Coast FIRE Assumptions Explained

Every projection rests on three pillars: expected returns, inflation, and withdrawal rate. Get any of them wrong by 1% and your plan can shift by a decade.

Market returns

The U.S. stock market has delivered roughly 10% nominal / 6.5–7% real returns per year over the last century. International developed markets have been lower (4–5% real). Bonds have averaged 1–2% real over long horizons. Use diversified, slightly conservative numbers — for a 70/30 stock/bond portfolio, a 5–6% blended real return is reasonable.

Volatility

Equities have annual volatility of ~15–20%. This drives Monte Carlo uncertainty bands. A high average return with high volatility may still produce unacceptable downside outcomes, which is why we report the 10th percentile, not just the median.

Inflation

U.S. CPI has averaged 2.5–3.0% over the last 50 years, but with multi-year regimes well above (1970s) and below (2010s) the average. The calculator defaults to 2.5% and lets you model inflation shocks.

Safe withdrawal rates

The 4% rule (Bengen 1994, Trinity 1998) supported a 30-year retirement with very high success across historical sequences. Subsequent research (Pfau, Kitces) suggests 3.25–3.5% for 40–50-year retirements common in FIRE. The calculator uses your input withdrawal rate to compute the retirement target.

Risk analysis

The biggest risks to a Coast FIRE plan are sequence-of-returns risk (poor returns shortly after you stop contributing) and regime risk (a sustained departure from historical averages). Use the stress-scenario panel — lost decades, early crashes, inflation shocks — to see how your plan holds up under each.