1. What is Coast Fire?

Coast Fire is a financial independence concept where you have saved enough money that it will grow to support your retirement without needing to make additional contributions. You can "coast" to retirement without actively saving more.

2. How Does the Calculator Work?

The calculator uses the Coast Fire formula:

Where:

• \( CF \) — Coast Fire amount needed ($)
• \( AR \) — Annual requirement ($)
• \( WR \) — Withdrawal rate (%)

Explanation: This calculation determines how much money you need to have invested today to eventually reach your retirement goals based on your expected withdrawal rate.

3. Importance of Coast Fire Calculation

Details: Calculating your Coast Fire number helps you understand when you've reached a point where your investments can grow to support your retirement without additional contributions, allowing more flexibility in your career and life choices.

4. Using the Calculator

Tips: Enter your annual retirement income requirement in dollars and your expected safe withdrawal rate as a percentage. Typical withdrawal rates range from 3-4% for early retirement planning.

5. Frequently Asked Questions (FAQ)

Q1: What is a safe withdrawal rate?
A: The safe withdrawal rate is the percentage of your portfolio you can withdraw annually without running out of money. The 4% rule is commonly used, but many early retirees use 3-3.5% for added safety.

Q2: Does this account for inflation?
A: The calculation assumes your investments will outpace inflation over the long term. You may want to add an inflation buffer to your annual requirement for more conservative planning.

Q3: What investment return assumption does this use?
A: This calculation assumes your investments will grow at a rate that supports your withdrawal rate. The specific return isn't explicitly stated but is implied in the withdrawal rate percentage.

Q4: How does Coast Fire differ from regular FIRE?
A: Coast Fire means you have enough saved that it will grow to support full retirement without additional contributions, while traditional FIRE means you have enough to retire immediately.

Q5: Should I consider taxes in my annual requirement?
A: Yes, your annual requirement should include estimated taxes on investment withdrawals. Many people use their current spending plus a buffer for healthcare and taxes.