Coast FIRE is a milestone rather than a destination. Reaching it does not mean you can stop working — it means you can stop saving for retirement specifically, because what is already invested will get there on its own given enough time.
The arithmetic is a single compound-growth calculation run backwards. If you need $1.5 million at 65, expect a 5% real return, and you are 35, then you need roughly $347,000 invested today for compounding alone to close the gap. Anything you earn after that only has to cover the years between now and then.
Its practical value is psychological and it is considerable. Hitting Coast FIRE converts retirement saving from an open-ended obligation into a solved problem, which is what makes a lower-paid job, a sabbatical or a career change financially survivable rather than reckless.
The assumptions carry the whole result. Coast FIRE is extremely sensitive to the real return you assume — the difference between 5% and 7% over thirty years is close to a factor of two — which is precisely the kind of single-point assumption a simulation is better at handling than a calculator.
See also
- FIRE — Financial Independence, Retire Early: saving a high share of income so invested assets can cover living costs decades before a conventional retirement age.
- Real return — A return measured after inflation, showing the change in purchasing power. A 7% nominal return with 3% inflation is roughly a 4% real return.
- Asset allocation — The split of a portfolio across asset classes — equities, bonds, cash, and others — which is the primary determinant of both its expected return and its volatility.