Definition
Coast FIRE
Coast FIRE is the milestone at which your existing investments, left untouched to compound, will grow into a full retirement corpus by your target age — even if you never invest another rupee.
Once you hit your Coast FIRE number, you no longer need to save aggressively for retirement; you only need to earn enough to cover current expenses while your portfolio 'coasts' to the finish line through compounding. This frees you to take a lower-paying but more enjoyable job, work part-time, or pursue passions.
The number depends on your current age, target retirement age, expected returns and the corpus you ultimately need. Reaching Coast FIRE early — by investing heavily in your twenties — is powerful because the longer the runway, the more compounding does the work for you.
Related terms
- Financial IndependenceFinancial independence is the point at which your investments and passive income can cover your living expenses, so working for money becomes a choice rather than a necessity.
- Barista FIREBarista FIRE is a semi-retirement approach where you stop full-time career work and rely on a part-time or low-stress job, plus your investments, to cover expenses.
- Time Value of MoneyThe time value of money is the principle that a rupee today is worth more than a rupee in the future, because today's rupee can be invested to earn returns.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.