Want To Retire Early but Skip the FIRE Lifestyle? Try This Alternative
Written by
David Nadelle
Edited by
Cory Dudak
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The idea of spending years working hard and saving your money to enjoy your retirement is becoming as outdated as heading to your local bank and conducting an in-person transaction with your passbook. The world changes quickly, but for some young people who want to retire early, it’s not fast enough.
Origins of the FIRE Movement
In 1992, Vicki Robin and Joe Dominguez used the term “Financial Independence, Retire Early (FIRE)” in their book, “Your Money or Your Life” to describe an extreme method to accelerate and expand your golden years. The possibility of retiring between the ages of 30 and 50 comes at the price of trading current activities and expenditures in the pursuit of a bigger nest egg in the future.
The FIRE method of cutting costs to the bare minimum and saving and investing as much of your income as possible is making a resurgence, but it’s not for the weak. Curbing spending and saving may be a worthwhile pursuit, but doing it to the extreme could hurt you if you’re not careful.
Projecting how long you’ll need to live off your savings and determining your annual expenses, investment performances and any possible contingencies — not to mention missing out on any social life and enjoying the present — is a difficult process and harder decision.
Fortunately, there’s a softer alternative that is increasing in popularity: Coast FIRE. But what is it and is it right for you?
What Is Coast FIRE?
Many followers have moved on from the original concept of FIRE, adopting one of many variations, including Lean FIRE (favored by minimalists practicing frugality to achieve financial independence) and Fat FIRE (preferred by higher-wage professionals who want to earn and save as much as possible to afford the finer things in retirement).
According to Time, Coast FIRE “requires you to have enough invested or saved so that, even without additional contributions, your portfolio will grow to support your retirement.” Coast FIRE practitioners typically continue to work, often at low-stress jobs, while taking advantage of compound interest and “coast” into retirement.
Pros of Coast FIRE
If you want to spend less time working and more time enjoying your hobbies and passions, consider these benefits of Coast FIRE.
Financial Independence
When you set up a Coast FIRE plan, your goals will be achieving financial security and having enough savings to cover your expenses. Importantly, you’ll do it without relying on a job you might not like.
Spending and Savings Incentive
Coast FIRE planning can help you efficiently maintain spending and savings goals and encourage front-loading your retirement nest egg. It may also lead to better habits like mindful spending.
More Freedom, Less Stress
Achieving your Coast FIRE goals means you have the freedom to decide how you want to spend your days in retirement, without the bother of working or worrying about money.
Cons of Coast FIRE
While there are benefits of working towards, Coast FIRE, there are some cons to think about before getting started.
An Unreachable Goal
Coast FIRE living isn’t as difficult as using the traditional FIRE approach. However, cutting expenses and saving aggressively could be challenging, especially if you’re paying off debt or living paycheck to paycheck.
Running Out of Money
Accelerating your retirement involves a lot of assumptions and unknowns, including how long you expect to live and how much you expect to need. Additionally, there are unexpected healthcare costs, changes in inflation and fluctuations in the cost of living to contend with.
Retirement Isn’t for Everyone
Without a clear non-financial retirement plan, Coast FIRE retirees many find themselves a little lost, bored and without a loss of purpose that work provided.
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