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USA Today
5 days ago
- Business
- USA Today
Why Coast FIRE may be a safer retirement strategy than early retirement
If you dig around long enough on the internet, you're apt to come across stories of people who embraced the Financial Independence, Retire Early (FIRE) movement and exited the workforce at remarkably young ages. FIRE encourages people to hustle and save aggressively early in their working years so that they can ditch their careers when they're fairly young. But there are some big problems with the FIRE movement. Not only does it often require a lot of sacrifice, but it could also potentially put you at risk of burnout. Also, there are financial risks. Even if you accumulate a lot of money, retiring at 38 or 42 or even 50 means your savings have to last a really long time. A few million dollars could easily run out if your expenses rise at a faster rate than the returns your portfolio generates. It's for these reasons that an alternative approach to retirement may be more ideal for you — Coast FIRE. With Coast FIRE, you don't retire early so much as build up a lot of savings early on so you can coast through a good chunk of your career. The logic is that if you fund your savings enough by a certain age and then invest that money wisely, you can potentially reach a point where you can stop saving and take an easy job that's just enough to pay your bills until you retire at a fairly traditional age. Here's what that might look like. Say you're 45 with $1.5 million socked away in your individual retirement account (IRA) or 401(k) plan. If your portfolio generates an annual 7% return, which is a few notches below the stock market's average, and you leave it alone until age 62, you could be sitting on about $4.7 million at that point. In light of that, you may decide that starting at 45, you're going to abandon your stressful, high-paying job and take any old job that covers your yearly bills. That way, even if you can't contribute to your retirement savings further, you'll still be OK. It's not a bad approach to retirement savings at all. But it's also important to know when you've saved enough and to recognize the pitfalls of this strategy. Make sure you have a handle on your portfolio and income needs Coasting until retirement is a reasonable compromise for people who are burned out at work and feel they need a break. It's a risky thing to retire in your 40s, at which point your savings may need to last another 50 years. Retiring in your 60s is a less risky option, as your savings may only need to last 30 years at that point. But there's absolutely nothing wrong with making your life easier during that gap between your 40s and 60s, or whenever you reach the point of burnout. The key is to make sure you're truly in a strong enough place to stop saving. One way to know is to estimate your future expenses. And that means being honest about the lifestyle you'll be happy with. A lot of people tell themselves they'll be content to downsize in retirement and spend minimally, only to realize that's not such a fun adjustment. Think about what a realistic lifestyle will cost you and build in some margin for error — for example, if healthcare expenses rise at a faster pace than projected or Social Security benefits do end up undergoing substantial cuts, leaving you with less monthly income. Another important thing to do is to assess your portfolio. If you're going to stop saving for retirement at a fairly young age, you need to make sure your assets are on the aggressive side. This doesn't mean you have to take on loads of risk. A portfolio that largely consists of S&P 500 index funds, for example, may be more than reasonable. However, you don't want to invest too conservatively if you're going to reach a certain point in your savings journey when you say enough is enough. Any money you save today to live on in the future needs to grow at a faster rate than inflation. Think about what you're giving up Another thing to consider is that if you stop funding your IRA or 401(k) plan at a fairly young age, you may be giving up a significant tax break. This especially holds true if you're someone who has been maxing out a 401(k). Also, 401(k)s commonly offer the benefit of an employer match. If yours is generous, that's free money you shouldn't be so quick to say no to. In that scenario, it may be reasonable to fund your 401(k) only to the point of your workplace match to avoid having to forgo your employer contribution. If you're midway through your career, or at another point where you're still a good number of years away from a traditional retirement age, and you're happy with your nest egg thus far, you may be ready to call it quits on the savings front and coast the rest of the way through. That's perfectly OK, provided you've run the numbers. And it may be an optimal compromise that allows you to build up nice savings for retirement without having to spend the next decade or more grinding away when you've had enough. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. The $23,760 Social Security bonus most retirees completely overlook Offer from the Motley Fool: If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets"could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. JoinStock Advisorto learn more about these strategies. 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Yahoo
14-06-2025
- Business
- Yahoo
A YOLO stock trade and a frugal lifestyle: One millennial's unorthodox — and risky — path to being done with retirement saving by 35
Corey Forsythe achieved financial independence in January and finished saving for retirement at age 35. Forsythe prioritized living a frugal lifestyle to maximize his investable income. He grew his initial nest egg with a risky investment in a satellite company. In January, 35-year-old Corey Forsythe stopped making automatic monthly contributions to his retirement account. After eight years of saving and investing, he said he hit $1.125 million across his investments in index funds, stocks, and a 401(k) retirement account. By his calculation, it was enough to fund $120,000 a year in retirement starting at age 60. Forsythe, a pharmacist, has reached Coast FIRE, a subcategory of the FIRE (Financial Independence, Retire Early) movement, meaning that he's saved enough for retirement and can now let his investments grow on their own while he focuses solely on covering his other expenses. "Coast FIRE always reminded me of when, in pharmacy school, I would try as hard as I could at the beginning of the semester so that by the time the final exam came around, I only needed to get above a 20% or 30% on the test," Forsythe said. "That's how I view Coast FIRE, try really hard and invest as much as possible so that later on you can coast and enjoy your life while you're still young enough to." At the beginning of his Coast FIRE journey, Forsythe aimed to invest $500,000 of his earned income relatively early in his career, which he broke down into a 70/20/10 split. He would allocate 70% of that $500,000 to a mutual fund tracking the broader stock market, 20% of it to an individual stock pick, and keep the remaining 10% in a cash emergency fund. After reaching his $1.125 million Coast FIRE goal in January, Forsythe has been putting his extra money into a savings account to build up his cash reserves. His total holdings across accounts have grown to surpass $2 million, documents viewed by Business Insider showed. While Forsythe certainly followed conventional Coast FIRE tactics such as living frugally and investing regularly, a key part of his success can be attributed to a single so-called YOLO bet — defined as an aggressive, high-risk strategy where an investor dedicates a large chunk of their portfolio to a single trade. Forsythe made his YOLO bet on AST SpaceMobile (ASTS), which he first came across on the Reddit forum r/WallStreetBets in 2022. The stock has a niche following on Reddit and X, dubbed the "SpaceMob", which Forsythe has been monitoring along with company news and earnings reports over the last few years. Combining insights from the online community and his own research, Forythe said he built the confidence to buy 35,000 shares of the stock at $2.88 apiece in 2024. It amounted to a roughly $100,000 wager on ASTS at a time when sentiment was overwhelmingly bearish. The stock is now trading around $39, bringing Forsythe's ASTS holding to more than $1.2 million — and he says he hasn't sold any yet. He acknowledges the investment was a massive risk — and that other people shouldn't treat his good fortune as a replicable model — but it did work out well for him. Another unconventional strategy Forsythe employed was not prioritizing paying down his student-loan debt right away. "I have a lot of friends who are still trying to pay off their loans as fast as possible, even going as far as still living at home," Forsythe told BI. "After paying them off, their net worth was zero." To Forsythe, it didn't make sense to forgo stock-market returns to pay off his loans faster, particularly when early investing years are key to harnessing the power of compounding. Forsythe's strategy has been to pay off the minimum required balance while still prioritizing investing in the stock market. He's enrolled in the Pay As You Earn repayment plan, which requires him to pay 10% of his discretionary income monthly, which comes out to around $950. After 20 years of qualifying payments, his remaining student loans will be forgiven. Coast FIRE wasn't just the product of a risky, well-timed stock bet. Forsythe lived extremely frugally after graduating from pharmacy school. "I kept living like a college student," Forsythe said. "Keeping fixed costs under control is, in my opinion, one of the most underrated FIRE tools." Being a single person with a six-figure pharmacist income definitely made budgeting more straightforward for Forsythe. His monthly budget hovered around $3,000. Other than student loan repayments, Forsythe's biggest monthly expense was his $750 mortgage payment; he had snagged a 625-square-foot condo during the pandemic and locked in a low mortgage rate. Forsythe credits his low housing costs as one of the biggest factors that allowed him to invest aggressively in his brokerage account tracking the stock market. During his high-saving years, he invested between $42,000 to $50,000 annually. "All of the money that I'm earning now, I can just put away, use for travel, go to concerts. I've started to live life a lot more instead of being frugal my whole life," Forsythe said. "It's allowed me to have less stress at work because all I need to do is cover my living expenses." Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
14-06-2025
- Business
- Business Insider
A YOLO stock trade and a frugal lifestyle: One millennial's unorthodox — and risky — path to being done with retirement saving by 35
In January, 35-year-old Corey Forsythe stopped making automatic monthly contributions to his retirement account. After eight years of saving and investing, he said he hit $1.125 million across his investments in index funds, stocks, and a 401(k) retirement account. By his calculation, it was enough to fund $120,000 a year in retirement starting at age 60. Forsythe, a pharmacist, has reached Coast FIRE, a subcategory of the FIRE (Financial Independence, Retire Early) movement, meaning that he's saved enough for retirement and can now let his investments grow on their own while he focuses solely on covering his other expenses. " Coast FIRE always reminded me of when, in pharmacy school, I would try as hard as I could at the beginning of the semester so that by the time the final exam came around, I only needed to get above a 20% or 30% on the test," Forsythe said. "That's how I view Coast FIRE, try really hard and invest as much as possible so that later on you can coast and enjoy your life while you're still young enough to." At the beginning of his Coast FIRE journey, Forsythe aimed to invest $500,000 of his earned income relatively early in his career, which he broke down into a 70/20/10 split. He would allocate 70% of that $500,000 to a mutual fund tracking the broader stock market, 20% of it to an individual stock pick, and keep the remaining 10% in a cash emergency fund. After reaching his $1.125 million Coast FIRE goal in January, Forsythe has been putting his extra money into a savings account to build up his cash reserves. His total holdings across accounts have grown to surpass $2 million, documents viewed by Business Insider showed. A YOLO stock bet While Forsythe certainly followed conventional Coast FIRE tactics such as living frugally and investing regularly, a key part of his success can be attributed to a single so-called YOLO bet — defined as an aggressive, high-risk strategy where an investor dedicates a large chunk of their portfolio to a single trade. Forsythe made his YOLO bet on AST SpaceMobile (ASTS), which he first came across on the Reddit forum r/WallStreetBets in 2022. The stock has a niche following on Reddit and X, dubbed the " SpaceMob", which Forsythe has been monitoring along with company news and earnings reports over the last few years. Combining insights from the online community and his own research, Forythe said he built the confidence to buy 35,000 shares of the stock at $2.88 apiece in 2024. It amounted to a roughly $100,000 wager on ASTS at a time when sentiment was overwhelmingly bearish. The stock is now trading around $39, bringing Forsythe's ASTS holding to more than $1.2 million — and he says he hasn't sold any yet. He acknowledges the investment was a massive risk — and that other people shouldn't treat his good fortune as a replicable model — but it did work out well for him. Balancing student loan repayments and investing student-loan debt right away. "I have a lot of friends who are still trying to pay off their loans as fast as possible, even going as far as still living at home," Forsythe told BI. "After paying them off, their net worth was zero." To Forsythe, it didn't make sense to forgo stock-market returns to pay off his loans faster, particularly when early investing years are key to harnessing the power of compounding. Forsythe's strategy has been to pay off the minimum required balance while still prioritizing investing in the stock market. He's enrolled in the Pay As You Earn repayment plan, which requires him to pay 10% of his discretionary income monthly, which comes out to around $950. After 20 years of qualifying payments, his remaining student loans will be forgiven. Frugal living Coast FIRE wasn't just the product of a risky, well-timed stock bet. Forsythe lived extremely frugally after graduating from pharmacy school. "I kept living like a college student," Forsythe said. "Keeping fixed costs under control is, in my opinion, one of the most underrated FIRE tools." Being a single person with a six-figure pharmacist income definitely made budgeting more straightforward for Forsythe. His monthly budget hovered around $3,000. Other than student loan repayments, Forsythe's biggest monthly expense was his $750 mortgage payment; he had snagged a 625-square-foot condo during the pandemic and locked in a low mortgage rate. Forsythe credits his low housing costs as one of the biggest factors that allowed him to invest aggressively in his brokerage account tracking the stock market. During his high-saving years, he invested between $42,000 to $50,000 annually. "All of the money that I'm earning now, I can just put away, use for travel, go to concerts. I've started to live life a lot more instead of being frugal my whole life," Forsythe said. "It's allowed me to have less stress at work because all I need to do is cover my living expenses."
Mint
04-05-2025
- Business
- Mint
Money tips and tricks from people who want to retire early
The FIRE movement can be a life-changer even for those who don't plan to retire early. Rasheeda Creighton, of Richmond, Va., discovered FIRE—Financial Independence, Retire Early—at a time when she needed it: She was going through a divorce, had a toddler, and didn't know how far her retirement savings would take her. At 40, she was already at retirement age for some FIRE participants. But Creighton says there were still aspects of the movement that resonated with her: investing aggressively in index funds outside of your retirement funds, and carefully calculating exactly how much you would need to say goodbye to work forever, for instance. Creighton says there are a lot of aspects of FIRE's frugality she ignores. (She isn't going to change her car insurance regularly in hopes of snagging a lower-cost plan—an example she says she saw in one of her FIRE Facebook groups). But now at 47 and five years into running her own consulting business and a nonprofit, she says she is living a life she wouldn't have if the FIRE community hadn't given her the confidence to leave her corporate job in financial services. 'It gave me a level of comfort and peace that I wouldn't have otherwise had," says Creighton. The FIRE movement took off in the early 2000s and has garnered a community of extreme savers—so extreme, some save 50% to 70% of their income to be able to retire decades before age 65. Eating a diet of rice and beans became a common reference for the movement. For most people, that type of saving and investing has been deemed unrealistic . But FIRE has evolved, introducing approaches that don't require full retirement before 65. Melissa Caro, a 53-year-old financial planner based in New York City, says she has been saving aggressively since she was 24 years old. The 'retire early" part of FIRE doesn't necessarily mean she's going to give up her work. 'Retirement for me doesn't mean doing nothing," she says. 'It just means there's a time when I won't think about making money at all." The FIRE movement has grown to make room for not only people who don't want to work beyond a certain age, but also people who simply don't want to have to work. There's Barista FIRE, which entails saving enough to leave a corporate job for a more relaxed, part-time one; and Cashflow FIRE, which involves generating enough money through passive income and side gigs to cover the cost of your current lifestyle. There's also Coast FIRE for those who have enough invested that will eventually grow to cover their retirement, but still tend to work so they can 'coast" into retirement. Another lesson from FIRE is strategically using different types of accounts to create tax diversification, says Bryan Hasling, financial planner at Modern Financial Planning. 'People have traditionally used their employer's retirement plan as the main thing that they're going to use for retirement…it says the word 'retirement account' so people think that that's the only thing that you can use for retirement," Hasling says. But he has found that the people who are able to retire early are those who have maxed out workplace retirement accounts and have significant savings in taxable brokerage accounts and Roth individual retirement accounts (IRAs), which allow you to withdraw contributions before age 59 ½ without penalty. It is also important to remember what the FIRE movement might get wrong. Monica Dwyer, a senior vice president and wealth advisor at Harvest Financial Advisors, attended a FIRE conference in Cincinnati in 2020. She said other attendees kept asking her what her 'number" was, which is the total amount of money you need to save and invest to achieve financial independence and retire early. It is typically calculated by multiplying your projected annual expenses by 25. Dwyer says the concept doesn't make sense to her, since it doesn't take into consideration that different types of expenses, such as healthcare, inflate at a higher rate. There are other aspects of the FIRE movement that won't make sense for everyone, but it also isn't a strategy that should be written off as an approach just for minimalists who are willing to cut spending. 'I firmly believe in enjoying life," Creighton says. Now she has more tools to build a budget around the life she wants to live today and later. 'That is the gift that FIRE gave me."
Yahoo
23-04-2025
- Business
- Yahoo
I'm retiring in my 30s and will still be a millionaire by 60. Here's how I'm using Coast FIRE to achieve my goal.
Elena Kodama plans to quit her software engineering job for a Coast FIRE lifestyle. Coast FIRE allows part-time work and financial independence through strategic savings. Kodama's reselling business and YouTube channel generate income to support her retirement plan. This as-told-to essay is based on a conversation with Elena Kodama, a 31-year-old software engineer in Cambridge, Massachusetts. It has been edited for length and clarity. I started my career in 2017 as a contractor and software engineer. I recently decided, at age 31, to soon quit my six-figure job as a software engineer to pursue a Coast FIRE lifestyle and spend more time with my family. I'm married and have two children. Saving aggressively in my 20s is what will allow me to do this. Coast FIRE is a version of financial independence combined with a retirement savings strategy. It's about easing up, stepping away from high-pressure careers, and living on your terms. With this method, you continue working part-time at a job you love. I first learned about it while attending the Rose-Hulman Institute of Technology. It's essential to learn about personal finance early and start saving so you can benefit from compound interest when time is on your side. Once I started working, I maxed out my Roth IRA and 401(k), saving about $100,000 in four years. Throughout my 20s, I saved and invested about $150,000 total. With the power of compounding at a conservative 5% annual growth rate, I only need to contribute around $12,000 a year for the next 30 years to reach over $1.5 million in retirement funds and fully retire in my 60s. In 2023, during my first 18-week maternity leave, I started a reselling side hustle, purchasing products on sale and selling them for a profit on Amazon. Finding the optimal product to sell is a lot of trial and error. In the beginning, I went into stores to find profitable products. After weeks of market research, I learned that you can get 50% ROI on a specific brand of shoes. Based on that, I niched down product categories and brands. Then, I would purchase sneakers online during sales and resell them on Amazon for full price. I use an app that provides data such as product sales estimates and the number of sellers. I was privileged to have plenty of help with my newborn, including a work-from-home husband, parents, and in-laws who would switch off babysitting. This allowed me to invest enough time to master this new side hustle. I scaled the business to over $200,000 in revenue within a year, with a net profit of $14,000. In 2024, I shared my reselling story on YouTube, and it went viral, gaining over 2 million views and 50,000 subscribers. This led me to join the YouTube Partner Program, where I create one to four videos a month and earn around $500 monthly from YouTube AdSense. Along with my reselling business, this generates enough income to cover living expenses and the $12,000 I contribute annually toward my retirement fund. I currently earn between $2,000 and $5,000 a month as an entrepreneur. My husband's 9-to-5 job covers our family's health insurance and mortgage. His income is in the low six figures, and he enjoys his job, so he isn't looking to retire early. I pay for all the other bills, like utilities and groceries. I've worked as a software engineer at Tulip Interfaces for almost four years and will officially leave when my maternity leave ends to embrace freedom and flexibility. I like my job but don't prefer working for a company. I want to work for myself at my leisure. I'm on my second maternity leave and focused on creating content and launching new side hustles while spending more time with my family. For me, retiring means having the freedom to do anything I want. I won't sit at home and do nothing as a retiree. My hobby is starting new businesses, learning, and sharing my knowledge. I'm focused on testing different businesses, such as an AI automation agency, and launching additional e-commerce businesses. My core business currently focuses on content creation from YouTube. Ultimately, I want to travel around the world with my family. Do you have a story to share about retiring early? Contact this editor at lhaas@ Read the original article on Business Insider Sign in to access your portfolio
