Anybody here trying Coast FIRE?

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stocknoob4111
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Anybody here trying Coast FIRE?

Post by stocknoob4111 »

My FI# was around $1M but I recently read about Coast FIRE and it makes a whole lot of sense. Your reach a particular amount and the portfolio carries on with minimal contributions just on it's own momentum until you hit your FI # at your specified time frame. In the meantime you can be semi retired because you don't need to save anything substantial and can enjoy your excess money.

I figure I can reach Coast FIRE in just the next 18 months instead of 5 more years to reach FI. Sounds a whole lot better.

So are there any negative assumptions in the Coast FIRE logic? It seems pretty sound to me.
edgeagg
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Re: Anybody here trying Coast FIRE?

Post by edgeagg »

I'd suggest trying an explicitly FIRE focused forum such as Money Mustache. While I'm sure that there are plenty of FI folks on this list, we became FI the Boglehead way. :D
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David Jay
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Re: Anybody here trying Coast FIRE?

Post by David Jay »

Nothing is for free. If you want to work for another 5 years, so be it. I would rather keep the pedal to the metal and retire in, say, 4 years.

Keep in mind the the time difference starts in 18 months, so at that point it is the difference in my example is between "coasting" for 30 months or pushing hard for 18 months. The difference is 12 months.
Last edited by David Jay on Sat Oct 17, 2020 7:57 am, edited 1 time in total.
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Horton
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Re: Anybody here trying Coast FIRE?

Post by Horton »

It’s better to focus on financial independence. Once you have an emergency fund, no debt, and sizeable retirement savings, then you have a lot of flexibility. Getting too focused on the retire early part might mean that you lock yourself into a job you hate whereas you could have switched to something else that still paid the bills while giving you flexibility/time/peace/etc to do what you really wanted.
fortunefavored
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Re: Anybody here trying Coast FIRE?

Post by fortunefavored »

It never made sense to me either. From my real world experience, from 1998 to 2013.. I had zero real returns after inflation.

Counting on 6% every year (or whatever number you care to use) that will let you "coast" into FIRE seems like a pretty big gamble vs. guaranteed wage savings.

(I plan to FIRE next year in my late 40s)
Hiker8
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Re: Anybody here trying Coast FIRE?

Post by Hiker8 »

Sure, why not? You are getting to the same number but simply taking more time. There could be some additional risk there (I.e. losing your job or finding that the perfect low paying job to “coast” to FI doesn’t exist) but otherwise, I don’t see the problem.
flyingaway
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Re: Anybody here trying Coast FIRE?

Post by flyingaway »

Why don't you get a higher paying job and turbocharge your FI journey, I like turboFI better.
oldfort
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Re: Anybody here trying Coast FIRE?

Post by oldfort »

stocknoob4111 wrote: Fri Oct 16, 2020 7:21 pm My FI# was around $1M but I recently read about Coast FIRE and it makes a whole lot of sense. Your reach a particular amount and the portfolio carries on with minimal contributions just on it's own momentum until you hit your FI # at your specified time frame. In the meantime you can be semi retired because you don't need to save anything substantial and can enjoy your excess money.

I figure I can reach Coast FIRE in just the next 18 months instead of 5 more years to reach FI. Sounds a whole lot better.

So are there any negative assumptions in the Coast FIRE logic? It seems pretty sound to me.
Maybe, I don't understand what Coast FIRE means, but a lot of careers don't allow for part time work. You either are full time or you retire completely.
stoptothink
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Re: Anybody here trying Coast FIRE?

Post by stoptothink »

oldfort wrote: Fri Oct 16, 2020 8:00 pm
stocknoob4111 wrote: Fri Oct 16, 2020 7:21 pm My FI# was around $1M but I recently read about Coast FIRE and it makes a whole lot of sense. Your reach a particular amount and the portfolio carries on with minimal contributions just on it's own momentum until you hit your FI # at your specified time frame. In the meantime you can be semi retired because you don't need to save anything substantial and can enjoy your excess money.

I figure I can reach Coast FIRE in just the next 18 months instead of 5 more years to reach FI. Sounds a whole lot better.

So are there any negative assumptions in the Coast FIRE logic? It seems pretty sound to me.
Maybe, I don't understand what Coast FIRE means, but a lot of careers don't allow for part time work. You either are full time or you retire completely.
+1. The type of careers where you could "cut back" are few and far between.
Trader Joe
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Re: Anybody here trying Coast FIRE?

Post by Trader Joe »

"Anybody here trying Coast FIRE?"

No, not at all.
philef
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Re: Anybody here trying Coast FIRE?

Post by philef »

Do you have a link to the article you read?
Katietsu
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Re: Anybody here trying Coast FIRE?

Post by Katietsu »

Clever name. Anyway, if you have a job that can be downshifted, I think going part time with reduced savings is a great option. You will probably pay less taxes. Even if you do not get great returns on your savings, you reduce the number of years that your investments need to support. Of course, your job, your lifestyle, your goals are all going to be more important than the absolute dollar numbers.
KyleAAA
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Re: Anybody here trying Coast FIRE?

Post by KyleAAA »

There are 2 big assumptions:

1.) Your portfolio will earn enough to reach your FI number.
2.) If you start spending excess salary instead of saving, are you sure your FI number doesn't go up?

Neither are airtight assumptions.
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9-5 Suited
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Re: Anybody here trying Coast FIRE?

Post by 9-5 Suited »

The acronym soup of the FIRE movement is getting a little out there. Financial independence means you don’t have to work for money if you don’t want to. I would very much consider myself a part of that movement, broadly speaking.

But Coast FIRE is just changing jobs and taking longer to get to FI. Nothing wrong with it but it’s not some magical thing.

Lean FIRE is reducing your lifestyle to retire earlier. Fat FIRE is saving more for luxuries. Giving all these things names only seems to serve to make them seem cooler than they are.

Wow, I’m 34 and that’s my first Boomer rant :D
arsenalfan
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Re: Anybody here trying Coast FIRE?

Post by arsenalfan »

stocknoob4111 wrote: Fri Oct 16, 2020 7:21 pm My FI# was around $1M but I recently read about Coast FIRE and it makes a whole lot of sense. Your reach a particular amount and the portfolio carries on with minimal contributions just on it's own momentum until you hit your FI # at your specified time frame. In the meantime you can be semi retired because you don't need to save anything substantial and can enjoy your excess money.

I figure I can reach Coast FIRE in just the next 18 months instead of 5 more years to reach FI. Sounds a whole lot better.

So are there any negative assumptions in the Coast FIRE logic? It seems pretty sound to me.
New term to me but I fit it
Partner and I are 0.6 fte and kids 14 and 11
Savings rate was 45% now 20% since both kids private school and we are consuming more services/vacations
Can work this 0.6 fte for 20-30 years since like our jobs and luckily are in positions where this is acceptable (both MDs)
Aside from rentals the accounts are about 4-5mm so will just coast with those, adding 120 per year
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Brianmcg321
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Re: Anybody here trying Coast FIRE?

Post by Brianmcg321 »

That's pretty much what my wife and I are doing, but I didn't know it was called that until recently.

We had a goal of $1mil by the time I was 60. We hit that number this year. Thirteen years early.

So now, instead of plowing 25% of my income into my 401k and Roth IRAs, I'm just investing 6% into my 401k. With the match that's still about $1000 a month.

The rest is being split into our savings account and VTSAX in our brokerage account. We decided to do some renovations to the house and upgrade our cars. I'm thinking about pulling the plug at 55. Who knows. My job is pretty stress free and I like the hours. :beer
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LittleMaggieMae
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Re: Anybody here trying Coast FIRE?

Post by LittleMaggieMae »

stocknoob4111 wrote: Fri Oct 16, 2020 7:21 pm
So are there any negative assumptions in the Coast FIRE logic? It seems pretty sound to me.
I have done my best to "front load" my retirement savings under the assumption that they'd have longer to grow and that would mean that I would have to "save less" over all. It sounds a little like this Coast FIRE you speak of. :)

I'm in the end game - as in I may not have a job in 12 to 18 months - but I'm close enough to "Financial Independence" that I might not want to get another high paying full time job... If I were to keep the high paying job (and the high level of saving) for another 5 years I will reach what I feel is a sure thing: Full Financial Independence. I have some stressful decisions to make. :)

I think some of the negative's of the Coast FIRE logic might be
  • how far out your "retirement" horizon is - if it's more than a handful of years - 1 million might not be enough because things change (costs go up and markets go down).
    how much lifestyle creep will you have when you cut back on 'saving' but retain your high paying job - will you have to cut back your lifestyle when you do retire because 1 million will not sustain your life in the fashion to which you have become accustom?
    what happens to your ability to earn bigger income if you switch jobs (lower pay) but find that in 5 or 10 years - you will need more than 1 million for retirement?
    How does the lower income job effect the SS part of your retirement picture? Will 1 million still be enough?
    A pension may be the game changer here... if you have the big savings (that will grow to your #, coupled with a pension and SS) even I would be tempted to not squeeze every drop of blood out of my budget in order to save for retirement...
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Re: Anybody here trying Coast FIRE?

Post by flaccidsteele »

FI* is the best opportunity to develop another stream of income
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
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stocknoob4111
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Re: Anybody here trying Coast FIRE?

Post by stocknoob4111 »

philef wrote: Fri Oct 16, 2020 8:13 pm Do you have a link to the article you read?
https://www.businessinsider.com/persona ... nt-2020-10
Hiker8
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Re: Anybody here trying Coast FIRE?

Post by Hiker8 »

Katietsu wrote: Fri Oct 16, 2020 8:15 pm Clever name. Anyway, if you have a job that can be downshifted, I think going part time with reduced savings is a great option. You will probably pay less taxes. Even if you do not get great returns on your savings, you reduce the number of years that your investments need to support. Of course, your job, your lifestyle, your goals are all going to be more important than the absolute dollar numbers.
+1
Kookaburra
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Re: Anybody here trying Coast FIRE?

Post by Kookaburra »

9-5 Suited wrote: Fri Oct 16, 2020 8:30 pm The acronym soup of the FIRE movement is getting a little out there. Financial independence means you don’t have to work for money if you don’t want to. I would very much consider myself a part of that movement, broadly speaking.

But Coast FIRE is just changing jobs and taking longer to get to FI. Nothing wrong with it but it’s not some magical thing.

Lean FIRE is reducing your lifestyle to retire earlier. Fat FIRE is saving more for luxuries. Giving all these things names only seems to serve to make them seem cooler than they are.

Wow, I’m 34 and that’s my first Boomer rant :D
Don’t forget wildFIRE, which is to retire early and take your savings to Vegas to fritter on drinks, dancers, and roulette wheels.
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firebirdparts
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Re: Anybody here trying Coast FIRE?

Post by firebirdparts »

I’m thinking coast fire should have been RIFLE, reach independence financially, less early.
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whodidntante
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Re: Anybody here trying Coast FIRE?

Post by whodidntante »

9-5 Suited wrote: Fri Oct 16, 2020 8:30 pm But Coast FIRE is just changing jobs and taking longer to get to FI. Nothing wrong with it but it’s not some magical thing.
You'll never have a successful blog thinking like that. :P
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JoMoney
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Re: Anybody here trying Coast FIRE?

Post by JoMoney »

I'm doing the type of 'FIRE' where I just live off the income from the side hustle I got with all my free time... It's not bad at all, only about 40 hours a week, covers medical insurance and social security, and is a nice break from all the blogging involved with other types of FIRE.
I don't mind it at all, but I do get some funny looks when I tell my co-workers I'm retired :P
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Register44
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Re: Anybody here trying Coast FIRE?

Post by Register44 »

JoMoney wrote: Fri Oct 16, 2020 9:44 pm I'm doing the type of 'FIRE' where I just live off the income from the side hustle I got with all my free time... It's not bad at all, only about 40 hours a week, covers medical insurance and social security, and is a nice break from all the blogging involved with other types of FIRE.
I don't mind it at all, but I do get some funny looks when I tell my co-workers I'm retired :P
hahah that was a good one there! :)
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David Jay
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Re: Anybody here trying Coast FIRE?

Post by David Jay »

9-5 Suited wrote: Fri Oct 16, 2020 8:30 pmWow, I’m 34 and that’s my first Boomer rant :D
There will be more... :wink:
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absolute zero
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Re: Anybody here trying Coast FIRE?

Post by absolute zero »

I suspect that the personality types that achieve this “coast fire” are (typically) not the kind of people that would be interested in suddenly ceasing to save money.

Honestly, to me the whole point of a high savings rate is that it gives you more and more options/flexibility in life as your savings grow. I’d hate to just stop saving altogether. Especially since no one knows what stock returns will look like the next 10/20/30 years.
Day9
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Re: Anybody here trying Coast FIRE?

Post by Day9 »

Most people are criticizing this idea but Bogleheads accept the idea of "OMYS", One More Year Syndrome. I wonder how these two ideas interact. Perhaps CoastFIRE could be the solution to OMYS for some people.
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JBTX
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Re: Anybody here trying Coast FIRE?

Post by JBTX »

This is great! Now instead of FIRE at 35 years, you can "Coast Fire" at 30! All one had to do was rename FIRE and you can retire 5 years earlier!! This works because the market always goes up. That is so totally awesome! What could possibly go wrong?
Normchad
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Re: Anybody here trying Coast FIRE?

Post by Normchad »

This is of great interest to me.

At my age, I am close to FI, but maybe not comfortably so. But I have saved enough, so that I don't think I need to ever save another penny. If I just earn enough now to cover my daily expenses, I will be good to go when it comes time to retire.

But I am currently close. And I'm debating what to do. Current options being considered
1) Keep on what I've been doing. Keep working, and save a ton of $$$......
2) Retire and live off of the portfolio.... the VPW worksheet says I'm more than good to go. Firecalc says I'm like 97.1% for 45 years....
3) Keep on working, but stop savings, and live it up like a wild man until I retire. (Keep working full time at current job, but take more/better vacations, sweat the stress less, etc)
4) Quit the job, and go take another one someplace else.

I think #3 or #4 are the closest to CoastFIRE. (As in, I've saved enough, if I coast now, I'll get there)..... Honestly I'll probably try to do #3 for a while, and then retire when I just can't stand working any longer....

So I would be very interested to hear from anybody that has persued the CoastFIRE strategy.....
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Re: Anybody here trying Coast FIRE?

Post by Normchad »

JBTX wrote: Fri Oct 16, 2020 11:52 pm This is great! Now instead of FIRE at 35 years, you can "Coast Fire" at 30! All one had to do was rename FIRE and you can retire 5 years earlier!! This works because the market always goes up. That is so totally awesome! What could possibly go wrong?
Yeah, if you had a high paying job that you hated, but amassed a 500K portfolio at 30, it might be reasonable to leave that job, and take one you liked better, even if it paid a lot less. You could do this, and COAST, because the 500K should grow to a big amount over the next 20-35 years.....

For example, somebody that is totally burned out at one of the FANNGS, but longs to be a park ranger, they could go do that.
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McGilicutty
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Re: Anybody here trying Coast FIRE?

Post by McGilicutty »

This is kind of what I'm doing, although I didn't plan it this way.

My journey has been as follows:
1) Work at a fairly high-paying, high stress job on the coast (with a fairly high savings rate)
2) Get burnt out, convince myself that I have enough to leanFIRE in flyover country
3) Quit job, move to flyover country and try early retirement
4) After a year or so, discover that I'm not so good at adhering to the leanFIRE lifestyle and start looking for a job
5) Find a low-stress job that just covers my living expenses

My job has switched to work-from-home since the pandemic hit and the bosses say we won't be going back to the office until sometime next year. I find working from home to be very low stress and am hoping that my job goes permanent WFH.

So I'm pretty much coasting in my low-stress job now, watching my portfolio grow, and not so worried about early retirement anymore.
terran
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Re: Anybody here trying Coast FIRE?

Post by terran »

Not for us (when we're done, we're done), but if it interests you then why not? Lots of people take lower paying jobs for lower stress or increased happiness. Lots of people live paycheck to paycheck. Doing either/both of those things with a nest egg that should grow to provide a better than social security alone retirement and/or still early retirement puts you way ahead of those who make such choices without the extra funding.
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Re: Anybody here trying Coast FIRE?

Post by JBTX »

Normchad wrote: Sat Oct 17, 2020 12:00 am
JBTX wrote: Fri Oct 16, 2020 11:52 pm This is great! Now instead of FIRE at 35 years, you can "Coast Fire" at 30! All one had to do was rename FIRE and you can retire 5 years earlier!! This works because the market always goes up. That is so totally awesome! What could possibly go wrong?
Yeah, if you had a high paying job that you hated, but amassed a 500K portfolio at 30, it might be reasonable to leave that job, and take one you liked better, even if it paid a lot less. You could do this, and COAST, because the 500K should grow to a big amount over the next 20-35 years.....

For example, somebody that is totally burned out at one of the FANNGS, but longs to be a park ranger, they could go do that.
So what happens if you coast fire at 30 with 500k, the market tanks the next year and then you have $250k, and doesn't bounce back up right away, and meanwhile you are pulling $20k a year give or take from your portfolio?

Also the idea that the we you live your life at 30 is the way you will want to live when 45 or 50 is puzzling. I didn't spend a whole lot at 30. Now I am married with kids and expenses are a lot higher. You are leaving yourself no choices.
Normchad
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Re: Anybody here trying Coast FIRE?

Post by Normchad »

JBTX wrote: Sat Oct 17, 2020 12:16 am
Normchad wrote: Sat Oct 17, 2020 12:00 am
JBTX wrote: Fri Oct 16, 2020 11:52 pm This is great! Now instead of FIRE at 35 years, you can "Coast Fire" at 30! All one had to do was rename FIRE and you can retire 5 years earlier!! This works because the market always goes up. That is so totally awesome! What could possibly go wrong?
Yeah, if you had a high paying job that you hated, but amassed a 500K portfolio at 30, it might be reasonable to leave that job, and take one you liked better, even if it paid a lot less. You could do this, and COAST, because the 500K should grow to a big amount over the next 20-35 years.....

For example, somebody that is totally burned out at one of the FANNGS, but longs to be a park ranger, they could go do that.
So what happens if you coast fire at 30 with 500k, the market tanks the next year and then you have $250k, and doesn't bounce back up right away, and meanwhile you are pulling $20k a year give or take from your portfolio?

Also the idea that the we you live your life at 30 is the way you will want to live when 45 or 50 is puzzling. I didn't spend a whole lot at 30. Now I am married with kids and expenses are a lot higher. You are leaving yourself no choices.
I don’t think they’d quit working all together at 30. Rather switching gears to something lower stress and lower pay, and stopping savings. So the market tanking sucks, but would bounce back by the time they retire for good, say at 60. So at 60, they’d have a portfolio that would support whatever lifestyle they had been living at 59.

Anyway, that’s the idea as I understand it.
sfnerd
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Re: Anybody here trying Coast FIRE?

Post by sfnerd »

Kookaburra wrote: Fri Oct 16, 2020 9:18 pm
9-5 Suited wrote: Fri Oct 16, 2020 8:30 pm The acronym soup of the FIRE movement is getting a little out there. Financial independence means you don’t have to work for money if you don’t want to. I would very much consider myself a part of that movement, broadly speaking.

But Coast FIRE is just changing jobs and taking longer to get to FI. Nothing wrong with it but it’s not some magical thing.

Lean FIRE is reducing your lifestyle to retire earlier. Fat FIRE is saving more for luxuries. Giving all these things names only seems to serve to make them seem cooler than they are.

Wow, I’m 34 and that’s my first Boomer rant :D
Don’t forget wildFIRE, which is to retire early and take your savings to Vegas to fritter on drinks, dancers, and roulette wheels.
Then after your money is gone, you can try ForestFIRE, which is where you go into the woods and live off of nuts and berries.
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Re: Anybody here trying Coast FIRE?

Post by Schlabba »

I think it makes sense. If the market roughly doubles your nest egg every 10 years, you can stop contributing early and use that fact.

You do run the risk of a lost decade, but I guess there is also nothing keeping you from getting back to work.
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Re: Anybody here trying Coast FIRE?

Post by pasadena »

LittleMaggieMae wrote: Fri Oct 16, 2020 9:02 pm how much lifestyle creep will you have when you cut back on 'saving' but retain your high paying job - will you have to cut back your lifestyle when you do retire because 1 million will not sustain your life in the fashion to which you have become accustom?
I had always understood CoastFIRE as semi-retired where you work either a low stress job, or reduced hours, simply enough to live on. No lifestyle creep, but rather reduced income, not increased spending with the same job and income as before.
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Re: Anybody here trying Coast FIRE?

Post by mrspock »

fortunefavored wrote: Fri Oct 16, 2020 7:40 pm It never made sense to me either. From my real world experience, from 1998 to 2013.. I had zero real returns after inflation.

Counting on 6% every year (or whatever number you care to use) that will let you "coast" into FIRE seems like a pretty big gamble vs. guaranteed wage savings.

(I plan to FIRE next year in my late 40s)
How is that possible? Even an 80/20 portfolio Total US/Total Bond tripled during that period (6.7% CAGR) with no contributions, a contribution of just $1k/month returned 13% CAGR. What exactly did you invest in?
Chicken Little
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Re: Anybody here trying Coast FIRE?

Post by Chicken Little »

My guess is FIRE will damage a lot of people. Most of them aren't going to be able to return to work in 10-15 years at near their same wages. Many plan to take advantage of subsidized healthcare, which is a separate discussion, but also a pretty big risk. If you really have the money in place and you want to stop working, you don't need an acronym, you just don't go anymore.

I'm basically fixated on the day I don't have to go to work anymore. I really like my job, so maybe I'll go in after I reach that point? What I'm not going to do on retirement day #1 is contemplate how I can make money now that I've quit my real job.
Normchad
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Re: Anybody here trying Coast FIRE?

Post by Normchad »

Chicken Little wrote: Sat Oct 17, 2020 5:51 am My guess is FIRE will damage a lot of people. Most of them aren't going to be able to return to work in 10-15 years at near their same wages. Many plan to take advantage of subsidized healthcare, which is a separate discussion, but also a pretty big risk. If you really have the money in place and you want to stop working, you don't need an acronym, you just don't go anymore.

I'm basically fixated on the day I don't have to go to work anymore. I really like my job, so maybe I'll go in after I reach that point? What I'm not going to do on retirement day #1 is contemplate how I can make money now that I've quit my real job.
I do wonder how it will turn out for the folks retiring at 30 or even 40. A lot of them are very smart and talented, and earn a ton of money now. And I agree, I don’t think they’ll be able to get that income again after being out of the work force for ten years. What I do know is, my aspirations and world view changed an awful lot after that age. This affects what and how much I want to spend, etc. and a lot of people might get hit by divorce, disability, kids after that age.

It sounds like a dream life to nope out at that age, but I do wonder how sustainable it will be price to be.

Then again, I doubt many people will ever actually FIRE. I think it gets talked about a lot, but few will actually do it. (I mean retire very young).
itmaybejj
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Re: Anybody here trying Coast FIRE?

Post by itmaybejj »

For what it's worth, my investment tracking spreadsheet has a tab where I calculated the net present value of my retirement target based on several possible return and contribution rates, for each remaining working year.

I put that together because I wanted some upper and lower bounds, because without them I had no idea whether the cash value of my accounts was a lot or a little compared to where I "should" be.

There is a column for the number at which I am likely to reach my target given *no* additional contributions -- the column is literally titled "coast target" -- and my plan has been, as I approach that moving target:
  • to consider myself "wealthy" in my own mind even if I have much, much less than the Jones's -- which is to say, to recognize I now have "enough" so long as I can keep working, so I can stop worrying about money and stop wincing when the family orders from the "good" pizza place
  • to dramatically increase my charitable giving -- eg, I now know that everything left after expenses and retirement plan contributions is money I legit don't need, and I know folks who rely on food banks for dinner...
If I exceed that number and the opportunity arose to drop to a 4 day week I'd jump on it. But anything more than that and I would fear losing my edge and accidentally "getting retired" early. One can't coast to retirement while making withdrawals!
TheNightsToCome
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Re: Anybody here trying Coast FIRE?

Post by TheNightsToCome »

Chicken Little wrote: Sat Oct 17, 2020 5:51 am My guess is FIRE will damage a lot of people. Most of them aren't going to be able to return to work in 10-15 years at near their same wages. Many plan to take advantage of subsidized healthcare, which is a separate discussion, but also a pretty big risk. If you really have the money in place and you want to stop working, you don't need an acronym, you just don't go anymore.

I'm basically fixated on the day I don't have to go to work anymore. I really like my job, so maybe I'll go in after I reach that point? What I'm not going to do on retirement day #1 is contemplate how I can make money now that I've quit my real job.
It's a challenge to keep up with definitions of FIRE, but Coast FIRE doesn't imply early retirement, it means that you have saved enough that you don't have to save any more -- but you do have to keep working to cover your expenses until retirement. The idea is that you have a planned retirement age (could be 65 yo) with estimated retirement expenses that require a certain nest egg (typically assuming a 4% SWR). You project investment returns then calculate the present value of your retirement nest egg.

When you reach this savings goal then you can stop saving for retirement (because your current savings are projected to grow sufficiently to fund your future retirement), and spend your entire salary.

This is related to Barista FIRE. That is, once you reach your Coast FIRE number, you might want to quit your stressful job and just earn enough to cover living expenses -- by working as a Starbucks barista (or some other low-paying job that is presumed to be less stressful).

There are a couple of problems with the Coast FIRE plan:
1. Long-term returns may be much less than projected.
2. Your future spending wants/needs may be much different than your current projections.
3. If you downshift to a barista-style job you may lose the ability to regain your prior position, and the new job may be worse than the current job (just in different ways).

Coast FIRE works for those who enjoy the extra spending.
loukycpa
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Re: Anybody here trying Coast FIRE?

Post by loukycpa »

I am in a sense planning to "Coast FIRE" I suppose. 47 with a $1.2M portfolio and all the house I want with no mortgage. Planning to downshift from high stress "partner" to a less stressful "consultant" role at my firm at the end of the year. Still full time but less responsibility. I want to keep my skills and professional network current and I can still enjoy working on challenging projects. But you won't see me there after 5:00 or on Saturdays anymore, or stressed about keeping a client (I'll let others do the worrying :happy ). I don't anticipate having a high savings rate going forward but I don't plan to draw from my investments either.

Spouse is 45 and works full time as a teacher in public schools and will retire at 55 (10 years out when I am 57) with health insurance. I will see where we are then and decide what the next ten years should look like.
sd323232
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Re: Anybody here trying Coast FIRE?

Post by sd323232 »

Horton wrote: Fri Oct 16, 2020 7:35 pm It’s better to focus on financial independence. Once you have an emergency fund, no debt, and sizeable retirement savings, then you have a lot of flexibility. Getting too focused on the retire early part might mean that you lock yourself into a job you hate whereas you could have switched to something else that still paid the bills while giving you flexibility/time/peace/etc to do what you really wanted.
This! Couldn't have said better myself. Problem with FIRE is people leaving alot of money on table, switching to a job that u enjoy is the key
sd323232
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Re: Anybody here trying Coast FIRE?

Post by sd323232 »

9-5 Suited wrote: Fri Oct 16, 2020 8:30 pm The acronym soup of the FIRE movement is getting a little out there. Financial independence means you don’t have to work for money if you don’t want to. I would very much consider myself a part of that movement, broadly speaking.

But Coast FIRE is just changing jobs and taking longer to get to FI. Nothing wrong with it but it’s not some magical thing.

Lean FIRE is reducing your lifestyle to retire earlier. Fat FIRE is saving more for luxuries. Giving all these things names only seems to serve to make them seem cooler than they are.

Wow, I’m 34 and that’s my first Boomer rant :D
Wow, nice info, I love fatfire lol, I dont mind working for next 10-15 years, lean fire is not for me.
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Watty
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Re: Anybody here trying Coast FIRE?

Post by Watty »

stocknoob4111 wrote: Fri Oct 16, 2020 7:21 pm So are there any negative assumptions in the Coast FIRE logic? It seems pretty sound to me.
A big risk is that even if you work in a field where you can easily work part time you might not be able to if you run into health problems or cannot work for some other reasons. For example if you needed to work until you are 60 to make your numbers work and you have to stop working when you are 50 then you could be in a lot of trouble.

The part time worker will also frequently be the first to be laid off or have their hours cut when business is slow. One thing to consider is that you might be able to cut back to part time work with your current employer but trying to find a different part time job may be very difficult.

That said about five years before I actually retired I cut my retirement saving back to just the 6% 401k contribution that I needed to get my my employers maximum 3% match. I used the freed up money to start doing things like more travel. I had been saving something like 15 o 20 percent of my income. The main reason that I cut back my savings that my nest egg was already pretty large(for me) and so any additional savings would really not make much difference in when I could retire.
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JoeRetire
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Re: Anybody here trying Coast FIRE?

Post by JoeRetire »

stocknoob4111 wrote: Fri Oct 16, 2020 7:21 pm My FI# was around $1M but I recently read about Coast FIRE and it makes a whole lot of sense. Your reach a particular amount and the portfolio carries on with minimal contributions just on it's own momentum until you hit your FI # at your specified time frame. In the meantime you can be semi retired because you don't need to save anything substantial and can enjoy your excess money.

I figure I can reach Coast FIRE in just the next 18 months instead of 5 more years to reach FI. Sounds a whole lot better.

So are there any negative assumptions in the Coast FIRE logic? It seems pretty sound to me.
If the goal is coasting as soon as possible, I guess it makes sense. (Seems like lots of folks coast through much of their career).
If the goal is retiring as soon as possible, it doesn't seem to make sense.

It all depends on your goals...

No, I haven't tried Coast FIRE. I worked. Then I didn't.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
Dottie57
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Re: Anybody here trying Coast FIRE?

Post by Dottie57 »

fortunefavored wrote: Fri Oct 16, 2020 7:40 pm It never made sense to me either. From my real world experience, from 1998 to 2013.. I had zero real returns after inflation.

Counting on 6% every year (or whatever number you care to use) that will let you "coast" into FIRE seems like a pretty big gamble vs. guaranteed wage savings.

(I plan to FIRE next year in my late 40s)
+1
fortunefavored
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Re: Anybody here trying Coast FIRE?

Post by fortunefavored »

mrspock wrote: Sat Oct 17, 2020 5:09 am
fortunefavored wrote: Fri Oct 16, 2020 7:40 pm It never made sense to me either. From my real world experience, from 1998 to 2013.. I had zero real returns after inflation.

Counting on 6% every year (or whatever number you care to use) that will let you "coast" into FIRE seems like a pretty big gamble vs. guaranteed wage savings.

(I plan to FIRE next year in my late 40s)
How is that possible? Even an 80/20 portfolio Total US/Total Bond tripled during that period (6.7% CAGR) with no contributions, a contribution of just $1k/month returned 13% CAGR. What exactly did you invest in?
The "personal" in personal finance, I guess. My IRR for that period (to, admittedly, one of the dips in 2013) was a bit around 3%

Bad luck in lumpy investment periods, moderate tilts not working out (REITs, corporates, TIPS)

Not all bad news, it made me focus on making more money - so problem solved.
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