Coast FIRE is the point at which you have invested enough that — even without making any further contributions — your existing investments will compound to your full FIRE number by your intended retirement age. At Coast FIRE, you can stop saving aggressively and simply “coast” — covering your living expenses from your income without needing to invest any additional funds.
How Coast FIRE Works
The mechanics rely on compound growth. If you invest enough early, time does the heavy lifting:
Example: You want $1,500,000 at age 55 (full FIRE). At 7% real return:
- If you have $750,000 at age 45, it doubles to ~$1,500,000 by age 55 — you have reached Coast FIRE at 45
- From 45 to 55, you don’t need to invest a single additional dollar — just cover your expenses from your income
This is a powerful milestone because it separates the “must save aggressively” phase from the “can breathe a bit” phase — while still moving toward full FIRE.
The Coast FIRE Formula
$$\text{Coast FIRE Number} = \frac{\text{FIRE Number}}{(1 + r)^n}$$
Where:
- FIRE Number = target retirement portfolio (e.g., 25× annual expenses)
- r = expected real annual return (e.g., 0.07 for 7%)
- n = years until target retirement age
Example: FIRE Number = $1,500,000; target full FIRE at age 55; currently aged 35; n = 20 years; r = 7%
$$\text{Coast FIRE} = \frac{$1,500,000}{(1.07)^{20}} = \frac{$1,500,000}{3.87} = \approx $387,600$$
At 35, with $387,600 invested, your Coast FIRE milestone is reached. You don’t need to invest any more — your $387,600 will grow to approximately $1.5 million by age 55.
Coast FIRE and Australian Super
Super is a natural vehicle for Coast FIRE because it compounds in a tax-advantaged environment (15% earnings tax in accumulation phase; 0% in pension phase):
- Employer SG contributions build super passively
- Even without extra voluntary contributions after reaching Coast FIRE, super continues growing
- Super cannot be accessed until 60 — but Coast FIRE super wealth matures well within that window for most
However, Coast FIRE using only super has a gap problem if you want to retire before 60. A personal investment portfolio is needed to bridge.
Coast FIRE Table (Australia)
Coast FIRE number required today to reach $1,500,000 at target retirement age, at 7% real return:
| Today’s age | Target age 55 | Target age 60 | Target age 65 |
|---|---|---|---|
| 30 | $201,000 | $143,000 | $102,000 |
| 35 | $282,000 | $201,000 | $143,000 |
| 40 | $395,000 | $282,000 | $201,000 |
| 45 | $554,000 | $395,000 | $282,000 |
Assumes 7% real return — actual returns will vary.
After Reaching Coast FIRE
Once you hit Coast FIRE:
- Stop aggressive saving — you no longer need to invest to reach your FIRE goal
- Cover living expenses from income — no need to invest surplus; just earn enough to live on
- Let compound growth do the work — your existing portfolio compounds to your FIRE number
- Optionally shift to Barista FIRE — reduce work hours and supplement income from investments
Many Coast FIRE achievers use this milestone as permission to step off the high-income treadmill — taking lower-paid but more enjoyable work, moving to a lower cost-of-living area, or reducing work hours.
What Happens to the Employer SG in Coast FIRE?
Even after reaching Coast FIRE, your employer must continue paying SG contributions if you remain employed. These contributions continue compounding in super — likely pushing your final retirement balance above your original FIRE number. This is a bonus, not a problem.
Related Articles
- Barista FIRE Australia
- FIRE Number Australia
- FIRE Savings Rate Australia
- FIRE and Super Australia
- FIRE hub
Frequently Asked Questions
What is the Coast FIRE number in Australia? Your Coast FIRE number is the investment portfolio size today at which — without any further contributions — compound growth will reach your FIRE number by your target retirement age. It depends on your FIRE number, the number of years until retirement, and your assumed real rate of return.
Does Coast FIRE work inside super in Australia? Yes — super is an excellent Coast FIRE vehicle. The tax-advantaged compounding (15% tax in accumulation) means your super grows efficiently over many years. Just ensure the target retirement age is above 60 (preservation age) — otherwise you also need a personal investment Coast FIRE portfolio.
Is Coast FIRE the same as financial independence? No. Coast FIRE is a milestone on the way to full financial independence. At Coast FIRE, you still need to work to cover your living expenses — but you don’t need to save or invest any additional money. Full financial independence (FIRE) means your portfolio income covers all living expenses without working.
This article provides general financial information only. Past investment returns are not a reliable indicator of future performance. For advice tailored to your situation, speak with a licensed financial adviser through the ASIC financial advisers register or MoneySmart.