A CoastFIRE Case Study: How to Reach Financial Independence Slowly

The Financial Independence, Retire Early (FIRE) movement often conjures images of extreme frugality and a relentless sprint to a finish line. It’s an inspiring, but sometimes intimidating, all-or-nothing approach. But what if there was a different way? A path that allowed you to take your foot off the gas, reduce your stress, and enjoy the journey to financial independence without having to wait until the very end?

Welcome to the world of CoastFIRE. This increasingly popular strategy offers a powerful middle ground, a way to reach financial independence slowly and with significantly less stress. It’s about working hard upfront to build a nest egg that can grow on its own, freeing you to "coast" the rest of the way to traditional retirement age in a lower-stress job or passion project.

This guide will not only explain the concept of CoastFIRE but will walk you through a detailed CoastFIRE case study to show you exactly how this life-changing strategy works in the real world.

What Exactly Is CoastFIRE?

CoastFIRE is the point at which you have enough money in your retirement accounts that, without contributing another penny, it will grow to support a full retirement at a traditional age (e.g., 65).

Think of it as reaching the top of a very big hill on a bicycle. You have to pedal furiously to get to the top (the "sprint" phase). But once you're there, you can stop pedaling and simply coast down the other side, letting momentum (compound interest) carry you to your destination.

Once you hit your CoastFIRE number, you no longer need to save for retirement. You only need to earn enough money to cover your current living expenses. This is a profound shift. It frees you from the pressure of a high-stress, high-income career and opens up a world of possibilities:

• Downshifting to a part-time job.
• Starting your own business without the pressure of it needing to fund your retirement.
• Pursuing a creative passion.
• Taking a lower-paying job that offers a better work-life balance.

How Do You Calculate Your CoastFIRE Number?

Before we dive into our case study, you need to understand how to find your own CoastFIRE number. It requires a bit more than the simple "Rule of 25" used for a full FIRE number, as it involves projecting future growth.

You'll need a compound interest calculator (many are available for free online, like the one from Investor.gov), and you'll need four key inputs:

1. Your Full FIRE Number: First, "calculate your FIRE number" for a traditional retirement. Let's say you want to live on $60,000 per year in retirement. Your full FIRE number would be $60,000 x 25 = $1,500,000.
2. Years Until Retirement: How many years are there between your current age and your desired traditional retirement age? If you are 30 and want to retire at 65, this is 35 years.
3. Expected Rate of Return: This is your estimated annual growth rate after inflation. A conservative and commonly used figure is 7%.
4. Your CoastFIRE Number: This is what you're solving for. It's the "Present Value" in a financial calculator.

The Formula: CoastFIRE Number = Future Value / (1 + Rate of Return) ^ Years

Let's plug in our numbers: CoastFIRE Number = $1,500,000 / (1 + 0.07) ^ 35 CoastFIRE Number = $1,500,000 / 10.677 CoastFIRE Number = ~$140,500

This means that if a 30-year-old can get ~$140,500 into their retirement accounts, they can theoretically stop saving for retirement completely, and that money will grow to $1.5 million by age 65.

A CoastFIRE Case Study: Meet Alex

Let's make this real. Meet Alex, a 28-year-old graphic designer living in a mid-sized American city.

• Income: $70,000 per year.
• Goal: Alex wants to have the option to pursue freelance art and work part-time by their mid-30s. They don't love the corporate grind and dream of a more flexible life. Full retirement at 40 seems too aggressive, but working the current job until 65 feels soul-crushing.
• Retirement Vision: Alex envisions a comfortable retirement at age 65 with an annual spending budget of $50,000 (in today's dollars).

Step 1: Alex Calculates Their Full FIRE Number

First, Alex needs a target for traditional retirement.

• Desired Annual Spending: $50,000
• Full FIRE Number: $50,000 x 25 = $1,250,000

Step 2: Alex Calculates Their CoastFIRE Number

Alex decides their target age to hit CoastFIRE is 35. This gives them a clear 7-year "sprint" phase.

• Future Value (Full FIRE Number): $1,250,000
• Years to Grow: 30 years (from age 35 to 65)
• Expected Return (after inflation): 7%

Using a calculator, Alex finds their CoastFIRE number: CoastFIRE Number = $1,250,000 / (1.07) ^ 30 CoastFIRE Number = ~$164,200

Alex now has a concrete goal: Save $164,200 in retirement accounts by age 35.

Step 3: The "Sprint" Phase (Age 28-35)

Alex currently has $25,000 in their 401(k). They need to save an additional ~$139,200 over the next 7 years. This requires a focused effort to "maximize their savings rate."

• Alex's Strategy:

• Maximizes 401(k): Alex increases their 401(k) contribution to get the full employer match.

• Opens a Roth IRA: They commit to maxing out a Roth IRA each year, investing in "low-cost index funds."

• Controls Lifestyle Inflation: Alex gets a raise but directs most of the extra income toward savings instead of increasing spending.

• Side Hustle: Alex picks up some freelance design work on the side, dedicating all of that income directly to their brokerage account.

By saving aggressively for these 7 years, Alex successfully hits their goal. At age 35, their retirement accounts hold $165,000.

Step 4: The "Coasting" Phase (Age 35 Onward)

This is where the magic happens. Alex has reached CoastFIRE. They no longer need to save for retirement. The $165,000, left untouched and invested, will do the rest of the work.

• Alex's New Life:

• Quits the Corporate Job: Alex leaves their high-stress agency job.

• Finds a "Coast" Job: They take a part-time, in-house design job at a local non-profit. The work is meaningful, the hours are flexible (25 hours/week), and the culture is relaxed.

• Covers Living Expenses: The new job pays $40,000 per year. This is less than before, but since Alex no longer needs to save for retirement, it's more than enough to cover their current living expenses.

• Pursues Passions: With more free time, Alex starts a small online print shop for their personal artwork and spends more time hiking and traveling.

Alex has escaped the "golden handcuffs" decades early. They have achieved a level of freedom and work-life balance that most people only dream of, all while their nest egg is quietly compounding in the background, on track to hit $1.25 million by the time they are 65.

What Are the Pros and Cons of a CoastFIRE Strategy?

Pros:

• Reduces Burnout: It provides a light at the end of the tunnel that isn't decades away.
• Incredible Flexibility: It opens up career options and life paths that would be impossible if you needed to maintain a high savings rate.
• Less Deprivation: The "sprint" phase is intense but short. The "coast" phase allows for more relaxed spending.
• Mitigates "One More Year Syndrome": Because you're not quitting work entirely, the psychological leap is much smaller and less terrifying.

Cons:

• Requires Discipline: You must be disciplined enough not to touch the retirement accounts during the "coast" phase.
• Market Risk: The plan relies on long-term market growth. A prolonged period of stagnation could affect the outcome.
• You Still Have to Work: Unlike full FIRE, you still need to earn enough to cover your living expenses until traditional retirement age.
• Healthcare: Finding affordable healthcare without a full-time employer remains a significant challenge in the U.S.

Conclusion: The Power of the Slow Path

CoastFIRE is a brilliant and accessible strategy that redefines what it means to pursue financial independence. It challenges the idea that you must sprint relentlessly for decades and proves that there is a slower, more sustainable path to freedom.

By front-loading your savings efforts, you buy yourself decades of freedom—not freedom from work, but the freedom to choose work that aligns with your values, passions, and desired lifestyle. The CoastFIRE case study of Alex shows that by leveraging the incredible power of compound interest, you can let time do the heavy lifting, allowing you to build a life you love long before you decide to stop working for good.

Now, it's your turn to think about your own timeline: Does the intense sprint of traditional FIRE or the slower, more flexible path of CoastFIRE appeal more to you, and why?

Share your preference in the comments below! Your perspective could help someone else discover the FIRE path that's right for them.