Wake Up, It’s Unbelievably Obvious we are Coast FI

Securing Coast FI status is a major step in the Financial Independence (FI) movement. Obsessing about “retirement” and making “paid work optional” in your future? Accordingly, we are planning to work, but not necessarily for a paycheck.

Coast FI as Damn Right Scary

In truth, thinking about officially calculating to see if we were “Coast FI” is damn right scary. We are habitually maxing out contributions to our retirement accounts.  Fearing the switch from accumulation to drawing down a lifetime of savings is incredibly uncomfortable. Coast Financial Independence or “Coast FI” is having enough saved that you no longer have to contribute towards your retirement.  We’re not kidding that the thought of “Coast FI” is, in many ways, a scary concept.

Calculating “Coast FI” presupposes an expected annual rate of return off in a distant period assuming a rate of return above 4%. Conversely, this is counter-intuitive to a 4% “safe” annual withdrawal rate.  If you truly believed you were Coast FI would you stop contributing to your own retirement accounts? Consequently, what if we miscalculated the rate of return, and did not have any time or financial opportunity to fix it? 

Making our Obvious Calculation

Conjuring optimism, we presumed a 7% annual rate of return based on our current employer retirement accounts.  Based upon calculations using a 7% rate of return, we are “Coast FI” in 12.5 years.

Obviously, this “discovery” probably was foreseeable given the maxing out of pre-tax employment accounts for quite some time. Confirming our Coast FI status has not changed our insatiable desire to continue maxing out retirement accounts “just in case.”  Similarly Mr. 1500 Days describes “One more year syndrome” where people think, perhaps irrationally, that they need one more year before they quit paid work. 

Instead, we started thinking, what if we really were “Coast FI” as of today? What would we do differently?  Meanwhile, we need these pre-tax retirement account funds to continue to accumulate for nearly 13 years utilizing Coast FI.  What if we could “road trip” to prior to gaining access to our retirement funds? How much time would this take?  This was a freeing exercise.  Presently, we are enjoying our jobs. What if the people and circumstances at work changed?  What if we no longer found meaning in our current roles?  How long would it take for us to have the funds to allow us to “Road Trip” it?

What Do We Mean By “Road Trip”?

Deciding to advance a “Road Trip” to Coast FI aligns with our Two-Part FI Number strategy. We are creating a plan that separates our funding by age ranges. This has set off a new whirlwind of possibilities for us.  Consequently, we are having a new level of excitement not only about both the present and future.

Riding the Wave and the Joy of Travel

Typically, pre-COVID, our family went on two vacations a year, one major and one more of a four-day weekend somewhere.  We recently earned a two-month Southwest Travel Companion Pass. More travel is a high priority for us.

We have also reached the point in our lives that it has become difficult to align everyone’s schedules together.  It truly has been a joy to travel with my spouse and children. Having instilled in our children a desire to travel and to explore new things is a gift.

Prioritizing travel, exercise, and spending time with family and friends are musts for us. We are cognizant that time with loved ones is limited.

We are excited about the road ahead, especially knowing that “Coast” is closer than we thought.