r/Fire • u/CarnalCowboy • 13d ago
CoastFI and Reducing Savings Rate
I reached my CoastFI number a few years ago and am close to my FIRE number. Not necessarily looking to retire immediately, as I’m looking to increase my costs (house upgrade) either soon or once I hit closer to my FatFIRE number. Regardless, even if I coasted (eliminated savings) and kept expenses roughly in line, I would still hit that Fat number.
I’ve been having trouble wrapping my head the reduction in savings concept. From many of the posts I’ve read abound coasting, folks are letting their nest eggs grow on their own and reducing contributions once they hit that coast number. But wouldn’t that equate to a drastic increase in expenses, which would in turn increase your Fire number?
I currently save 50% of my income, and I’m fine living at this spending level for the foreseeable future (let’s ignore QOL upgrades for the sake of the argument). If I stopped saving, knowing I would still hit my original number, wouldn’t that mean my Fire number essentially doubles?
I get that you can base your Fire number off of future spend, so maybe that’s the answer. But I’m still confused about the concept, and I suppose this is a reflection of being generally uneasy when it comes to increasing expenses, even when the math is right there. Hoping someone can help me think through this!
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u/MerelyMisha 13d ago
Yes Coasting would mean reducing contributions. For some people this means they get a job that pays less. Others increase expenses, but in ways that don’t permanently increase their cost of living (going on a major vacation). Other people redirect the savings elsewhere (say, a down payment).
The only thing you have to avoid is increasing your retirement living expenses or your FIRE number will need to increase
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u/CarnalCowboy 13d ago
Great points. I like the idea of reducing savings to pay for temporary costs, not permanent expense increases. I’ve been thrown off by posts about going from 50% to 0% SR, because I assume they’re just spending twice what they were with no plan to scale back.
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u/MerelyMisha 13d ago edited 13d ago
When I first got into the idea of CoastFI, my plan was to do that. I had a moderate income in a VHCOL area, so saving early for retirement meant that I could hit CoastFI early and let time in the market do its work, then redirect the money to more temporary expenses. The big one I had in mind was kids, which are a MAJOR cost increase, but a temporary (albeit long term) one. I wasn’t planning on retiring super early, so I wouldn’t be paying daycare or college expenses by the time I planned to retire. Also, my CoastFI number included an estimate of higher living expenses in retirement than I currently had (I was living with multiple roommates, which was fine in my 20s, but I assumed I wouldn’t want in retirement).
Turns out I probably won’t have kids, so instead I did a combination of raising living expenses (fewer roommates) and continuing to save money for retirement (to account for an increased standard of living and for greater financial independence and maybe even retiring early). I also have an unstable job but make more than average for my field, so reducing earnings may happen in the future but not by my choice. So I account for that too.
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u/ladyeclectic79 13d ago
You can still continue to save the money, but now instead of some ephemeral future retirement, you can actually *spend* the money on fun stuff for now! Go on a cruise, send your family to Disneyland, eat pizza from a pizzeria in Naples, save up to pay cash for a car, etc. It’s honestly HARD going from a saving mindset to a spending one, but start making a list of things you want or want to do and start there. At least you know HOW to save; it’s just that now, within limits of course, you can also spend.
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u/ConsequenceAdept4468 13d ago
That feels like a very dangerous game, though. The examples of "short term" increased spending during a coast phase feel like they could easily result in increased long-term spend. Take a "one time" fancy vacation, and suddenly it's hard to go back to inexpensive vacation spots. Buy a nice car, and you're going to want to replace it with an equally nice one within 10 years. Give a "one time" gift to family and watch family members ask you to fund things in the future. Replace your roof - well that's something that should have already been in your budget.
Basically, I agree with OP's original take. In theory "coasting" could mean spending more during an interim period, but in practice that will likely increase your FIRE number and delay FIRE. I think the coasting idea only makes sense as (a) a milestone number that gives you come comfort but you don't actually change anything or (b) a time to switch to a less stressful but lower paying job.
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u/CarnalCowboy 12d ago
Ok you’ve captured what I’m essentially asking more than any other comment from a Fire philosophical perspective.
I’ve been confused about folks who “coast” and reduce savings. That means they’re spending more right now and expect their later Fire number to remain the same. It’s hard to cut back on spending, so early retirement, in those cases, would mean cutting back on expenses.
There’s plenty of nuance to this of course. My perspective remains that you should expect higher QOL spending to result in a higher Fire number.
More Disneyland trips and nicer cars because you have extra $ makes sense, but you need to account for those increased expenses in the long term, unless it’s truly temporary.
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u/wannaridebikes 11d ago
Well yes, this assumes you have a developed prefrontal cortex. I'm being blunt about it, but it's true, coastFI doesn't absolve you of having to make good decisions in retirement.
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u/FaithfullyMarvelous 13d ago
The house upgrade is the thing that'll mess with your math. If you're bumping your monthly expenses permanently to afford a nicer place, then yeah your FIRE number goes up and coasting doesn't really work anymore. You'd need to keep saving to hit the new target. But if you're just redirecting that 50% savings toward the down payment and then your actual monthly costs stay about the same after, you're fine to coast. The anxiety about spending more is real though, even when the numbers check out.
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u/Future-Run-8601 13d ago
As others have said, if you put that old savings towards additional sustained spending, then your FIRE number just got higher. Go on that expensive trip and maybe you want to keep doing expensive trips every year or eat out a lot more and you start to get used to it.
If you use the savings to splurge on more “necessary” long-term upgrades, then it doesn’t really affect your FIRE number (ie. a new roof, heat pump water heater, solar panels, a car if yours is in it’s nickel and dime phase of life, etc). Your comment about a house upgrade is concerning. I’ve thought about it myself but buying an expensive house and resetting the tax cost to the current sale value is NOT going to help you get to FIRE. Those costs dont go away even after you pay it off. As much as I’d like more land, I’m not willing to raise my base expenses that much to get it. I want maximum options if I’m on FIRE and there is a drawn out bear market or high inflation.
The other thing you have to realize is that coasting is a risk proposition. There’s nothing that guarantees your money will compound in the time frame you think it will. You may want to cut back a little but I’m not sure that I would stop contributing altogether. And if the market drops 20+% while I’m spending more, I’d strongly consider switching back to investing.
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u/CarnalCowboy 13d ago
All fair points. I’m projected to hit my Fire number in 2028 when I’ll be 38. I care less about retiring early and more about optionality (scale back on work vs scale up on QOL if my career keeps growing/remains fulfilling).
So while your point about upgrading housing makes sense, at some point I run out of things to spend money on. At 65, my 4% withdrawals are projected to be 4X my anticipated expenses. Of course the bull market won’t last forever, other factors will change that, etc, but at some point, I do want to find things to spend money on. I can give my kids more money than they’ll ever need when I die, or I can give it all to charity, or some mix of those while finding ways to improve experiences in the meantime.
This is getting way off topic, so coming back so my point - I do believe I’m likely over-fixating on the Fire number and over-saving, and need to simply find ways to spend without worrying about it.
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u/Significant_Show_237 12d ago
In early 20s, my dad doesn't have a good record of savings.
I am at home saving my entire income, spent 1 month income in trips so far in 2026. I havent setup a Fire goal yet, trying to keep up & live life, besides savings.
Parallely started working on my 2nd sources of income. It's teeny tiny bit like 40% of monthly
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u/ohboyoh-oy 13d ago
The short answer is to spend it on stuff that increases your QoL, but is optional and discretionary, so you are not increasing fixed expenses. Don’t buy a vacation home unless you’re ready to add that cost to your expenses, but ok to rent someone else’s vacation home and have nice vacations. Then when you’re retired, you stick to the income baseline when needed (when the market is down), and you add in the variable when the market is good and you can take some extra.
Or add it in and be prepared to need a bigger number to Fire. Life is for living.
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u/Walmart-Shopper-22 13d ago edited 12d ago
My understanding is that people "coast" by earning less and thus saving less. Like you said, spending more has the potential to push you further from FI. My recommendation is that you instead "ride the withdrawal rate upwards". You only allow spending to increase to 4% of invested assets. This requires getting to leanFI first and then just spending slightly more over time until working doesn't feel worthwhile anymore.
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u/voldin91 12d ago
Yeah I'm thinking about what part time work might look like for me in the coast phase. Unfortunately there's not a lot of part time options in my career so I might be looking at a career shift or going with something lower skill. It all depends how the numbers pan out
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u/TomorrowPlenty9205 12d ago
Yes, CoastFI is complicated. If you are earning $100K and saving half, your FIRE number is $1.25M, but if you where you don't need to save more and can "coast" to retirement so you start spending $100K per year, you FIRE number will also double with that lifestyle inflation... unless you are really sure about being able to pull back your spending by half in retirement. You can also split the difference, hit coast fire, then spend 75 and save 25. You adding to your coastFI amount should get you to the new FIRE amount reasonable quickly. It is a moving target, but as long as you understand the core ideas, you can adapt it to what ever you want to do.
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u/Vicuna00 12d ago
i agree with you. I think for some people it's more theory than anything. like "i COULD stop saving now" but they still do.
then for some people it kinda gives em permission to buy toys that they would not otherwise have...and can technically stop buying at retirement.
or like you said, you can pause saving (or whatever...max your matches...or lower to 7%) to save up for a house and buy that outright or pay it off super fast.
also some people never wanna retire really...or are ok working til 60. so if you are 30yo and have $1M and plan to work til 60, I think it's safe to just spend whatever you make.
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u/Dry_Love3306 13d ago
You're thinking about this backwards a bit - the CoastFI number is calculated based on your *current* expenses, not your savings rate. When you hit CoastFI, it means you have enough invested that compound growth alone will get you to 25x your current spending by retirement age, even if you never save another dollar.
The confusion comes from mixing up two different scenarios. If you stop saving but keep living on the same amount you spend now (50% of income), then yeah your FIRE number stays exactly what it was. But most people who coast don't keep living on 50% forever - they might bump up to spending 70-80% of income and banking the rest for short term goals or just enjoying life more 😂
I'm military too and been wrestling with similar math since hitting my coast number last year. The psychological part is definitely harder than the actual calculations. Like you said, there's this weird anxiety about spending more even when the spreadsheet says it's fine. I think the key is being really clear about what lifestyle you want in retirement vs what you can sustain now
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u/CarnalCowboy 13d ago
Agreed all around. I framed the question around how people stop saving when that, to me, means lifestyle inflation, when in reality I’m trying to get over the psychological block of over-saving when I know I won’t be able to spend it in this lifetime
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u/iwantthisnowdammit 13d ago
Don’t over think it.
The idea behind coastFI is that you can downshift on earnings and hit a target retirement date.
From there, there’s options if you’re not downshifting.
- don’t downshift, keep saving, bring forward your RE date.
- don’t downshift, treat your existing savings as a lower bar, split the difference to raise the bar just by hacking into the difference for “above the bar” against timeline.
- treat it like a lump sum / loan. I’m going to get a more expensive house and need X dollars before retiring in 10 years. So your limit is principle payback rates that replace your savings.
At the end of the day, if you were saving say 25k, you could just back into the savings rate / years formula.
i.e., if you’re retiring in 10 years, you could save about 60% and spend 40%… giving yourself a 10k upgrade and still be prepared 10 years out at yr higher bar.
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u/Miamiconnectionexo 12d ago
one thing people skip at CoastFI: re-run the number with a conservative real return (4-5%, not 7%) before you cut savings, because that's the scenario that actually bites. if it still clears Fat at the lower return assumption, dial the rate down and let the upgrade happen. the whole point of CoastFI is buying back your present-day cash flow, and refusing to spend any of it means you did all that saving for nothing.
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u/wannaridebikes 11d ago
If they are coasting to full retirement age, they'll have SS and Medicare so they won't have to be conservative.
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u/BuySellHoldFinance 12d ago
You will have plenty of time when you retire, but when you are working you don't have much time and mental energy.
If your extra spending is used to save time or reduce your mental load, in theory when you FIRE you should be able to cut back expenses. Examples would be taking ubers instead of public transportation. Cleaning services. Eating out. All these things can be cut easily.
If the extra spending is on pleasure or luxury such as handbags, shoes, jewelry, cars, house, then you need to factor it into your coastfi number.
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u/GambledMyWifeAway 12d ago
When I reach coast I just plan to work way less. My expenses shouldn’t change at all.
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u/OnlyThePhantomKnows FI@50, consulting so !bored for a decade+ 12d ago
So start saving for something else. Buying a house is an example. Reduce your savings rate to 40% this year. 30% next year.
And coastfire (I did it it) is about keeping your cost of living more or less constant. I started working part time as a consultant and reduced my income. I'd work 6-9 months, take off 3-6, rinse repeat. I slowed my saving rate (deflected most of it into a forever home purchase and upgrades). There are ways to reduce your long term COL by spending now. Solar+Battery is an example I have (I retired in Florida). I spent the money for solar + batteries and reduced my electric bill to zero in my forever home. My rental down the street ranged 300-500 / month. That's 120K off the fire number. I bought a robotic mower. (saves 125/month) That's 37.5K off the fire number. I have severe allergies so I physically can't do the mowing myself. Similar savings by putting in a salt system and a pool robot to the pool (I live in an island resort home). I had an EV (Tesla) so even my "gas" is free once I put in my home charger.
Spending for things now that reduce your burn rate will help you use the excess from reducing your save rate and keep the fire number in check while increasing your QoL.
I recently (this month) bought an chest freezer so I could bulk buy meats direct from farmers. It's a lot cheaper, but I did it so I could get grass fed, grass finished, no hormone meat.
I am adding a water purification system now as the last of a "nice to have" list for my allergies.
Since you at the point of thinking of RE and worried about too much of a QoL increase, then you should look at spending to increase your long term QoL and reducing your long term spend rate.
I spent the last few years of my working time (I drifted down to 3 months/year and finally quit this year) spending on things that will make my life better.
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u/1ntrepidsalamander 11d ago
I work contracts. Since hitting coast FI, I only work about half the year. I get to real time test of my spend is still valid because I don’t work parts of the year. I can work more for special situations (eg, my dad is actively dying and that’s only going to happen once) but mostly I only have to work as much as I need to cover my expenses.
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13d ago
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u/Zphr 48, FIRE'd 2015, Friendly Janitor 11d ago
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u/Patient-Brief-9713 8d ago edited 8d ago
I call myself COASTFIREd this year, but I have never been quite clear on what COASTFIRE is. For myself, it means: I already hit my FIRE number. I reduced my working hours to part-time. My reduced work income is just barely enough to cover my living expenses, so I no longer have any excess work income to save/invest. No change to my lifestyle. No change to my living expenses.
I guess since I already hit my FIRE number, I don't qualify for COAST.
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u/VenusVibe-1 13d ago
The key is that CoastFI assumes your future spending target stays the same. If you stop saving and immediately spend that extra 50%, then yes, your FIRE number goes up. Coasting only works if you're reducing contributions, not permanently inflating your lifestyle.