How it works
First, the FIRE number: what you need invested on the day you stop working.
FIRE number = yearly spending in retirement / withdrawal rateThen the Coast FIRE number: the FIRE number discounted back to today by the growth you expect over the years until your retirement age (n), at a real return r.
Coast FIRE number = FIRE number / (1 + r)^nIf you already have that much invested, growth alone is expected to reach the FIRE number by your retirement age, with nothing added. If not, the calculator adds your yearly contribution at the end of each year and finds the first age where your balance passes that year's Coast FIRE number. In the chart, contributions stop at that point and the balance grows on its own.
A worked example
You expect to spend 40,000 a year in retirement. At a 4% withdrawal rate the FIRE number is 40,000 / 0.04 = 1,000,000. You are 35 and plan to stop at 65, so n = 30. At a 5% real return, 1.05^30 is about 4.32, so the Coast FIRE number is 1,000,000 / 4.32, about 231,000. At 4% it is about 308,000, and at 6% about 174,000. The return you assume moves the answer a lot, so a cautious figure gives you a margin.
Things to keep in mind
- Use a real return, after inflation, because spending is in today's money. Account statements show nominal returns.
- The Coast FIRE number rises a little each year, because there is one year less for growth. New money and returns above your assumption close the gap.
- Count only investments meant for retirement. Leave out your home and your emergency fund.
- Pension access ages, state pensions and tax rules vary by country and are not modelled.
Read the full guide, Coast FIRE explained, or see when full independence could come with the FIRE calculator.