Coast FIRE Calculator Canada

What this Coast FIRE calculator does

The calculator finds the amount you need invested today so that compound growth alone carries you to your retirement target, with no further contributions. It reports the Coast FIRE number, how far along you are, how many more years of saving you need to reach it, and what the portfolio is projected to be worth when you stop working.

Everything is in today’s dollars. The nominal return you enter is adjusted for your inflation assumption to give a real return, and the whole projection runs on that, so the retirement spending you type is spending you would recognize now.

The idea behind coasting

Traditional retirement planning treats saving as something you do every year until you stop working. Coast FIRE separates two questions: how much you need invested, and how long you need to keep adding to it.

Compounding does more work the longer it runs, so money invested in your early thirties does a large share of the lifting. Get enough in early and the portfolio reaches the target on its own; after that your salary only has to cover your living costs.

How the number is built

First, the real return: (1 + nominal return) / (1 + inflation) − 1. A 7% nominal return with 2% inflation is a real return of about 4.90%, slightly less than 5%, and over thirty years the difference adds up.

Second, the target: annual retirement spending divided by the withdrawal rate. $50,000 a year at 4% is $1,250,000.

Third, the discount: the target divided by (1 + real return) raised to the number of years until retirement. That is the amount you need invested today for growth alone to close the gap, and it gets smaller the further away retirement is.

A worked example

With the default inputs (age 35, retiring at 65, $50,000 of spending at a 4% withdrawal rate, 7% return and 2% inflation), the target is $1,250,000 and the Coast FIRE number is about $297,442. With $200,000 already invested you are about 67% of the way there. Contributing $800 a month, you reach the coast point after 14 years, at 49, having put in another $134,400. Stop contributing then and the portfolio is projected to reach the target by 65; the projection shown, about $840,501 at 65, is what the current $200,000 alone would grow to, about $409,499 short of the target.

Years of contributions still needed

If you are not there yet, the calculator runs a month-by-month projection. Each month it grows the balance at the monthly equivalent of the real return, adds your contribution, and compares the result with the amount required for the time left.

That requirement rises as retirement approaches, because each month that passes leaves less time for compounding. The answer is the first month your balance overtakes the rising requirement, reported as years of contributions still needed and the age you reach it. If your contributions never catch up before your retirement age, the calculator says you contribute the whole way.

Reading the results

Most people look first at the Coast FIRE number and their progress toward it. Progress above 100% means you are already coasting, and the already-coasting flag confirms it.

Projected value shows where the portfolio lands at your retirement age in today’s dollars, and the surplus or shortfall line compares it with the target. A negative figure shows the size of the gap still to close.

Total contributions until you coast is the cash you still have to find. Comparing it with the gap it closes is a fair test of whether the plan is realistic on your income.

The assumptions that matter most

The withdrawal rate moves the result more than any other input. Going from 4% to 3.5% raises the target by about 14%, and the Coast FIRE number rises with it. For a long retirement, a lower rate is the conservative choice.

The return assumption is next. Coasting depends on growth arriving as expected, and once you have stopped saving you cannot make up a shortfall with extra contributions. A plan that only works at 8% is fragile.

Inflation matters less than people expect, because it applies to both sides of the calculation, but a large error still moves the answer. Two percent is the Bank of Canada’s target, not a promise.

What this leaves out

There is no tax, no CPP, no OAS and no account-type modelling, and a dollar in an RRSP, a TFSA and a taxable account are not worth the same. The projection also assumes one smooth return instead of the run of good and bad years a real portfolio has, which is the risk sequence-of-returns analysis looks at.

Use the tool to size the milestone and see how sensitive it is to your assumptions, then take the number into a fuller plan.

This is an estimate for planning purposes and not financial advice. Investment returns are uncertain and no projection is a promise about what your portfolio will do.

About This Coast FIRE Calculator

Use this Coast FIRE calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.