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Coast FIRE: A Relaxed Approach to Early Financial Independence

Author Stacy Garrels
coast fire

What is Coast FIRE?

We all know the FIRE movement, stands for “Financial Independence, Retire Early.” It’s a lifestyle shift toward saving and investing aggressively early in your career so you can retire far sooner than the traditional age. 

For physicians and other high-income earners, early retirement can prevent burnout and allow you to focus on other passions and academic interests.

But reaching financial independence early can be rough. It’s challenging to reach the balance between FIRE and YOLO (You Only Live Once), something that Leif and the rest of our team regularly grapple with.

For many, the sacrifices needed — to reach FIRE and retire by age 40 — are a non-starter. There are, however, other less restrictive FIRE methods to achieve early financial independence and enjoy the fruits of your labor before you’ve gone (mostly) gray.

Coast is one of the FIRE movement’s more ‘relaxed’ variations. Through it, you also achieve early financial independence — but it’s done at a slower rate than with the traditional FIRE method. 

To do a Coast Fire, you still have to save aggressively and leave below your means, but you don’t need to save quite as rigorously, and the trade-offs aren’t quite so austere. 

This method requires consistent employment until you reach a traditional retirement age. However, the work tends to be low-stress and much more enjoyable. Doing Coast, you would work in your high-salary job for 10-15 years, and then transition to a low-stress job and ‘coast’ to the finish line. 

Saving and investing enough in your early working years are critical. Your ‘coast’ job is meant to pay your regular living expenses as your earlier investments grow into a sizable nest egg. For some, their coast job may provide health insurance and other benefits. 

And for your ‘coast’ job, you don’t necessarily need to pivot away from medicine. Working part-time as a doctor is increasingly common, according to the American College of Physicians (ACP) — especially in internal medicine. 

Part-time physician work can be done in academic medical centers and clinical practices. 

In addition to being a lower-stress job, this arrangement lessens the workload of full-time practitioners and increases the clinic’s capacity for longer office hours and more in-patient visits.

What’s the Difference Between Coast FIRE and Other FIRE Strategies?

To better illustrate what Coast FIRE is, let’s take a look at the different FIRE movements. The list is continually expanding, and before you’ve finished reading this article, a new FIRE strategy could ignite.

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Different FIRE Movements Explained

  • Traditional FIRE: The original concept of FIRE, where individuals save and invest aggressively to retire far earlier than traditional retirement age, often in their 30s or 40s.
  • Barista FIRE: Combines part-time work with partial financial independence. Here, individuals “semi-retire” and cover expenses with a part-time job, letting investments grow.
  • Coast FIRE: Focuses on building enough savings early so investment growth alone will cover retirement at the standard age. Individuals can then “coast” in a less demanding job that covers current expenses, allowing them to reach retirement without adding further savings.
  • Flamingo FIRE: Similar to Coast FIRE but more accelerated, saving about 50% of the retirement goal early. This lets individuals work a lower-stress job while letting investments grow to a full retirement goal by an earlier age than Coast FIRE.
  • Fast FIRE: Involves highly aggressive saving and investing, often with lifestyle sacrifices, to achieve financial independence in a short time frame.
  • Slow FIRE: A gradual approach, where the path to financial independence is spread over a longer period, with a less intense focus on extreme saving.
  • Wife FIRE (or Spouse FIRE): When one partner continues working to provide benefits while the other focuses on early retirement, balancing family financial goals.
  • Chubby FIRE: A middle ground between Lean and Fat FIRE, with enough savings for a comfortable but not luxurious retirement.
  • Fat FIRE: Targets financial independence with a more generous nest egg, allowing for a higher standard of living in retirement.
  • Lean FIRE: A minimalist approach focused on reaching financial independence with a smaller savings target, requiring a more frugal lifestyle both before and after retiring.

Why Choose Coast FIRE?

Imagine this: you’re in your 30s or 40s, with a well-funded retirement portfolio that will grow to cover your future expenses. Instead of the pressure to continue saving and investing heavily, you get to make career decisions based on your needs and preferences.

Coast FIRE offers the chance to balance financial security with a flexible, lower-stress lifestyle.

Here are some reasons why Coast FIRE might resonate with you:

  • Less Pressure to Save Aggressively: You don’t have to scrimp every cent as long as you’re investing wisely and consistently.
  • Flexibility in Career Choices: Coast FIRE can allow you to work in other medical roles or vocations, even if they pay less because your future is secure.
  • Less Sacrifice, More Freedom Now: Unlike traditional FIRE, where the focus is on intense saving, Coast FIRE lets you enjoy your current doctor’s salary now (within reason) while planning for a financially stable future.

How To Coast FIRE

If you want to hit Coast FIRE, these are the basic steps.

  1. Save Money. Build a strong initial savings base so your investments can grow. Early on, aim to contribute as much as possible and invest in real estate and other growth assets.
  2. Avoid Lifestyle Creep. When you start coasting, it can be tempting to splurge. Stay disciplined by sticking to a budget. The goal is to live life with less stress, not more material needs.
  3. Pursue Your Purpose. Did you have a high school biology teacher who changed your life? Do you want to work for a non-profit? Find a job that aligns with your sense of passion. This can also mean consulting work.
  4. Cover Current Expenses. Look for work that pays enough to cover your basic living expenses as you wait for your investments to grow into your full FIRE number.
  5. Reevaluate Periodically: Markets change, and so do life circumstances. Check in on your Coast FIRE progress. Review your retirement number and investment returns. Consider additional contributions to your retirement savings or tweaking your annual spending. Make sure you are hitting every Coast FIRE milestone you’ve laid out.

How To Calculate Your Coast FIRE Number

Working with an expert financial planner is always recommended. But if you’re just getting started and want an idea of what number you’d need to reach Coast FIRE, it’s not hard to come up with a quick gauge.

As a general rule of thumb, the average person can save up to 25x their annual living expenses and then live off that amount of money for 30 years using the 4% rule.

  1. Estimate your income needs during retirement. If you plan to spend $100,000 a year in retirement, then you would aim for a nest egg of at least $2.5M.
  2. Figure out your current savings. How much have you saved thus far?
  3. Calculate future growth using a compound interest formula. Let your current savings grow to the target amount without adding more. 

Here’s a formula to guide you: 

Future Value = Current Savings × (1+0.07)Years until FIRE

Let’s break this down into a Coast FIRE scenario for a doctor with $300,000 saved at age 30 who plans to save aggressively for another 10 years and then coast starting at age 40. 

The goal is to let their investments grow to $2.5 million by an early yet traditional retirement age without further contributions after 40.

Here’s a scenario overview of how that might work:

  1. Goal: $2.5 million by age 55.
  2. Starting Savings: $300,000 at age 30.
  3. Saving Period: Aggressive savings until age 40 (10 years).
  4. Annual Return: Assume a 7% average annual return.

To reach $2.5 million by 55, the doctor would need $915,000 saved by age 40 because the investments have just 15 years to grow.

Many tools can help you figure out your Coast FIRE goal number, including our calculators for compound interest or achieving your $10 million dream.

Pros and Cons of Coast FIRE

Pros

  • Freedom to Work on Your Terms: Coast FIRE lets you avoid high-stress, high-paying jobs and focus on roles aligned with your passions.
  • Less Intensity: Traditional FIRE requires intense saving. Coast FIRE allows you to save at an aggressive yet sustainable rate, making it more practical for people with families or other financial priorities.
  • Flexibility in Financial Planning: Coast FIRE provides a financial cushion, so even if your income fluctuates, your retirement goals stay on track.
  • Live Life with Intentionality: With Coast or other FIRE strategies, you can live your life more intentionally. It affords you the ability to spend more time with your children, pursue a vanity degree, or travel abroad.
  • Continued Intellectual Challenge: You entered medicine, law, or another high-paying career with noble intentions of using your intellectual capabilities to help others. 

Achieving Coast FI (Financial Independence) may allow you to work part-time as a physician in a lower-stress setting.

Cons

  • Market Dependence: Coast FIRE relies heavily on the growth of your investments. If your invested assets do not perform well, this can impact your projected timeline.
  • Not Saving Enough: It’s possible to meet all of your savings goals and milestones for reaching Coast FIRE and still come up short — especially since your goal is to reach the bare minimum needed for a retirement nest egg. You might underestimate how much money you’ll need to be financially independent.
  • Marketability and Job Prospects: If you do have to return to your previous employment, it can be difficult if you’ve not worked in your industry for several years. This could be especially challenging if your medical license has lapsed or expired and often requires needing to retake state medical board exams.
  • Discipline Required: While you can be more flexible with your lifestyle now, it still requires discipline. You’ll need to curb annual expenses and not live a typical “doctor” lifestyle.
  • Longer Path to Total FIRE: Coast FIRE gets you partway, but if you’re looking to retire entirely in your 40s, traditional FIRE may be more suitable.

Real-Life Stories of Coast FIRE Success

Coast FIRE has become a practical way for many to achieve financial security without the intensity of traditional FIRE. Here are some inspiring stories of individuals who’ve reached Coast FIRE and how it’s changed their lives.

Nicole Victoria: Finding Security and Balance

Nicole Victoria grew up witnessing financial instability within her family. Determined to create her own wealth and economic security, Nicole started saving and investing aggressively in her early 20s.

By 25, she reached Coast FIRE. Nicole had saved $100,000. Thanks to the power of compound interest, she realized that her existing investments could grow to support her retirement by age 65 — even if she didn’t add another dime.

Coast FIRE allowed Nicole to transition out of the corporate grind and into a more balanced lifestyle. Today, she runs her own money-literacy business, enjoys a slower pace with her kids, and feels secure in her financial future.

Delyanne Barros: From Burned-Out Lawyer to Financial Coach

Delyanne Barros had followed all the traditional steps: she’d earned a prestigious degree, built a legal career, and was making six figures. 

Yet, saddled with $150,000 in student debt, Delyanne felt trapped. She’d contributed small amounts to her 401(k) over the years, and by her late 30s, she discovered it had grown to nearly $100,000.

Inspired, she ramped up her savings and paid off her debt, eventually hitting her Coast FIRE goal of $400,000. This newfound financial freedom allowed Delyanne to leave her legal job, start a coaching business, and move to Portugal, where she’s living life on her terms.

These stories show that Coast FIRE can be a more attainable path to financial security to FIRE — even for those who are not interested in the extreme frugality needed for a traditional FIRE.

Critics of the Coast FIRE Movement

The Coast Fire movement has its detractors, even among traditional FIRE enthusiasts. Motley Fool finance writer, Dana George, takes a critical stance.

George contends there are four main issues with doing a Coast FIRE:

  1. Your numbers could be way off.
  2. You could decide to start coasting too early.
  3. You could be underestimating the future cost of health care and health insurance.
  4. You could be sacrificing your current happiness for leaner living.

Sam Dogen at Financial Samurai goes a step further in his critique of Coast FIRE. He says, “Coast FIRE is really just a mental trick to make you feel better about your progress. [It’s] really not different from a working individual who is regularly saving and investing their paycheck to retire at age 60 or later.” 

What is Physician on Fire’s Take? 

Leif’s Take  

In conversation with Leif about Coast FIRE, he remarked that it sounds enticing, and under the right circumstances, it can be a lifestyle-friendly way to inch towards financial independence without adding much to your investments.

For it to work, two assumptions must prove true:

  • One, your investments need to do the heavy lifting, and if returns are stagnant for five or ten years, you’ll be spinning your wheels. 
  • Two, you need to be prepared to enjoy your work (or some kind of work) for a much longer period of time as compared to someone who continues working full-time and investing substantial sums to reach FI more quickly.

The idea behind Coast FIRE is that you stop contributing toward your investments by cutting back on how much you work and earn, but in reality, it usually doesn’t make much sense not to take advantage of tax-advantaged retirement savings space. 

Additionally, if you cut back on retirement contributions not by working and earning less, but by spending more, then you’ve just moved the goalposts and your FIRE number will be larger than it was before. That fact, combined with reduced retirement savings, could easily double or quadruple your time to FI.

So, if you desperately need a lifestyle change, like going from full-time to half-time work, Coast FIRE may be a viable option. However, most people will be better off continuing a steady march toward FI with more subtle changes in lifestyle, savings, and spending as needed.

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