — more than twice as much, for one year of delay, because the compounding that would have covered it has been removed from the calculation rather than the saving.

The practical reading: front-loading matters far more than consistency. Two years of heavy saving at 30 does more work than two years of heavy saving at 50, and the coast-number table is the clearest way to see the size of the gap.

Three things that move the number after you have calculated it

Your spending, amplified twenty-five times

The withdrawal rate is a multiplier in both directions. An extra $400 a month of expected retirement spending is $4,800 a year, which at 4% is $120,000 on the FIRE number and roughly $43,000 on a coast number thirty years out. Lifestyle decisions made in your thirties are retirement decisions, and the leverage runs against you.

The employer match, which no market assumption competes with

Stopping contributions does not only stop your own money. Suppose a $95,000 salary with a match of 50% on the first 6%: contributing $5,700 attracts $2,850, for $8,550 a year going in. Two more years of that is $17,100 of your own money and $5,700 of the employer’s — and at 3.48% real over the remaining 28 years it arrives as roughly $45,000 of retirement money for $11,400 out of pocket.

The match is an immediate 50% return in the year it is paid. Nothing in your return assumption comes close, which is why “coast partially” — dropping to the match threshold rather than to zero — is usually the better version of the decision. There is a use-it-or-lose-it element too: the 2026 elective deferral limit is $24,500, with an $8,000 catch-up from age 50 and $11,250 between 60 and 63, and the 2026 IRA limit is $7,500 plus a $1,100 catch-up. Each year of tax-advantaged room you do not use is gone permanently.

Social Security, where the naive expectation is usually wrong

The common worry is that coasting into lower-paid work will damage the eventual benefit. For most people who reach Coast FIRE young, it does not, and the reason is in the formula: the SSA computes your average indexed monthly earnings from up to 35 years of earnings, taking the highest.

Someone who starts coasting at 35 has perhaps 13 working years on record. The years their new, lower salary will be compared against are not their best years — they are the empty and near-empty years from school, training and early career. A modest salary replacing a zero raises the average. The benefit generally goes up.

The calculation inverts later. Someone coasting at 58 with 35 strong years already banked is replacing nothing, so additional low-paid years change the average by nothing much either — and someone coasting at 50 with high earnings in the record is the one case where the worry has some substance. The direction of the effect depends on where you are in the 35, which is not what most people assume.

Running your own

The arithmetic above is four operations and you can do it on paper. What is worth doing beyond the single number:

Run it twice more. Once at a real return a full point below your assumption, once at a withdrawal rate of 3.5% instead of 4%. At 2.48% real the example coast number is $575,177 rather than $429,817 — a third more. If the plan only works at your central assumption, it is a forecast rather than a plan.
Check the units. If your number looks surprisingly achievable, the first thing to check is whether a nominal rate found its way into a today’s-money calculation.
Recompute every few years. Coasting is not a decision made once. If real returns disappoint, resuming contributions at 40 is cheap and discovering the gap at 58 is not.

The Coast FIRE Calculator does all three: it shows the coast number at every age between now and retirement, shows what today’s balance actually compounds into if left alone, and takes the return and inflation assumptions separately so the real rate is derived rather than guessed.

This guide explains a calculation and cites published figures from the sources below. It is not financial or tax advice, it cannot account for your circumstances, and every figure in the example is an assumption rather than a forecast. The decision to stop contributing to a retirement account is difficult to reverse, because what it spends is time — take it to a qualified adviser before you act on it.

Sources

Every rule described above comes from one of these. Where a figure or a threshold matters to a decision, check it here rather than relying on this page — the rules change, and this page may not have caught up.

US Treasury — Daily Treasury Par Real Yield Curve Rates — the real (inflation-protected) yield the market will actually lock in for 5 to 30 years, which is the floor any real-return assumption sits above
US Bureau of Labor Statistics — Consumer Price Index news release — the published 12-month CPI change used here as the inflation input
IRS — 401(k) and profit-sharing plan contribution limits — the 2026 elective deferral limit, the age 50 catch-up and the age 60-63 catch-up, all of which are forfeited year by year if you stop contributing
IRS — IRA contribution limits — the 2026 IRA limit and catch-up amount
Social Security Administration — Benefit computation (AIME and PIA) — the rule that up to 35 years of indexed earnings are used, which decides whether coasting into lower-paid work hurts your benefit
Social Security Administration — Starting your retirement benefits early — full retirement age of 67 for those born 1960 or later, and the 30% reduction for claiming at 62