In his June 25, 2025 Kitces.com post, Adam Van Deusen encouraged financial advisors to help their clients understand when they may have enough retirement savings to “Coast-Fire” and keep working without necessarily saving more. The present value calculations required to implement this strategy are relatively straight-forward, but financial advisors (and DIYers) would be wise to use a tool like the Actuarial Financial Planner to perform the required calculations and an actuarial valuation process to manage assets, spending liabilities and risks for clients (or households) who actually choose to Coast-Fire.
Because it generally involves a longer period of time and a pre-retirement (still working) period as well as a post-retirement period, the Coast-Fire strategy is a little more complicated than a regular early retirement and involves a few more risks. For this reason, it is important to annually compare the present value of the household assets with the present value of the household’s spending liabilities to measure, monitor and manage the household’s Funded Status. The actuarial approach outlined in this website, with its Funded Status guardrails, is just what the doctor ordered to maintain sustainability of such a strategy (as well as any other retirement strategy).
As noted in Mr. Van Deusen’s article, there are many financial risks associated with the Coast-Fire strategy, including:
- Lower than expected investment returns either before or after retirement
- Increased spending requirements (or just increased spending) either before or after retirement*
- Job loss, or reduced earnings during the pre-retirement period
- Possible Social Security cuts, and
- Longer than expected longevity
*Note that there are many factors that can increase spending, including:
- Higher than expected taxes
- Higher than expected inflation
- Higher than expected long-term care costs
- Unexpected family support
- A change in marital status,
Summary
The Coast-Fire concept is an interesting strategy that may have appeal to relatively younger individuals or households who don’t need or want to keep saving for retirement, but would like to continue working in a less-stressful environment. The challenges and risks associated with implementing this strategy are no less, and can be more, than the challenges associated with the decision to retire at any age. The present value calculations in the Actuarial Financial Planner and our Funded Status metric are well-suited for dealing with these challenges and for helping Coast-Fire individuals (Coast Firers?).
