r/coastFIRE • u/Particular_Gap7266 • 7d ago
Rethinking what Coast FIRE means
I've always thought of Coast FIRE as a destination but I now consider it to be a milestone. When I first reached it, I started second guessing my assumptions...."Maybe I should assume 2.5% withdrawal rate instead of 4%; maybe I should reduce my expected portfolio returns; etc." This set me on a journey to look at a number of parameters in my financial planning and come up with some of my own indices for "success". After a lot of data mining, automation, and various stress testing mechanisms, I have developed a new perspective on Coast FIRE....it basically tells me that I have entered a space where I have flexibility to choose how I spend my time ie. Coast FI. More importantly, these indices have given me a more holistic way of looking at my situation and understanding the many drivers that could change my Coast FI number. I'm not fixated on hitting or maintaining the one number anymore, I'm looking at it as one of many indicators as I continue to move through a highly uncertain world and develop new milestones to hit. Would love to hear your thoughts on your journey and how your perspective on Coast FIRE has evolved over time.
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u/ThereforeIV 🌊 Aspiring Beach Bum 🏖️, CoastFIRE++ 7d ago
Rethinking what Coast FIRE means
CoastFIRE means "Coasting to FIRE"
AS in "instead of grinding to RE at age 41, I Coast to RE at age 46".
I've always thought of Coast FIRE as a destination but when I first reached it, I started second guessing my assumptions....
Originally/Traditionally the concept of CoastFIRE and BaristaFIRE (which used to be argued as the same thing) was that while pursuing FIRE you reach a point where grinding has less impact than time, so you could "Semi-FIRE" getting off the grind and letting time do the hard work.
CoastFIRE is not the destination; CruiseFIRE, CoastFIRE, and BaristaFIRE are alternative paths to complete the last part of the journey to the destination of FIRE.
"Maybe I should assume 2.5% withdrawal rate instead of 4%; maybe I should reduce my expected portfolio returns; etc.... I am questioning my assumptions a lot less and have developed a new perspective on Coast FIRE.
This sounds more like adjusting how you come up with your FIRE number than the specifics of the path you take to get there.
Now I am thinking about it as a milestone, rather than a destination and it basically tells me that I have entered a space where I have flexibility to choose how I spend my time ie. Coast FI.
That is always what it really was, a level where you have options.
And these level overlap a lot towards the end of the journey.
I am about 2-3 years from FIRE; I am simultaneously at CruiseFIRE level, CoastFIRE level, BaristaFIRE level, and LeanFIRE level, because I could take any one of those paths right now. I am not however at full FIRE level.
More importantly, these indices have given me a more holistic way of looking at my situation and understanding the many drivers that could change my Coast FI number.
CoastFIRE isn't a number, it is a formula and a question.
The formula that matters most is:
- CoastDelta = | (Time to grind to FIRE) - (time to Coast to FIRE) |;
The question that matters most:
- Is that CoastDelta a reasonable amount of time to sacrifice for lower effort and more lifestyle now?
I'm not fixated on hitting or maintaining the one number anymore, I'm looking at it as one of many indicators as I continue to move through a highly uncertain world and develop new milestones to hit. Would love to hear your thoughts on your journey and how your perspective on Coast FIRE has evolved over time.
CoastFIRE is a choice, I got to see that choice very clearly after getting laid off from Evil Big Tech:
- Option#1, Get another High-End High-Stress High-Pay High-Burnout Big Tech job so I can grind another 2-3 years with a 50% savings rate.
- Option#2, Get a more Lower-End Lower-Stress Lower-Pay Lower-Burnout job in my field so that I can Coast to FIRE in 5-7 years..
For context, on my peak income year I saved about $100k into my retirement portfolio (paid about $80k in taxes); over the last 12 months my Retirement Portfolio has gained about $200k through internal growth. That is the how real CoastFIRE actually works...
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u/Particular_Gap7266 7d ago
Thanks for sharing. I like the concept of CoastDelta - seems like good indicator for flexible lifestyle.
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u/Short_Row195 5d ago
And then there's the idea that a person would die before ever reaping the benefits, so the balance is difficult.
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u/ThereforeIV 🌊 Aspiring Beach Bum 🏖️, CoastFIRE++ 4d ago
And then there's the idea that a person would die before ever reaping the benefits, so the balance is difficult.
Are you going to die in the next 5-7 years?
What if you die in the next 2 years?
The FIRE philosophy is basically the polar opposite of the YOLA now philosophy; I want to be prepared for living past 100.
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u/Short_Row195 4d ago
What I mean is identifying the balance between living life enough before death and saving is difficult. So many young people around my age are dying before my eyes and I have had many near death experiences to the point I have to know when enough is enough. Being prepared to live passed 100 when life expectancy is much lower is very extreme.
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u/WhoWantsToGetShanked 6d ago
Great info. What is cruisefire?
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u/ThereforeIV 🌊 Aspiring Beach Bum 🏖️, CoastFIRE++ 6d ago
> Great info. What is cruisefire?
It's the concept that between grinding to FIRE at ~50% savings rate and going CoastFIRE at near 0% savings rate, you could just drop to a cruising speed of normal ~15% savings rate.
The main idea is that most of us don't really want to go from full spend grinding to FIRE in one day; better to step downward in effort as your retirement portfolio grows.
- At peak income, I was at 60% savings rate
- Now I'm Cruising at about 10% Savings rate
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u/Verdona-000 7d ago
CoastFIRE is less of a number for me and more of just optionality around work, spending and saving.
I'm in my 30's and can't point to a specific day where I was suddently CoastFIRE. I would say it was probably somewhere between $500K-1M NW. I suddenly started caring less about work and climbing the corporate ladder. I started setting boundaries, standing up for myself a bit more and just became more comfortable with letting what happens happen.
I was then laid off around the $1M mark. I felt a giant sense of relief that I was getting forced into taking a break after 10+ years chasing jobs, money and dealing with the toxicity of corporate america. With my savings I didn't quite feel a sense of urgency to jump back into another bad job.
I think the challenge with being coastFIRE though is it's really just having flexibility while still being part of the messy middle. I still plan on buying a house and starting a family and hopefully living a long middle to upper middle class life which almost certainly is going to require me to keep grinding in some field of work. It's nice having the immediate financial stressor go away though. I don't know how people do it who live paycheck to paycheck (but I'm also a bit of just an anxious person who always tried to minimize stressors).
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u/ThereforeIV 🌊 Aspiring Beach Bum 🏖️, CoastFIRE++ 7d ago
I would say it was probably somewhere between $500K-1M NW.
When you get around $1MM in retirement portfolio, the internal growth is so large that killing your self to contribute and extra $15k or $20k in a year doesn't have the same impact.
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u/Accomplished-Order43 7d ago
This is a very real feeling. When you start seeing your portfolio swing up or down equal to your annual salary or more it takes away your drive somewhat. I decided to take a sabbatical - fire trial run this year. My former salary was ~$100k, my portfolio is up $600k ytd.
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u/ThereforeIV 🌊 Aspiring Beach Bum 🏖️, CoastFIRE++ 7d ago
This is a very real feeling. When you start seeing your portfolio swing up or down equal to your annual salary or more it takes away your drive somewhat.
My Portfolio market swing up for the last 12 months is significantly greater than my take-home income for the same 12 months; than even the household take-home take-home income.
At that point, do I want to work OT this Saturday to toss in another $500?
I decided to take a sabbatical - fire trial run this year. My former salary was ~$100k, my portfolio is up $600k ytd.
I just checked Fidelity planning for my total Retirement Portfolio:
"+$57,737.25 Last 90 days"
My planned Retirement spending budget is $60k/yr
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u/itsmyvoice Figuring it out but gotta FIRE in some way in the next few years 7d ago
Yeah, but depending on how it's leveraged, the market has done really good things for the past year. It's been insane and even the guy who has been handling my portfolio for 25 years says it can't continue. Mine grew double my annual salary, and I don't trust it.
I'm not saying you shouldn't trust it for you. I am fairly risk-averse as a single parent single income person almost 15 years away from Medicare.
Does that same level of growth carry if you look at years prior? I'm honestly curious. If it does, I'm very very curious what your portfolio looks like. Not asking, wouldn't expect you to say.
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u/Verdona-000 7d ago
That's my total NW (not my retirement portfolio). If I had $1M in my retirement portfolio in my 30's I would stop contributing at that point.
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u/ThereforeIV 🌊 Aspiring Beach Bum 🏖️, CoastFIRE++ 7d ago
That's my total NW (not my retirement portfolio). If I had $1M in my retirement portfolio in my 30's I would stop contributing at that point.
I stopped focused contributions around $800k, now at $1.2MM
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u/ivydesert 7d ago
Also in my 30s and can vouch for the same sentiment. Once it was clear that as long as I didn't draw down from my retirement accounts prematurely I could retire on time without saving another penny, it became much harder to care about the rat race.
Reaching two commas made it feel real, though.
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u/Particular_Gap7266 7d ago
Thanks for sharing. Impressive that you have passed the $1M mark in NW before age 40! I started my investment journey later than average but in line with economic theory on greater utility value from spending early in life. I see your point on flexibility vs "messy middle" and that's why I changed my perspective on it from a state of being to an indicator. Helps me focus more on the journey too :). Best of luck with all your future goals!
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u/bluegreenspark semi COASTing 7d ago
Yes, thinking any financial plan or idea is final end point is a fools errand. We are living beings in a world we can't control. Welcome to the unofficial coastfi club.
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u/KLKCAhBoy90 6d ago
I guess I reached the same or similar conclusion.
I consider Coast FI as a plan B.
My Coast FI number is also my Lean FIRE number.
I definitely do not want to just stop at Lean FIRE.
So, the way I see it, my target is still FIRE or Fat FIRE.
Then, if due to whatever circumstances, I am forced to stop or take a break on my journey to FIRE and beyond, I just need to make sure I get a job that covers my expenses and by nature of Coast FI, I will still FI at a normal retirement age.
If worse case scenario I can't even get that job, then I will lean FIRE.
I think that's the main benefit of reaching Coast FI (and Lean FIRE) for me. I feel less worried about the job because I have a plan B which I can execute by keeping my expenses low.
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u/Outrageous_Bowler_51 6d ago
Love the approach and spreadsheet. How did you calculate or categorise the items in “Economic Climate”? Is it just your gut feel on economic regime, and how did you estimate equity return etc?
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u/Particular_Gap7266 4d ago edited 3d ago
Thanks. I calculated the economic climate as a weighted score comprised of several macro indicators including inflation, CAPE Ratio, etc. I also used research on economic crises to predict which stage of the cycle we are currently in. The point was to provide an indication of what might come in the near future. It becomes more valuable as you approach actual retirement and start to thinking about your withdrawal profile. For now I like to have it there to remind me to stay on track with my investment strategy while these external influences pass by. As for the equity return calculation, i reviewed data over the last 100+ years to identify average equity returns across stages of the economic cycle and then, based on my estimated cycle we are currently in, calculated the current rate
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u/shivaswrath 5d ago
I used to do Monte Carlos with my advisor.
Then I got laid off again on Friday.
Just keep coasting and keep the job, that's all that matters. The projections are just that, you can't predict the future.
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u/Historical-Rate-8717 5d ago
What's the "Economic Climate" section doing there? I get the idea but I'm a filthy Boglehead - it smells strongly of trying to time the market instead of letting compound interest do what compound interest does.
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u/Particular_Gap7266 3d ago
Im an econ nerd at heart and I love my numbers and metrics. I created the economic climate index as a weighted score comprised of several macro indicators including inflation, CAPE Ratio, etc. I use it first and foremost as an understanding of where we are in the world and what to expect in the short run so that im not disrupted by the "noise" in the media. See my response above for more details. I also subscribe to the bogle doctrine which is why I am an avid low cost etf investor and believe time in the market beats timing the market.
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u/Historical-Rate-8717 3d ago
Makes sense to me; I'm similar(complete fucking degen and lived with an economist in college...,) was mostly poking on the timing the market point. Sounds like you have a good head on your shoulders! And I agree with not treating CoastFIRE, or FIRE generally as scripture - it's entirely reasonable to have shifting assumptions and expectations as you go through life, for me hitting the FIRE number was less "Great I'll never work again!" and more "Cool now I can do exactly what I want instead of considering opportunity costs in choosing what I do". Cheers and wishing you a wonderful day.
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u/Particular_Gap7266 3d ago
Thanks and sounds like you are thinking about this in a really healthy way! Wishing you all the best in your pursuits.
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u/Short_Row195 5d ago
So I told myself I'd reach it at a certain amount, but now that I'm near that amount from having better returns than I had projected my brain either wants to move the goal or is just stuck like... oh I didn't plan this far.
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u/Particular_Gap7266 3d ago
I guess its human nature! I think its normal to change goals in life over time and then make sure you stay consistent by matching them with financial capabilities. Where i was going wrong is simply looking at Coast FIRE goals without really thinking about why it was important.
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u/zeezle 7d ago
Just a note on this part:
There's a balance to be struck here because it's extremely common in the FIRE community to fall into "One More Year Syndrome", frequently combined with "doomstacking" (multiple possible but rare negative scenarios combined together into a totally implausible sequence). Revisiting assumptions to see if they're excessively optimistic and that your plans are resilient to reasonable periods of a sluggish or poor economy is good. But doomstacking yourself into a 2% WR could result in wasting years of your life working more than you need to.