Saving up for retirement isn't easy, but more people are trying a strategy called "Coast FIRE" — investing aggressively early on, then letting that money grow without adding another dollar.
Coast FIRE is a spin on the better-known FIRE movement — short for "Financial Independence, Retire Early" — where people save and invest aggressively to retire young.
Ryan Sterling, founder and CEO of NerdWallet Wealth Partners, said traditional FIRE can feel unrealistic for a lot of people.
"The one issue with FIRE is it creates a lot of anxiety to retire fast, retire as soon as possible," Sterling said. "That oftentimes requires making sacrifices today, but it also requires making sacrifices into the future."
How is Coast FIRE different?
Coast FIRE works a little differently. You invest heavily early in life until you hit a target amount — your "Coast FIRE number." Once you hit it, the idea is your investments keep growing on their own until retirement. The catch? You keep working.
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"Let's say there is a couple that wants to retire at the age of 55, and they're in their early 40s, and they've reached Coast FIRE," Sterling explained. "What that means is they don't need to be as aggressive with savings. They still need to work. But what that means is it opens up capacity to spend today."
Reaching Coast FIRE could mean finally taking that big trip, or buying a second home, "Because they don't need to save as much between now and retirement," Sterling said.
How to hit Coast FIRE
Getting there still takes sacrifice. Sterling said younger workers may need to save aggressively early on -- even delaying major expenses like a bigger home.
"You have these goals to buy a house, to start a family. Your expenses are going to start to creep up," he explained. "You have this window of time where you have dual income, no kids. Take this as an opportunity to save as much as possible."
For experienced workers, he said it's worth checking the numbers. Some people reach Coast FIRE without even realizing it.
"For those who are in their 40s or early 50s, let's take a look at your numbers to see are you at Coast FIRE? And if not, how close are you to it?" Sterling said.
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Coast FIRE calculators are available online, including on NerdWallet. They use your monthly spending now and in retirement, target retirement age, and current age and investments to estimate how much you still need to coast into retirement. Everyone is going to have a different Coast FIRE number because of all the variables.
A good starting point, according to NerdWallet, is assuming you'll need about 70% to 90% of your current income in retirement.
As with any investment strategy, there's a level of risk that comes with Coast FIRE. The core principle hinges on the market performing how you expect it to. Just a few down-market years can disrupt your plan for stretching your savings through retirement, especially if you're young and projecting far into the future.
Even if Coast FIRE isn't for you, financial experts say building a strong retirement fund early can create more flexibility later — whether that means working part time, saving less, or simply having more freedom with your time.
"This Coast FIRE is kind of a nice compromise because it does mean that you have to be very intentional about savings. And it does create this target of retiring early," Sterling said. "But at the same time, it's less restrictive and it allows you to live more of your life today."
