Key takeaways

• Coast FIRE may offer a more balanced approach with less extreme sacrifices than traditional FIRE
• Americans estimate needing $1.06M to retire
• Coasters continue to work to traditional retirement age, allowing target savings more time to continue to grow

While the FIRE strategy is aimed at intense saving to retire decades early, Coast FIRE focuses on saving and investing enough upfront to enjoy career flexibility and freedom. While money grows, Coasters continue to work to pay the bills, without touching retirement funds.

The FIRE movement (Financial Independence Retire Early) embraces an early exit from the workforce, years or even decades before the traditional retirement age (65 for men, 63 for women on average). But some proponents of the movement are adjusting the strategy, focusing more on sustainability than drastic lifestyle changes. Dubbed “Coast FIRE,” this approach to FIRE refers to those who accumulate their target savings amount — but rather than leave the workforce early, they opt to coast toward retirement by continuing to work to cover living expenses. 

Coast FIRE vs. FIRE: What’s the difference?

The main difference between the traditional FIRE and Coast FIRE philosophies comes down to timing — for when to retire and tap into savings.

According to Empower Personal Dashboard^TM data, the typical American has $491,022 saved for retirement, and $1,148,441 on average by the time they’re in their 60s. Since early retirement is the goal with FIRE, adopters of the strategy look to accumulate more sooner by sticking to some key principles: Extreme savings of as much as 50%-75% or more of earnings, frugal living, and smart, aggressive investing. Once they reach savings targets, FIRE participants typically retire to live off their nest egg indefinitely.

But the FIRE approach isn’t ideal for everyone — it can be intense, and sticking to a crash diet in lifestyle changes can lead to fatigue.¹ There’s a potential financial risk too: The earlier a person retires, the longer their money might need to last.

Coast enthusiasts take another path. Leaving 9-5 behind isn’t the priority — instead it’s all about getting savings and investments to a point that’s enough, without adding any more, to fund retirement at a traditional retirement age.

Since traditional FIRE proponents live off accumulated resources sooner than Coasters, the original strategy can require saving much more.² For those aiming to retire in their 30s and 40s, even a few million dollars in savings could fall short if expenses rise at a faster rate than portfolio returns.³

Read more: Sparks fly: The FIRE movement trend is fueling early retirement

How does Coast FIRE work?

Coasters front-load savings by socking away and investing as much as possible during earlier career years to reach a target savings goal that’s based on desired retirement lifestyle. Once Coasters hit their goal, they can let their savings grow while they take advantage of the flexibility to “coast” through the rest of their careers. This may mean working part-time or switching to a lower paying or low-pressure job doing something they enjoy. Rather than tap into retirement savings early, Coasters rely on their continued income stream to pay the bills, without the pressure or need to keep saving aggressively for their golden years.

Advantages of Coast FIRE strategy

“The sooner the better” incentive. Coast FIRE plans are designed for saving and investing as early and as much as possible, while spending less and taking advantage of the power of compounding. Consider this hypothetical scenario:⁴

If an individual accumulates $1.5 million in retirement savings by age 45 and invests it all, based on a 7% annual return those funds could grow to about $4.7 million by the time the individual reaches age 62.

Flexibility. Reaching the Coast target point provides the freedom to shift careers, work less, or pursue passion projects without the pressure to save.

Security. Working in some capacity keeps access open to workplace benefits like health insurance, and even employer-sponsored retirement accounts. Even though Coasters ideally do not need to keep socking away money, staying in the workforce means they may still be able to contribute to a 401(k) or other retirement account.

Read more: Average retirement savings by age

Planning for Coast FIRE

Coast FIRE isn’t without its challenges. Empower findings show Americans rate their satisfaction with their retirement savings an average of 4.54, and the likelihood of retiring at their goal age at 4.93 out of 10. An accelerated savings timeline can further complicate things.

Putting away enough to reach a Coast target can be challenging, especially with other financial responsibilities, and market fluctuations can detour plans. Focusing intently on retirement savings may also mean having less of an emergency cushion if unexpected expenses come up.

While Americans say they need about $1.06 million to retire, that amount varies depending on individual circumstances. Before pursuing a Coast FIRE strategy, it may be a good idea to determine savings targets using a retirement calculator.

Read more: Planning ahead: Balancing saving and spending in retirement