What If You Never Had to Think About Saving Money Again?

When Nicole Victoria got her first corporate job in her early 20s, she dreamed of a corner office, a six-figure salary, and the financial stability she assumed would follow. She’d been raised “with a lot of scarcity,” she says; her mom struggled to pay the bills with part-time jobs while her dad was sick with cancer. She remembers moving a lot between cheap apartments infested with bedbugs. “It was pretty tumultuous,” she says. “All I wanted was a feeling of security, the comfort of knowing I could take care of myself.”

In addition to her full-time job, Nicole sold real estate on weekends and stuck to a strict budget. “I kept my spending similar to what it was when I was waitressing during school,” she says. This enabled her to save and invest $100,000 by the time she was 25. Soon after that, she realized that investing early had put her on an unexpected path: Even if she never saved another dime, her investments had enough time to grow that she could retire on them at 65 (provided she didn’t touch them before that). This strategy even has a name — Coast FIRE, which stands for ‘financial independence, retire early’ — centered on the idea that if you invest enough at an early age, you can sit on that money for decades (or “coast”) without adding to it, letting compound interest work its exponential magic until you’re ready to retire.

Of course, it might seem ridiculous — or just unrealistic — to shovel money into your retirement savings in your early 20s. What little income you can spare is probably going toward more immediate needs like student loans, rent, and figuring out what you want to do with your life. But from a math perspective, front-loading your investments is worth it: The more time your money spends in the market, the more it will grow, and the less you’ll need to save to begin with. For young people looking for more financial security, that’s an attractive proposition — and it’s catching on. “I’m seeing more and more people realize that this is a more accessible way to build wealth,” says Nicole.

At its core, Coast FIRE is simply a math formula for your financial future. To get a sense of how to apply it to your own life, start with a general idea of how much money you’ll need to retire, says Melissa Jean-Baptiste, a 36-year-old financial educator and author. One way to do so is by multiplying your annual expenses by 25, based on the 25X rule of retirement. “So if your cost of living adds up to about $50,000 a year, then you’ll need around $1.25 million to retire,” she explains. Next, plug in that number, along with your current age, income, savings rate, and anticipated age of retirement, into one of the many Coast FIRE calculators available on the internet. The result won’t be exact or perfect, but it’ll give you a rough guideline.

Here’s what Melissa’s math looks like: “Looking at my own annual expenses, I can calculate that I need to have $1.7 million at age 65 to retire comfortably,” she says. “If I have 30 years until my retirement, that means my Coast FIRE number is $171,000. So I knew that from the moment I hit $171,000 in my retirement account, I could retire in 30 years even if I don’t add another dollar to my savings.”

Those numbers might sound unachievable, but Melissa got there “almost by accident,” she says — and on a public-school teacher’s salary, no less. When she started teaching at 21, an older colleague (her “work mom”) instructed her to put a portion of her paychecks into a retirement fund. “I had student loans and I didn’t feel like I could afford it, but I did what she told me and contributed 3 percent of my salary, which amounted to a few hundred dollars a month,” Melissa says. Then, every time she got a raise, she increased her contribution. It didn’t seem like much, but by the time she left her teaching career at 31, she was verging on her savings target.

“When you calculate how much money you need to have invested in order to retire, it can be terrifying,” she explains. “You’re like, ‘Wait, I need $2.5 million? I don’t even have $25 right now. I don’t know how to reach that goal.’ But when you calculate your Coast FIRE number, and how much time you have for compound interest to work in your favor, then it’s much more achievable, especially if you’re young.”

In Nicole’s case, reaching Coast FIRE helped her realize that there was a different path to financial success than the corporate ladder she’d envisioned. She left her previous job and real-estate side hustle to write e-books, run her own money-literacy business, and spend more time with her two kids. Now 33, she doesn’t plan to retire anytime soon, but she’s enjoying the comparatively slower pace of her life these days. “Having that money saved made me realize I could finally breathe,” she says. “When I saw that six figures in my account for the first time, I don’t know how to describe it — it’s just a feeling that everything is going to be okay.”

Even if you missed the boat on investing heavily in your early 20s, it’s not too late. Delyanne Barros, a former lawyer, didn’t get serious about her finances until she was 37. “At that point, I had been an attorney for 14 years, and I couldn’t even afford to buy a home. I’d done everything I was supposed to — I put myself through school, I got the job, I was making six figures — but there I was, still with $150,000 in student loans, feeling stuck and behind.”

Luckily, she had been contributing small amounts to her 401(k) since she was 28. “The HR manager told me to sign up for it, so I put in about $100 a month at first. Then I basically ignored it.” Eight years later, she logged into the account and found that there was almost $100,000 in there. “I was like, ‘What the hell? Whatever this is, it works.’”

Seeing her money’s growth in the market encouraged her to make a plan. She cut her living expenses drastically and threw the kitchen sink at her debt. Within a year, she paid off her student loans and turned her focus toward investing as much as she could. “I went from, ‘Oh, I can be debt-free,’ to realizing, ‘Oh, I can save enough money that I can never have to worry about saving money again.’” She had a strong motivation, too: She hated her job and wanted to change careers. “Everybody’s got different things that push them to change their lives, and that was mine,” she says. “I just really wanted to find a way out.”

Making an attorney’s salary certainly helped, too. Now 41, Delyanne was able to leave her law firm, start a lucrative coaching business, and move to Portugal. She hit her Coast FIRE number a few years ago — $400,000 in her 401(k), which she calculates will grow to $2.7 million in 25 years — but she’s still saving and investing aggressively so that she can fund her mom’s retirement as well as her own.

The best thing about aiming for Coast FIRE is that, for most people in their 20s and 30s, it’s a relatively achievable number. “Once you reach it, then you can keep working and use that money you previously saved for retirement to do other things, like save for a house or travel,” says Delyanne. “Or you might be able to make a career change where you’re earning less because you don’t need to save anymore. Maybe it means you decide to work less, to spend time with your kids or take care of loved ones.”

That said, 25 years is a long time, and a lot can change — including your financial needs in retirement. Maybe you thought you’d saved enough, only to realize that you’ll need more. Critics of Coast FIRE point out that market conditions are always changing, so your strategy might require tweaks down the road. But the long runway is another reason why this approach can be appealing, says Melissa: You have time to figure it out. “I’m still working, so now I’m using my income to invest in other ways — not just in my retirement funds,” she explains. “At the very least, I know that as of today, if I cannot invest another single dollar, I will still be able to stop working by 65. I will be able to manage and live. And that’s very comforting.”

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