What is the difference between Coast FIRE and Traditional FIRE?
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Traditional FIRE (Financial Independence, Retire Early) requires reaching a savings goal that allows you to fully retire and live off your investments. Coast FIRE is a more flexible approach where you reach a point where your existing savings can grow to your full retirement goal without needing to continue aggressive saving, giving you more flexibility in your work choices while still on track for retirement.
What is a safe withdrawal rate?
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A safe withdrawal rate is the percentage of your investment portfolio you can withdraw annually in retirement without significantly depleting your savings. The 4% rule is a common guideline, suggesting you can withdraw 4% of your portfolio value in the first year of retirement and adjust for inflation in subsequent years with minimal risk of running out of money over a 30-year retirement.
Can I stop saving entirely once I reach Coast FIRE?
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While technically you could stop saving once you reach your Coast FIRE number, many people choose to continue saving at a reduced rate as a buffer against unexpected events like market downturns, changes in life circumstances, or higher-than-expected expenses. The calculator assumes you'll stop all retirement savings once you reach Coast FIRE, but you can adjust this strategy based on your comfort level.
How accurate are the investment return projections?
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The projections are based on average historical returns and are not guaranteed. Actual returns will vary from year to year. It's important to regularly review and adjust your financial plan as market conditions and personal circumstances change.
What factors can affect my Coast FIRE timeline?
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Several factors can impact your Coast FIRE timeline including investment returns, inflation, savings rate, changes in income, unexpected expenses, and lifestyle changes. Regularly updating your financial plan and being flexible in your approach can help you stay on track despite these variables.