Are You Ready to Coast FIRE?

Last month my business partner, Pat, wrote about retirement and how rewarding it may be to transition to retirement.  Continuing with that theme, I have clients that have worked for many years, and some are now coasting to financial independence.  
 

 the Financial Independence Retire Early (FIRE) movement may sound amazing to some, not everyone can leave the workforce early.  Some may prefer to retire at a more traditional age, but pivot and gain more flexibility by working less hours.  This strategy is known as “Coast FIRE,” and may appeal to those that want to remain in the workforce but gain more flexibility by working part-time and receiving less income.
 

Those individuals that have predictable expenses and have accumulated a sufficient retirement portfolio that is projected to grow without further contributions are good candidates for Coast FIRE. Their only need during this stage is to earn enough income to offset their predictable expenses. At AssetGrade, we leverage financial planning software and run “what if” scenarios on financial plans to determine if a client can coast towards financial independence. 
 

There are both financial and psychological risks associated with Coast FIRE.  For lifelong savers, the concept of “not contributing” to a retirement plan and relying solely on portfolio growth can be unsettling.  And then there’s the financial risks, including lower than expected market returns, increased inflation, or unforeseen expenses.  

Helping clients to make informed decisions about their financial future is what we love, so please reach out to us if you’d like to learn more about coasting to financial independence.
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