How To Reach Coast FIRE By Age 30, 40, and 50 #Finance

hey everybody welcome back to whiteboard Finance my name is Marco and I’m here to help you master your money and build your wealth today I want to talk about a

topic that is near and dear to my heart uh it stems from the fire movement which I think the fire movement is unrealistic for a lot of people whether it’s sacrificing lifestyle or getting to a huge nut that they can’t necessarily cover in a short amount of time so this CashNews.co today

is about coastfire it’s a happy medium between the two where you still get to enjoy life and you get a realistic number that you can Coast to um so this is something that I’m practicing in my own personal financial life so I thought it’ be a good time to talk about it and I also

just want to break it down very quickly we’re going to do it by age so the first half of the CashNews.co I’ll just give you a quick rundown of what it is if you already know what it is skip to the second half of the CashNews.co what we’ll break it down by decade by age so in your

30s 40s 50s 60s what it’s going to take to actually achieve coastfire so for those of you that don’t know what coastfire is this is when you invest enough in your retirement accounts UPF front meaning you cover the IAL nut up front to where it can grow without any additional

contributions to support your retirement at a specific future age so you still need to earn money but you no longer need to save money for traditional retirement so think of it like paying off a mortgage or paying off a car Loan you basically cross out that line item of your to-do

list which in this case would be saving for retirement so the compounding of your investment will actually get you to your fire number but it allows you to pursue other interests that pay less or less stressful for example so if you take a look at this spectrum we have all different types of fire

we have Coast fire Barista fire lean fire traditional fire and then we have fat fire so I want to break down this personal wealth Spectrum real quick just so you have an idea uh this is calculated using certain percentages we’re going to actually change these percentages to a different amount

for the second half of the CashNews.co but if you want to take a look at this chart just pause the CashNews.co here I’m not going to go through every single one of these okay so now that you study that chart a little bit further we’re actually going to get into calculations of how much

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style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance or click the link in the description to get your free life Insurance quotes and see how much you could save okay so this calculator is from wallet burst I have used this calculator in the past but I think

it’s important to kind of give people a realistic gauge or spectrum of what uh information they can input here obviously these numbers are going to change because people’s Coast fire age is going to be different we’re going to assume uh 50 and 62 so that way you can still get to

traditional retirement or Social Security 50 62 and A2 but for the people that want to uh Coast fire a little bit earlier or reach that fire number a little bit earlier we’re going to figure out what those numbers are at 50 yes you can do 40 yes you can do 45 yes you can do 32 if you want um

but for the majority of people watching this channel I think the numbers and the Incomes and the demographics it’s going to be best suited with those two numbers so so let’s take a look at some of these assumptions so right now we’re going to pretend that

you’re 30 years old I’m going to do this for your 40s 50s and then 60s and then we’ll do retirement age as well so for annual spending in retirement uh I decided to use $75,000 for some of you on the coasts or some of you in more high cost living areas you guys are laughing at

this number uh for other people that are in the midwest this is a normal number that you can live a normal life on uh keep in mind though if you are sticking with this older age in mind you’re going to have a paid-off house most likely especially if you’re watching this Channel and

you’re smart with your money uh you’re going to have Medicare Medicaid you’re going to have different types of Investments that have grown over time so your spending in retirement may or may not be less than it is today in your 20s 30s 40s or 50s right so

typically people tend to spend a little bit less as they reach older age we’re going to assume that you have zero current invested Assets we’re going to assume that you’re not contributing anything we’re going to assume an investment growth rate of 7% so the

way that I’m looking at this is going to be something like an S&P 500 fund or vti like vanguard’s total Stock Market fund you can invest in whatever you want some people assume 8020 stocks and Bonds I’m just going to assume that we’re

doing the S&P 500 historically the S&P 500 has returned closer to 10% uh but just to be conservative this is one of those scenarios where it’s nice to have more than you need and not need it and be able to give it away through charity or family friends whatever then you know you do

these calculations and you find out okay I over projected and I don’t have enough so we’re going to stick with seven as the growth rate we’re going to stick with three as the Inflation rate uh 3% overall somewhat is accurate if you’re looking at the CPI if

you’re looking like things at groceries for example then you know 3% is a joke right um groceries are up 20 30 40 50 100% in some cases so it just depends on how Inflation affects people differently um someone who is living in their mother’s basement has a different

Inflation rate than a family of four where you need to provide braces cars things like that right so everyone’s Inflation rate is different let’s just stick with three that’s typically been the metric uh for the past few decades so if we look at

the safety withdrawal rate uh we’re going to use 4% so this is basically just the Trinity study uh if you take your annual expenses multiply by 25 you can then take 4% out every year you can still account for Inflation and you can still account for growth if we do assume 7%

at the bare minimum that way you’re quote unquote never touching your principle does this happen 100% of the time of course not uh no one has a crystal Ball but these are safe assumptions so now if we did this for the 30-year-old who wants to retire at 62 who wants to live off of 75 grand a

year Inflation adjusted so these are Inflation adjusted numbers um you would need this number right here 534,906 time to compound so you can see here that’s 534,906 2 years old so this number is actually going to be closer to $800,000 this is $791,000 million

and then if I go to 60 it’s going to be 1 .73 million just to get you to your fire number of 1.875 million again that’s just $775,000 your annual spending and retirement multiply by 25 that’s assuming you should have 25 years where you don’t ever quote unquote touch your

principle um because again you’re taking out 4% every year to live and the stocks should grow about 7% a year on average so that’s what those numbers are you can play around with this uh if you want to mess around with the safety withdrawal rate if you want to be even more conservative

you can do like a 3.5% for example um if you wanted to do a little bit more aggressive you can do 4.5% I wouldn’t recommend that Dave Ramsey actually talks about uh 8% which I made a CashNews.co about that’s kind of laughable in my opinion it fails most of the time um but for most

people I think 4% is fine so the reason I’m making this CashNews.co is because you can mess around with these numbers but it’s good to know that if if you were to come into a big chunk of money uh God forbid whether it’s you know life Insurance losing a loved one

winning the lottery getting a huge bonus at work exercising Stock Options uh investing diligently for decades right maybe you’re in your 40s maybe you’re in your 50s it’s good to know to where you can stop and what do I mean stop I mean stop saving for retirement

uh the reason I’m talking about that is because a lot of people to get to that number they’re working stressful jobs or they want to pursue other interest or they don’t want to work as hard when you’re Coast firing it’s almost like paying off a mortgage or paying off a

car Loan or paying off your Debt you’re just taking that line item of knowing that you have to save for retirement you’re checking the Box you’re Crossing it off you know that you got to that number and you don’t have to contribute anymore

if you don’t want to that’s the whole point of the CashNews.co so let me run you through one more quick example uh say for example as I mentioned you want to retire at 50 you can see how the number changes this number went from 500 something Grand to 855 why is that it’s because

you’re trying to retire or hit that fire number 12 years earlier okay remember this used to be 62 now it’s 50 so if I zoom in a little bit age 30 uh to 50 is going to be 855,000 age 40 to 50 is going to be 1.26 million and by the time you get to 50 which is where this red line meets you

will be at that fire number 1 .875 million obviously that number is going to change depending on your annual spending and retirement maybe you need 50 Grand right well now this becomes 570,000 at 50 and it becomes 356,000 at 62 okay so it all depends on how much you need now if you live in a high

cost living area say you need 125 Grand you know to get to that number well you can see you need 89 ,000 starting at age 30 just to get to 62 uh 1.3 million at 40 to get to 62 almost 2 million at 50 and then if you change this to 50 you’re going to need a lot so starting at 30 you’re

need 1.42 million your fire number is 3.125 million instead of the 1.875 for the 75 grand sorry let me put in 75 and you can see that right here 1 .875 million so play around with this calculator again this is just to give you an informed decision I’m going through this personally um

I’m basically at coastfire right now but I’m just debating now do I put in more money so I can have more annual spending when I get to my coastfire number or am I happy with maybe my wife working waiting for her pension to kick in at 55 I don’t know so me personally I’m

almost uh the die with zero mentality I don’t want to die literally with zero but I don’t want to do stuff or work for someone else too long or longer than I have to that’s why coastfire is appealing to me because I know by age x uh let’s call it 50 for my example

that’s the that’s the age that I use I know that I have 14 more years to go to hit 50 I’m currently 36 with two little girls you know I’m good they’re going to be you know 16 17 18 years old and I’m going to be coastfire or financially independent at that time as

long as these numbers play out that’s the other thing you have to do I would underwrite this a little bit more conservatively um just so you’re safe but who knows World War III may break out or you may have the most prosperous generation in human history right we don’t know all we

can do is work off of past numbers but they’re not indicative of future results thank you so much for watching hopefully you got value out of this CashNews.co let me know what your coastfire age and number is down below thank you so much have a prosperous day bro when I hit my Coast fire

I’m going out for a gallon of milk and I’m never coming back dude I’m going to the Greek Islands these kids ain’t never going to see I’m just kidding I love my children just kidding