Coast FI (also mistakenly referred to as Barista FIRE sometimes) is a way to reach Financial Independence. With this approach, you cut your accumulation phase short, semi-retire, and let your investments compound while you work part-time.
Coast FI is the point at which you have saved enough to get to FI by the time you reach the traditional retirement age without having to make any further contributions to your nest egg. Once you reach this point you can stop saving altogether – as long as you don’t touch your investments.
In our opinion, Coast FI is probably the most exciting milestone on the path to Financial Freedom. Once you reach this point, you have a lot of different options. You could quit your 9 to 5 job and work part-time, you could start your own business. You could take a sabbatical to figure out what to do next. And, most importantly, you can spend more time with the people you love and doing the things you want to do. If you have kids, Coast FI allows you to spend time with them while they are still young. It is a very liberating financial milestone. It gives you the confidence that you will be ok in retirement.
Our own approach to Financial Independence – Flamingo FI – is a version of Coast FI. The difference is that with Coast FI, you are semi-retired until you reach FIRE at your traditional retirement age (which would be 65 for most people), whereas with Flamingo FI, you could reach FIRE after only 10 years of Semi-Retirement.
When you reach this milestone, your retirement is taken care of and you can figure out what you want until you get there. It is the ideal starting point to design the lifestyle you want for yourself and your family.
Coast FI is becoming increasingly popular as a Financial Independence strategy all the time. More and more people are realising how powerful the lifestyle benefits of this approach are. So it is no surprise that the demand for our free Coast FIRE Calculator has been through the roof recently and that I receive reader questions … Read more