10 Simple Steps to Begin Coasting to Financial Independence.

Coasting gives you many benefits of a FI lifestyle now while allowing you to work flexibly to cover living expenses.

Coasting to financial independence means that you’ve reached a point where your nest egg will grow to the amount you need to fully retire by your future retirement date.

In other words, you beat the game, you don’t need to save any more money, and you can take your foot off the gas. This means you can begin coasting, working part-time, or flexibly to cover your annual living expenses while letting your investments do the heavy lifting in the background.

The beauty of coasting to financial independence is that it’s typically much more attainable than full FIRE, which involves having a nest egg equivalent to 25 times your annual expenses. For someone spending $40k per year, that means they would need 1 million dollars to achieve FIRE.

Your coasting number, on the other hand, depends on factors such as your current age, the age you plan to retire fully, and any other income sources during retirement.

For example, someone who is in their late 20’s, with a future retirement age of 60 and an annual spending rate of $40–50k per year may only need $200–300k to reach coast FI, depending on their investment return assumptions and any social security income during retirement. That’s much less than the million dollars they would need to reach FIRE, and still offers many of the benefits of a FI lifestyle.

For a clear look at what your unique coasting number would be, check out this free coast FI calculator from Andrew at walletburst.com.

What’s so great about coasting?

Without fail, when I talk about coasting to financial independence, there’s always somebody who says, “why would I want to coast? It sounds no different than a traditional retirement?”

While it’s true that you do need to continue working to cover living expenses while coasting to financial independence, the beauty is in the way you can work. Since you are no longer focused solely on earning as much as possible to reach FIRE as quickly as possible, you can pursue more meaningful work that offers you the lifestyle and income you are interested in. That’s because when you coast, you only need to work to cover your living expenses as you’ve already hit your savings goals.

For me, this looks like seasonal tax prep every year from January to Mid April, and then freelance writing throughout the rest of the year. I can cover my living expenses by working flexibly throughout the year and can create a pretty kick-ass schedule that allows me to spend more time doing the things I love.

When I compare my flexible schedule to that of my peers, who are working a minimum of 40 hours per week, often in a job they aren’t excited about and taking the bare minimum amount of vacation days per year, it’s clear that coasting is very different from the traditional path to retirement.

Coasting is all about putting in the work, recognizing when you have done enough, and then taking your foot off the gas to enjoy the fruits of your labor.

So how can you coast to financial independence?

1. Answer George Kinder’s 3 Questions to create your unique why of FI. In Victor Frankl’s best-selling book, Man’s Search for Meaning, he concludes that the only way he was able to endure the difficulties he faced was because he had such a strong and clearly defined why. His why is what kept him going despite everything being stacked against him. To do hard things, you need a solid why, so start your journey to coast FI with a clear outline of why you are going down this path in the first place. Here are George Kinder’s 3 Questions for life planning. Answering them should help you get clear about your why.
   Q1: I want you to imagine that you are financially secure, that you have enough money to take care of your needs, now and in the future. The question is, how would you live your life? What would you do with the money? Would you change anything? Let yourself go. Don’t hold back your dreams. Describe a life that is complete, that is richly yours.
   Q2: This time, you visit your doctor who tells you that you have five to ten years left to live. The good part is that you won’t ever feel sick. The bad news is that you will have no notice of the moment of your death. What will you do in the time you have remaining to live? Will you change your life, and how will you do it?
   Q3: This time, your doctor shocks you with the news that you have only one day left to live. Notice what feelings arise as you confront your very real mortality. Ask yourself: What dreams will be left unfulfilled? What do I wish I had finished or had been? What do I wish I had done? [Did I miss anything]?

2. Save some damn money. There’s just no way around this one—if you want to reach any form of financial independence, you’re going to need to save some money. The way I see it, you’ve got a couple of options to save money: increase your income, or decrease your expenses. Of course, if you’re all in, you may decide to pull on both levers, simultaneously increasing your income while cutting expenses to supercharge your ability to save. Whatever you choose, remember that this is the most essential tool you have to reach financial freedom—your ability to save trumps investment returns, bonus points, tax saving strategies, and everything else

3. Invest and be willing to let it ride. After you’ve got your emergency fund figured out, it’s time to invest for the long term. Depending on your situation, this may mean stuffing money into an employer 401(k) and getting a company match, starting your own Roth or Traditional IRA, contributing to a Health Savings Account, buying crypto and staking it to earn a yield, or simply investing in a taxable brokerage account. There’s no shortage of options when it comes to account types and investments, so you’ll need to do some research here, but remember this: invest for the long run, don’t put all your eggs in one basket, understand the relationship between risk and return, and beware of the impact of fees over long periods. If you’re like me and want to keep it simple, consider investing in low-cost index funds that allow you to purchase shares of many different companies for an incredibly low cost, a win-win.

4. Align your spending with your values. Money is simply a tool you can use to live the life you want to live. That life may involve a trip to Starbucks each day, complete with the stereotypical $5 latte. If that’s the case, then great, enjoy it! Don’t listen to financial influencers that tell you to slash expenses to the bone to reach FI as quickly as possible—that’s garbage. Instead, focus your spending on the areas of your life that add a positive impact. For example, if you like eating out at restaurants, make sure you have a big fat line in your budget for eating out. Alternatively, if you don't care about the clothes you wear, slash that expense line to the bone. There’s no right or wrong when it comes to spending—as long as you’re putting your money towards the things you value, you’re doing it right.

5. Forget about the Joneses—they are broke and unhappy. One of the true cruxes of our time is that we have access to an unlimited amount of social comparison. Back in the day, you used to see what the people around you in your neighborhood and town had, and that became your lifestyle reference point. These days, you can open Instagram and scroll through reel after reel of all the beautiful homes, cars, vacations, and other stuff people have. This causes us to want more, more, more, which, left unchecked, can lead you to be broke and unhappy. So forget about keeping up with the Joneses—focus on what’s important to you, and make it happen.

6. Focus on the freedom that your money can provide. Whenever I find myself caught up thinking about all the stuff I could buy, I bring myself back to my favorite purchase of all time: my freedom. If you master your money, you get to wake up every day and decide how you’ll spend your time, “the grandmother of all financial goals,” as bestselling personal finance author Morgan Housel aptly puts it.

7. Design a lifestyle that lights you up. The beauty of coasting is that it allows you to design your ideal lifestyle and begin living it today. For me, my ideal lifestyle involves some work, a lot of play, and tons of time to spend with my wife and daughter, the two most important people in my life. I’ve set up my schedule so the three of us can go on long walks in the morning after sleeping in and having a slow breakfast. Undoubtedly my ideal lifestyle will change as our family grows and evolves, but it’s up to me to design the lifestyle I want and make that a reality.

8. Hone your skills and consider starting a small business. When I began coasting to financial independence, I started picking up freelance writing gigs through Upwork. Over time, my skill as a writer has improved, I’ve gotten more specific in my niche, and I have been able to charge a premium for my work. This allows me a very flexible and steady income throughout the year, all while giving me the option to work remotely from anywhere with an internet connection and making it so I never have to ask a boss for a day off again. Of course, not everyone will be attracted to freelance or independent contractor work, but if you are, the juice can be well worth the squeeze, as long as you hone your skills and know your worth.

9. Understand the math and know your coasting number. When beginning to coast to financial independence, it’s essential to know the math inside and out. Familiarize yourself with the Coast FIRE calculator and know what your unique number is to begin coasting.

10. Re-evaluate and adjust your plan as needed. Last but not least, accept that life is going to change and evolve, and so should your plan. Don’t feel locked into any specific game plan, but rather view your plan as a living breathing document that is subject to change. As your lifestyle and preferences shift, feel free to switch up your approach, maybe choosing to bump in and out of Coast FI as you please. There’s no one way to achieve financial independence so don’t be afraid to put your unique spin on it and be open to new ideas as they come your way.

So there you have it, 10 simple steps to begin coasting to financial independence.

Are you coasting to financial independence? Would you like to? Hit me up in the comments below and let’s discuss your situation—I am happy to offer any advice, tips, and suggestions that I can!