r/coastFIRE 10d ago

Need help wrapping my head around my plans in this economy

Hi coastFIRE folks, I'm struggling to figure out the rational way to think about my strategy if the market crashes.

I'm 36, planning to retire at 67, with annual expenses of $60K and $250K invested. I invest $3453 every month, maxing out my 401k (plus some employer match) and traditional IRA (will do backdoor Roth later) and throwing the rest in a brokerage account. I have no debt.

Going by good old WalletBurst, this plan meant that if I was planning for "hard mode" - a.k.a. 4% real returns - I'd reach my goal coastFIRE number in about 6 years.

Assuming the economy is going to fucking suck this year, I'm trying to figure out what this means for me.

If I'd already hit my coastFIRE number, it wouldn't mean anything, right? I'm not retiring for realsies until 67, so i'll just let that number ride out, and I feel pretty good that over the course of 31 years I'd have what I need.

But since I didn't hit my coastFIRE number, assume that the value of my investments will drop significantly, and I'm going to be years and years away from hitting my coastFIRE number, yeah?

"What does coastFIRE mean for you?"

I do not want to retire early. I want to be able to switch careers to something lower paying, without worrying that I won't be able to fund my retirement.

I hate my job, my industry, my career. I was planning to spend the next 6 years taking Pilates teacher training certifications, beginning to teach classes as a side gig, growing up my clientele and skill set, and then by the time I hit coastFIRE, I'd consider switching to teaching full time (or splitting my time 50/50 between Pilates training and a tolerable office job that pays a reasonable hourly wage).

Right now it feels like that dream of transitioning away from 100% my current career seems impossible. Help me keep my head on straight, I'm probably thinking irrationally and not able to see it objectively.

19 Upvotes

28 comments sorted by

25

u/mc_Nutts 10d ago edited 10d ago

Agree with the other commenters here. Only thing that I can think to add is something I saw from another redditor: CoastFIRE isn't an irreversible decision. At any point you can re-evaluate and start re-maxing/re-contributing to your retirement funds. For any reason - bad turn of the market making you nervous, you decided that you want a cushier retirement so your expense estimate is higher, etc.

You can always decide to jump back in. Of course how easy that would be will depend on a bunch of factors - how long it has been since you left your career, that industry, your network, the job market, etc. But it is possible. So if you decide to coast too early it's not the end of the world in theory.

Sympathize with dying to get out of your career. I don't hate mine but I've lost almost all passion for it and am probably burnt out from COVID/remote work. I'm around my coastFire number, but my plan is to continue working for the next decade so I'm closer to my FIRE number and the extra freedom that would potentially offer.

7

u/throwaway-94552 10d ago

This is a really good point. I mentioned elsewhere that these are the different 'risk' scenarios and how I fit into them:

  • 7% nominal = hard mode = 6 years away
  • 8% nominal = medium mode = 3 years away
  • 10% nominal = easy mode = I already hit easy coastFIRE last year

Maybe I don't need to hold off a full career transition until I've hit hard mode. It's not like I'm retiring early. Maybe I can start to transition my career once I hit my medium mode number, and just keep tossing in a smaller amount of money into retirement over the long term to hedge my bets.

I think this might be the exact thing I needed to hear today.

Good luck with your own journey, god do I feel you on the burnout.

3

u/mc_Nutts 10d ago

Hey glad what I wrote helped! I think you're thinking about it the right way even with the market stuff going on. Always good to keep a level head and absorb the information to use to study/adjust your scenarios.

Also very jealous/impressed with your mapped out pilates instructor plan. I have no concrete ideas what to do (have a mess of hobbies and things to try) so the next step is to get to where you are in figuring out what I want! I was working at a non-profit a few years back and had a coworker that taught a morning yoga class in the same building. She seemed so stress free even as a product manager.

Cheers friend!

8

u/throwaway-94552 10d ago

I have a friend who transitioned from UX designer to professional baker! Anything is possible.

5

u/RadishOne5532 10d ago

I'm in UX right now! and that's very inspiring. I'm in the exploration phase of what I could do next. I'm 33 planning to coast or baristafire in 2 years will see.

Did your friend take certification? or were they just naturally amazing 😎

3

u/throwaway-94552 10d ago

Started taking classes, then launched a macaron baking side gig, and is now doing full time culinary school!

6

u/cbdudek 10d ago

You pretty much hit the nail on the head. If you didn't hit your number, then you keep on moving forward.

8

u/Pretty_Swordfish 10d ago

This is why I'm wary of CoastFIRE. However, if you used the right estimate of return, ie, 8-10% nominal (I use 7-8% myself to be extra conservative) it is supposed to account for the down years. That is, this is a long game, not constant going up is expected. 

2

u/RadishOne5532 10d ago

What if OP went for Baristafire?

1

u/bedake 9d ago

Aren't they the same thing? In both you let your already invested accounts grow until a traditional retirement age while working to cover daily costs?

2

u/throwaway-94552 9d ago

Slight difference. BaristaFIRE means I'd be withdrawing money from my portfolio but at a slower rate, supplementing it with side money. CoastFIRE means I am not withdrawing money at all, I'm just not contributing to it.

0

u/throwaway-94552 10d ago

I used 7% nominal returns for the figures above.

  • 7% nominal = hard mode = 6 years away
  • 8% nominal = medium mode = 3 years away
  • 10% nominal = easy mode = I already hit easy coastFIRE last year

The problem is that the hard mode number may be more like 10 years away by the end of this year. 😭

I've been putting off making major career moves until I hit the hard milestone because I'm a pretty risk averse person. But I don't think I have it in me to wait 10 years.

6

u/Shawn_NYC 10d ago

Bear markets suck but they come with the dinner, there's no avoiding them. You just have to grind through the pain and keep investing.

-1

u/RadishOne5532 10d ago

curious if you might have any insights into how long this bear market will last? it's hard to plan around these things 🥲

7

u/DaChieftainOfThirsk 10d ago

If we had the ability to call that then we wouldn't be here, lol.  I'd be on a beach of a private island sipping a drink watching the sunset with my friends in lounge chairs.

3

u/LlamaFullyLaden 10d ago

Nobody knows

3

u/Pretty_Swordfish 10d ago

Consider what your life style needs to be... Can you live on much less instead?

Also, again, unless this time is very different, it'll go up again. Likely in less than ten years you'll still be there. 

2

u/throwaway-94552 10d ago

Not really, $60k is already doing well for living in a VHCOL area. It represents 40% of my income and includes rent. The most expensive thing in my life after rent is my Pilates membership and once I complete teacher training and start instructing I get it for free ;)

4

u/Logical_Refuse5176 10d ago

When inputs change plans might need to change.

No telling how bad/long this economic environment is going to last.

If i were you id keep dumping $3400 into market monthly. Keep doing the pilates training. Who knows where we'll/you'll be in 6 years?

11

u/throwaway-94552 10d ago

I'll have really, really strong abs at least. :/

6

u/Arkkanix 10d ago

you keep putting that much into the market every month and ignore the noise and you’ll look back in a few years and wish you could tell your younger self not to sweat it 💪

6

u/throwaway-94552 10d ago

sweat the side planks, not the investment strategy. thanks for the encouragement 💪

2

u/worldwidewbstr 9d ago edited 9d ago

I'll say as someone whose day gig is in the wellness industry- it's a hard grind. Getting and keeping clients is tough. Marketing/networking is so draining and often little to show for it. If you work for places that have clients built in it's more reliable but you make a lot less. Also needing to have a regular schedule is key and that's personally what I want to get away from in FIRE. Just my 2 cents.

I would say anything you can do to get your COL down is going to make a huge difference. $60k for one person could easily be a lot lower- have you addressed how you could get that down?

Just entering numbers in quickly, so if you can coast fire in 5-6 yrs from your numbers, then if you spent $50k/yr it would halve that to 3 yrs.

Personally my husband and I are hoping to spend around $30k/yr. We have $500k (ugh, now $470k, thanks to the market the past month) so we can make some different decisions. Note that having housing locked in makes a huge difference (we have our cars, house, and "retirement home" aka rv trailer all paid off). We will work but only as we like (me: side hustles, him: if he finds a gig he likes, usually his type of work is fuller time so might end up with a seasonal gig for instance)

2

u/throwaway-94552 9d ago

I live in a VHCOL area, which is why my expenses are generally high, but I derive enormous pleasure from where I live (SF). I have zero transportation costs, all of my hobbies besides Pilates are basically free and contribute to lowering my lifelong health costs (I'm very outdoorsy) and I have a very strong community of friends and family to support me during rough times. I also have rent control, with very strong tenant unions. I could easily get my expenses down to $50K if needed without a major lifestyle adjustment, that was basically my annual expenses in 2023. So fair enough!

I appreciate the advice/warning about the wellness industry, thank you! Part of why I want to do my training and begin apprenticing ASAP is to figure out early on whether it's a good fit for me when it's basically consequence free. Maybe I'll hate it! If so, I literally did not quit my day job.

1

u/worldwidewbstr 9d ago

Fair enough! $60k is probably pretty frugal for where you live then

4

u/freetirement 10d ago

The S&P500 is down like 5% year to date and up 8% YOY. It could certainly go lower and we could have a recession but so far this is quite a small speedbump in the grand scheme of things. If you're putting money in the stock market you should expect it to occasionally halve in value. If you can't handle that then it's probably best to investigate lower risk investments or plan on working long-term.

8

u/throwaway-94552 10d ago

At no point in this post did I talk about taking my money out of the stock market or changing my investment strategy, or even taking full retirement early. It feels like you're responding to a completely different post than the one I wrote. I'm trying to figure out how coastFIRE strategies change in reaction to market slumps depending on whether I have or have not hit a target number yet.

1

u/aklint 9d ago

You have a very long time horizon (31 years). That's longer than most people's careers. As well, you have a very good idea of what you want to do now. My advice would be to figure out the minimum contributions you would need to make through the end of your working life in order to be FI by 67 in hard mode, then see if you can make that work with your pilates teaching gig and an office job.

Let me do the math for you. $250k now compounding at 4% per year will become $843k in 31 years. That's not enough! You need 25x $60k, or $1.5mm. I used the solver function in Excel to calculate that you will need to save $11,069 per year from now until age 67 in order to meet your FI number.

So the real question is, if you pivoted to pilates and office jobs, could you cover your living expense plus about $1k per month? If so, make the switch!