FatFIRE vs CoastFIRE: Which FIRE Strategy Is Right for You?

The FIRE (Financial Independence, Retire Early) movement has exploded in popularity, but it's not one-size-fits-all. Within the movement, several distinct strategies have emerged, each suited to different personalities, income levels, and life goals.

Two of the most popular variations are FatFIRE and CoastFIRE—and they represent nearly opposite ends of the spectrum. In this comprehensive guide, we'll explore both strategies in detail to help you determine which path aligns best with your financial goals and lifestyle preferences.

Understanding the FIRE Foundation

Before diving into the specifics, let's establish the core FIRE principles that both strategies share:

The 4% Rule

Most FIRE calculations are based on the 4% rule, which suggests you can safely withdraw 4% of your retirement portfolio annually without running out of money. This rule is derived from the Trinity Study and assumes a 30-year retirement period.

Formula: Annual Expenses × 25 = FIRE Number

Example:

• Annual expenses: $50,000
• FIRE number: $50,000 × 25 = $1,250,000

Key FIRE Metrics

• Savings Rate: Percentage of take-home income saved
• FIRE Number: Total portfolio size needed to retire
• Time to FIRE: Years until reaching financial independence
• Safe Withdrawal Rate: Percentage you can withdraw annually

FatFIRE: Financial Independence with Abundance

What is FatFIRE?

FatFIRE stands for "Fat Financial Independence, Retire Early." It's the strategy of accumulating enough wealth to retire early while maintaining a high standard of living—typically $100,000 to $300,000+ in annual spending.

FatFIRE Numbers

Using the 4% rule, here's what different FatFIRE levels require:

Many FatFIRE adherents use a 3-3.5% withdrawal rate for extra safety, especially for early retirement periods of 50+ years.

Who is FatFIRE For?

FatFIRE is ideal for:

• High-income earners ($200,000+/year) who can save aggressively
• Individuals who want to maintain their current lifestyle in retirement
• Those who enjoy luxury travel, fine dining, and expensive hobbies
• People in high-stress careers (tech, finance, medicine) who want out but don't want to compromise their lifestyle
• Families wanting financial security with comfortable buffers

The FatFIRE Path

Typical Profile:

• Age: 30-45 at FIRE
• Career: High-paying tech, finance, consulting, or medical
• Income: $200,000-$1,000,000+/year
• Savings rate: 40-70% of income
• Time to FIRE: 10-20 years

Example Journey:

• Age 25: Starting salary $100,000
• Age 30: Salary $200,000, portfolio $300,000
• Age 35: Salary $300,000, portfolio $1,200,000
• Age 40: Salary $400,000, portfolio $2,800,000
• Age 42: Reach $3,500,000, retire with $120,000/year spending

FatFIRE Advantages

1. No lifestyle compromise: Continue enjoying the comforts you're accustomed to
2. Generous buffer: Large financial cushion for unexpected expenses
3. Flexibility: Room for expensive healthcare, family support, travel
4. Less worry: Substantial assets provide peace of mind
5. Legacy potential: Likely to leave inheritance for children

FatFIRE Challenges

1. High savings requirement: Need to save millions of dollars
2. Longer working years: May require 15-20 years of high income
3. Golden handcuffs: High income often comes with high stress
4. Lifestyle inflation: Easy to increase spending as income grows
5. Geographic limitations: May need to work in HCOL areas

CoastFIRE: Financial Independence with Flexibility

What is CoastFIRE?

CoastFIRE is when you've saved enough that, without adding another dollar, your investments will grow to a full FIRE amount by traditional retirement age (typically 65-67). You can then "coast" by working part-time, pursuing passion projects, or taking lower-stress jobs without worrying about retirement savings.

CoastFIRE Calculation

The formula for CoastFIRE:

Current Savings × (1 + Annual Return)^Years = Target FIRE Number

Example:

• Current age: 30
• Target retirement age: 65
• Years to grow: 35
• Assumed return: 7%
• Target FIRE number: $1,500,000

Working backwards:

• Required CoastFIRE number = $1,500,000 ÷ (1.07)^35
• Required CoastFIRE number = $1,500,000 ÷ 10.68
• Required now: $140,449

This means if you have $140,449 at age 30, you can stop contributing to retirement and still have $1.5 million at age 65 (assuming 7% returns).

Who is CoastFIRE For?

CoastFIRE is ideal for:

• Younger individuals (20s-30s) who want flexibility sooner
• People seeking work-life balance over maximum wealth
• Career changers wanting to pursue passion over pay
• Parents wanting more family time while kids are young
• Those burned out from high-stress careers
• Geographic freedom seekers wanting to move to LCOL areas

The CoastFIRE Path

Typical Profile:

• Age: 28-35 at CoastFIRE
• Career: Start in higher-paying role, transition to passion work
• Income: Start $60,000-150,000, coast at $30,000-60,000
• Savings rate: 50-70% in accumulation phase
• Time to CoastFIRE: 7-12 years

Example Journey:

• Age 22: College graduate, salary $65,000
• Age 25: Salary $85,000, portfolio $75,000
• Age 30: Salary $110,000, portfolio $250,000 (CoastFIRE achieved!)
• Age 30+: Transition to $45,000 part-time work, pursue art/travel
• Age 65: Portfolio grows to $2,000,000 without additional contributions

CoastFIRE Advantages

1. Earlier freedom: Achieve financial flexibility in your 30s
2. Career flexibility: Pursue passion over paychecks
3. Less stress: No pressure to earn high income
4. Geographic freedom: Can move to LCOL areas
5. Work-life balance: More time for family, hobbies, health
6. Less savings needed: Require significantly less upfront capital

CoastFIRE Challenges

1. Longer working years: Still need to work, just not as intensely
2. Healthcare costs: May need to pay for private insurance
3. Lifestyle limitations: Often requires reducing expenses
4. Market risk: Relying heavily on decades of market growth
5. Inflation risk: Long time horizon increases inflation impact
6. No safety net: Less buffer for emergencies in the coast phase

Side-by-Side Comparison

Which Strategy Should You Choose?

Choose FatFIRE if:

• ✅ You have or expect high income ($200K+)
• ✅ You love your current lifestyle and don't want to change
• ✅ You're okay working intensely for 15-20 years
• ✅ You want maximum financial security
• ✅ You have expensive hobbies or travel plans
• ✅ You live in or want to stay in HCOL areas
• ✅ You want to leave a substantial inheritance

Choose CoastFIRE if:

• ✅ You're in your 20s or early 30s
• ✅ You're willing to reduce expenses
• ✅ You value time freedom over luxury
• ✅ You're burned out or want career flexibility
• ✅ You can reach CoastFIRE number relatively soon (5-10 years)
• ✅ You have passion projects or alternative career interests
• ✅ You're comfortable with moderate lifestyle

Calculating Your Numbers

FatFIRE Calculation

1. Determine desired annual spending: Be realistic about lifestyle costs
2. Multiply by 25-33: Using 4-3% withdrawal rate
3. Calculate years to reach: Based on current savings and savings rate

Try our FatFIRE Calculator to run your numbers.

CoastFIRE Calculation

1. Calculate FIRE number: Annual expenses × 25
2. Determine years until traditional retirement: Usually 65-67
3. Work backwards using compound growth formula
4. Compare to current savings: Have you reached CoastFIRE?

Try our CoastFIRE Calculator to see if you've reached CoastFIRE.

Conclusion

FatFIRE and CoastFIRE represent different philosophies within the FIRE movement. FatFIRE prioritizes maintaining a high standard of living and complete work freedom, while CoastFIRE emphasizes achieving flexibility sooner with reduced financial pressure.

Neither is inherently better—the right choice depends on your values, income, age, and life goals.

Key Takeaways:

• FatFIRE requires more savings but offers more luxury
• CoastFIRE provides earlier flexibility with moderate lifestyle
• Hybrid approaches can combine benefits of both
• Start calculating your numbers today
• Stay flexible and adjust as life evolves

Remember, the goal isn't just to retire early—it's to design a life you don't need to retire from.

Ready to run your numbers?

• FatFIRE Simulator
• CoastFIRE Simulator