What is Traditional FIRE?
Traditional FIRE is what most people imagine when they first hear about the movement. The idea is simple: save and invest aggressively until you can fully cover your living expenses for life, then retire early. This often means saving 50–70% of your income and investing in growth assets. The target is usually based on the 4% rule, which suggests you can withdraw 4% annually without running out of money.
Example: If your annual expenses are $40,000, you’d aim for a portfolio of about $1 million before you retire fully.
What is Coast FIRE?
Coast FIRE is a more flexible approach. You save enough early so your investments will grow to your retirement goal without further contributions. After that, you only need to earn enough to cover current expenses, letting your portfolio “coast” to the finish line.
Example: If you’re 30 and want $1 million by 60, you might invest $250,000 now and let compound growth do the rest.
Key Differences
| Aspect | Traditional FIRE | Coast FIRE |
|---|---|---|
| Savings Phase | Long, high savings rate | Shorter, intense early savings |
| Work After Goal | No work needed | Work to cover current expenses |
| Lifestyle Impact | May require extreme frugality | More flexibility after initial phase |
| Risk Profile | Possible burnout during savings years | Depends on future market performance |
Which One is Right for You?
If you want to stop working completely as soon as possible, Traditional FIRE may be for you. If you prefer a balanced lifestyle and are okay with working to cover expenses while your investments grow, Coast FIRE could be the better fit.
The Common Ground
Both approaches rely on living below your means, consistent investing, and letting compounding do its magic. The best choice is the one that fits your values and lifestyle.
Try our Coast FIRE Calculator to see your numbers.