Financial Independence

What Is Coast FI & Why Are We Pursuing It?

January 27, 2022

I find the balance between living for now vs later difficult. Here’s why I think Coast FI is a good compromise!

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I believe a happier life can be achieved through mindful money habits. It's not just about how much money you make; it's about how you use it!


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What is Coast Fi & why are we pursuing it?

Feeling financially secure changes your life. A few years ago when I graduated with no savings, 100k in student loans, and a casual healthcare career with no guaranteed shifts things were ROUGH. I felt like I was on the edge of something terrible, and I cried often. I knew the smallest financial hiccup could ruin me.

For a few years I kept my expenses very low and focused on paying down my debts. I slowly started to feel like I could financially breathe.

In that time I also stumbled across the incredibly popular Mr. Money Mustache blog. It truly changed my life. Discovering the concept of Financial Independence Retire Early (FIRE) was mind blowing. Everyday people were living frugally, saving & investing a massive portion of their incomes, and retiring in their 30s?! Sign me up!! It motivated me to the extreme.

{If you want a full description of FIRE read this. The basic premise is that you find a way to passively cover your living expenses, then you’re free to leave your job! This can be done with real estate, investing, or any manner of things. I was focused on index investing, so that’s the example I’ll use here. I estimated my living expenses in retirement would be ~$40,000 a year. If you use the 4% safe withdrawal rate, I’d require a million dollars invested in order to retire (40,000 / 0.04). To calculate your FI number, read this}.

In that time I also realized that I’d made a mistake and healthcare was not for me. I felt like I a caged animal working an office job. FIRE was buzzing around in my mind however, so I felt like I couldn’t leave. Stick it out for the money!

I found myself madly calculating. If I stayed in that job but worked more hours at it…. when would I be financially independent?! It felt like only then would it be financially responsible to walk away. Realizing it would be double-digit years before I was FI was heart-breaking. I didn’t want to stay in healthcare that long.

My goals had gone too far, and they were trapping me rather than helping me.

Soooo, I quit! Writing the announcement about leaving my career was one of my favourite moments of Money Gremlin thus far!

Ok, enough rambling. Am I financially ruined now? I don’t believe so.

While feeling guilty about “failing” at financial independence, I found the concept of Coast FI.

What is Coast FI?

At it’s simplest form, being Coast FI means having enough invested that you never need to add another penny to it and your investments could grow to your desired number by traditional retirement age.

You no longer NEED to save more money to have a traditional retirement.

You front load your investments, then can let time and compound interest do the rest! It implies you can “coast” to retirement. The heavy lifting has been done!

Coast FI numbers for each individual depends on age, desired retirement age, and financial independence number.

Let’s look at mine!

As previously mentioned, I’m assuming I’ll want at least $40,000 a year in retirement. Therefore, my financial independence number is $1,000,000 if I plan on using the 4% safe withdrawal rate (40,000/ 0.04 = 1,000,000).

I’m just about 33 years old. So, how much do I currently need to have invested for it to compound to $1,000,000 by traditional retirement if I stop adding to it?

Assuming a 7% average inflation adjusted rate of return and leaving my investments untouched for 32 years (IE until I’m 65), how much do I need to have right now?



I was too!

Compound interest is an incredible friend. The longer you’re friends, the better it gets.

Am I Coast Fi?

I do not currently have $115,000 invested, so no, I’m not Coast Fi.

I DO have ~ $105,000 though. How much would I need to invest monthly to reach Coast FI by my 34th birthday instead? Let’s figure that out!

I’d need a total of ~$123,000 invested by my 34th bday. (Curious how I’m getting these numbers? I use this Coast FI calculator from WalletBurst)

What is coast fi
  • Save

Reaching $123,000 in a year from where I am now would require an additional $838 contribution monthly (and 7% inflation adjusted growth).

(Use this amazing investment calculator for your numbers).

What is coast fi and why are we pursuing it
  • Save

I’m currently investing more than $838 a month, so I’m on track to be Coast FI by my 34th birthday!

Your age and years until retirement have a large impact on your Coast FI number.

If we assume that each person wants to retire at 65 with $1,000,000 what’s the difference in their Coast FI numbers?

A 20 year old would need to have ~$48,000 invested. That’s right… for less than the price of some new vehicles you could have your entire retirement funded if you start early enough!

Ahh, to be that young again.

A 30 year old needs ~$94,000.

40? You’d need ~$184,000.

A 50 year old needs ~$362,000.

What about a 60 year old? They would need $713,000.

The numbers increase SO dramatically with age because there’s significantly less time for compound interest to grow your money for you. The later you start, the more of the work you need to do yourself.

Why do I find Coast FI appealing?

I’ve spent a few years being hyper-focused on paying down debt, living frugally, and investing money. I’m glad that I did! It did involve saying no to myself often however.

There are things I want to do in my life that do not “make financial sense”.

Travel is a massive one.

I’ve forever dreamt of seeing the world. I love hiking, climbing, and biking and want to do those activities in many countries. Yet I have not let myself in the name of financial responsibility.

There’s something empowering and beautiful about having financial knowledge. I’m grateful for stumbling across the Mr. Money Mustache blog years ago.

The downside of financial knowledge however is that you can take it to the extreme and withhold joy now for improved financial status “later”.

I’ve noticed that in myself. I often feel guilty even thinking about making “poor” financial choices such as travel.

Yet travel matters to me a lot, and I would regret not travelling if I was on my death bed.

I also stayed for a long time in a career un-suited for me in the name of financial progress.

There needs to be a balance in life between now & later. If I’m honest, I struggle with balance in almost every respect.

Yet, Coast FI feels like a nice balance to me. I will have taken care of “Old me” by setting her up for a comfortable retirement. That’s responsible, and an incredible gift to my future self.

Afterwards, I’m going to focus on travel & the here-and-now for awhile. Adventure is a core part of me, and that deserves opportunities too.

Coast FI opens up a lot of options.

I’m alllllll about having options in life.

You still need to cover your living expenses once your Coast FI, but that’s it. That creates a lot of fun possibilities!

Perhaps you’ll want to slow to part time work.

Or start a business.

Maybe you’ll want to save up some extra money and take a year off to travel!

Without the pressure of feeling irresponsible, there’s a lot more flexibility in life.

The other option is that you can continue living exactly how you have been! You don’t HAVE to stop investing once you reach Coast FI. If you’re enjoying your life, continue with the status quo, keep investing, and you can retire even earlier! I doubt we’ll stop investing entirely ourselves.

Coast FI feels like an important stop on the journey to full Financial Independence. It’s a good time to slow down, reassess if you’re happy with how you’re living, and have the freedom to consider large changes.

I’m incredibly excited to reach Coast FI myself 🙂

Thanks for following along with my journey!

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  1. Good luck on your journey. Looks like you are on the right track!

    • Money Gremlin says:

      Thank you so much! Just checked out your site and congrats to you too!! You’re basically living my dream ahaha. One day 🙂

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