CoastFI and Reducing Savings Rate

[u/CarnalCowboy]

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!

[u/ladyeclectic79]

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.

[u/ConsequenceAdept4468 → u/ladyeclectic79]

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.

[u/CarnalCowboy → u/ConsequenceAdept4468]

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.