What growth rate should you use in a Coast FIRE calculator? Five percent, real, after inflation. That is the short answer, and it is the assumption doing most of the work in your number. Before I explain why, look at what the assumption does to a $1,000,000 FIRE number with 30 years of compounding:
| Real return | Coast FIRE number |
|---|---|
| 4% | $308,319 |
| 5% | $231,377 |
| 6% | $174,110 |
| 7% | $131,367 |
| 8% | $99,378 |
The same life, the same timeline, and the answer swings from $99,000 to $308,000 depending on one input. That swing is why this question matters more than the calculator's other settings combined. A Coast number computed at 8 percent is a hope with a spreadsheet attached.
Why the return must be real, not nominal
Your spending is in today's dollars, so your growth assumption has to be in today's dollars too. A nominal return minus inflation gives you the real return, and the real return is what compounds your purchasing power. The common shorthand: roughly 10 percent long-run market return minus roughly 3 percent inflation gives about 7 percent real. Some calculators default to 5 percent real, which is roughly 7 percent nominal minus 2 percent inflation. Both are the same idea with different inflation guesses.
Using the nominal 10 percent directly is the classic error, and it flatters every number it touches. At 10 percent nominal, that $1,000,000 target 30 years out needs just $57,000 today. One FIRE writer calls this habit flatly misleading, and the reasoning is simple: inflation exists, so a plan in nominal terms pretends it does not. Always ask whether a Coast number you are reading was computed real or nominal before you compare it to yours.
How to pick your number
The formula is Coast FIRE number = FIRE number / (1 + r)^n, where r is the real return and n is years until your target retirement age. Your choice of r should reflect your actual portfolio, not the market's greatest hits.
- Mostly stocks: 5 to 7 percent real. Seven percent is roughly the long-run real return of a stock-heavy portfolio, and it is the standard assumption in most Coast FIRE writing. Five percent is the conservative version of the same portfolio. My practice is to plan at 5 and glance at 7. If the plan works at 5, the extra two points are margin. If it only works at 7, I am not done saving.
- Mixed stocks and bonds: 3 to 5 percent real. Every 20 percent of your portfolio in bonds shaves roughly a point off the expected real return. A 60/40 portfolio at 4 percent real is a defensible assumption, and it meaningfully raises the Coast number. People forget to adjust r when they de-risk, then wonder why the plan feels tight.
- Mostly bonds or cash: 1 to 3 percent real. At 2 percent real over 30 years, the Coast number for a $1,000,000 target is about $552,000. Coasting on cash is barely coasting at all, which is the mathematical reason the strategy assumes equity exposure.
The stress test that actually matters
Run your number at two rates: your honest estimate, and two points below it. If you believe 6 percent real, also compute at 4 percent. The gap between those two numbers is your margin of safety, and it tells you something the single number cannot: how much of your plan is compounding, and how much is optimism. A plan where the 4 percent case still leaves you within a few years of saving is robust. A plan that falls apart below 6 percent is a market forecast wearing a plan's clothes.
Recheck yearly, or after any year the market moves more than about 20 percent in either direction. The inputs drift: your spending changes, your portfolio mix changes, and n shrinks every birthday. The calculator is not a one-time oracle. It is a gauge you glance at the way you glance at a fuel gauge, and the growth rate is the part of the gauge most worth arguing about.
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Frequently asked questions
What growth rate should I use in a Coast FIRE calculator?
Five percent real (after inflation) is the sane default for a stock-heavy portfolio. Seven percent real is the optimistic standard. Plan at 5, glance at 7, and treat anything above 7 as a forecast, not a plan.
Should I use nominal or real returns for Coast FIRE?
Real. Your retirement spending is in today's dollars, so the compounding has to be measured in today's dollars too. Nominal returns minus inflation give the real return. Using 10 percent nominal without subtracting inflation understates your Coast number dramatically.
Is a 7 percent return realistic for Coast FIRE?
It is roughly the long-run real return of a stock-heavy portfolio, so it is a reasonable central estimate. But your specific 25 or 30 year window will differ, which is why the standard advice is to stress-test at 5 percent as well.
What if my portfolio is mostly bonds?
Use 1 to 3 percent real. Coasting works because equities compound; a bond-heavy portfolio needs a much larger starting number to reach the same target, which the formula will show you immediately.
How often should I recheck my Coast FIRE number?
Yearly, or after big market moves. Your spending, portfolio mix, and years remaining all drift, and the growth assumption deserves a fresh look each time.
Related reading: Coast FIRE and Inflation: Adjusting Your Number · Your Coast FIRE Number by Age · Coast FIRE vs Barista FIRE: Which Fits Your Life? · Can You Coast FIRE with $200K Saved?