Coast FI as a Late Starter to FIRE

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When I first came across the term “Coast FI”, I assumed that it meant living a FIRE lifestyle somewhere along the coast, perhaps near a beach. What a dream!

It is one of the many terms in the FIRE community, signifying the different levels of FIRE you can aim for – Lean FI, Fat FI, Slow FI, Barista FI, Flamingo FI and so on.

Me? I was just aiming for ordinary FIRE, or as close to FIRE as someone starting late could hope for!

What is Coast FI?

Four Pillar Freedom explains it as “having enough money invested at an early enough age that you no longer need to invest any more to achieve financial independence by age 65 (or whatever age you define as a retirement age)”

That is, you coast to financial independence once you’ve saved up enough money for it to grow by compound interest to the sum you need at traditional retirement. In the meantime, you just need enough income to support your current lifestyle without worrying about saving for your retirement.

Pretty neat, huh?

Except the bit about invested at an early enough age …

Well, that rules me out.

I am a late starter at all this investing and pursuing FIRE as I didn’t discover FIRE until my late forties.

So I dismissed the idea as interesting but unachievable.

Then Professor FIRE shared his story on the Late Starter to FI series, explaining that he is essentially at Coast FI despite starting late. Again, I dismissed it as a possibility for myself because I wasn’t earning a big enough salary.

Now, a couple of years after reading Four Pillar Freedom’s post on Coast FI, I think I’ve achieved this very milestone!

I’ve arrived at Coast FI as a late starter, woohoo!!!

How, you ask?

Super, baby, super! Or superannuation, Australia’s retirement account.

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Superannuation in a nutshell

The government mandates the minimum percentage of your gross salary that your employer must pay into your superannuation account. This is known as the Superannuation Guarantee and is set at 9.5% currently. There is considerable debate at the moment about whether it should be raised to 12% or whether employees would be better off with an increase in wages.

This contribution is taxed at 15% instead of your marginal income tax rate. Any investment returns is also taxed at 15%.

The current income tax rates in Australia are:

Up to $18200              Nil

$18201 – $45000        19%

$45001 – $120000      32%

$120001 – $180000    37%

$180001 upwards       45%

Therefore, the government has made it attractive for you to contribute to superannuation and save for retirement.

But wait, there’s more!

Once you are able to access your money in retirement, it can be withdrawn tax free and any investment returns in this pension mode is also tax free. There is a limit of $1.7 million ($1.6 million before 1 July 2021) that can be converted to this pension mode.

Of course there is a catch! And the catch is that … you can’t access your super until you are 60 (if you are born after 1 July 1964).

And because of this inaccessibility plus the automatic employer contribution, many forget that the money sitting in superannuation is YOUR money (ahem, I fell into this category!) And that investing it well is an important retirement strategy, whether you retire earlyish or not.

Back to my story

When I first started working nearly thirty years ago, superannuation was a new concept in Australia. Compulsory employer contribution had just been legislated. I knew nothing about it.

A family friend nagged me to open a second account (with AMP) ie an account that is not connected to my employer. I remember asking only one question – can I stop contributing if I don’t have the spare cash? Yes, he said, it’s up to you. So I agreed to open an account, knowing I have an escape hatch.

Every year I would contribute about $2000 after tax to this account. I never read the annual statements or cared abut how the money was invested. I just remember that I always resented forking over $2000 or so (it increased by inflation) every year.

All I cared about in my early twenties was saving enough money to go on overseas holidays and eventually buy a house. Retirement was an eternity away.

And yes, I eventually bought a house and had a mortgage. My intention was to pay off my mortgage as quickly as I can. So I stopped contributing to this extra superannuation account. After all, I needed every cent.

But I kind of got used to having debt. Everyone (except my parents) told me that having debt was normal, that some people never paid off their debt until they retire. So it is perfectly ok to travel and live a fine life while paying off your mortgage.

This is exactly what I did. I bought nice things for my house. And travelled overseas. I enjoyed my life. And stopped investing. Duh! This is one of my biggest money mistakes.

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Fast forward to my 40s ...

The year I turned 47, to be exact.

I still remember vividly that morning in January 2018 when I woke up in a cold sweat … I was terrified that retirement was suddenly on the horizon and that I probably hadn’t saved enough to retire at the traditional retirement age. My job was so stressful at the time that the thought of working another 20 years was truly out of the question.

I scrambled out of bed and searched through folders of annual statements to find my account numbers. And set up online log ins. My combined balance from the two accounts was … disappointing. I did not have anywhere near enough to what the retirement experts say you need in retirement.

Fortunately I had just paid off my mortgage. That was the only plus in my favour. Because it meant I have cash to invest in something.

A friend gave me The Barefoor Investor by Scott Pape. In one of the steps, he advised contributing extra to superannuation, up to 15% – ie a top up of 5.5% if your employer contributes 9.5%.

So I decided to ‘do something’ with my super.

Optimising my superannuation

Having two super accounts meant paying two lots of administration fees. So I closed the AMP account and rolled over the balance (minus a hefty penalty) to my main account, REST.

After more reading about industry funds, I chose to roll over to yet another fund (Hostplus) with lower administration fees and the ability to choose index funds to invest in, which lowers management fees even more.

The lower the fees, the more of the investment returns I get to keep.

My next step was to salary sacrifice. That is, I contribute pre taxed dollars to the maximum of $25000 (which also includes my employer’s contribution).

I didn’t have enough time in the 2017-18 financial year to fully achieve this but I did it for the following two years. Because the pandemic affected my returns dramatically, I continued salary sacrificing for the first six months of the 2020-21 financial year.

However this meant that I didn’t have as much as I’d like to invest outside of super.

If I want to retire at 55 (and I really, really, really want to, believe me!), I need to build my ‘bridge the gap’ fund that will support me from age 55 to 60, until I can access my superannuation.

It is a delicate balance between having enough in super to cater for my sunset years (60 years old onwards) and having enough to survive in the five years before I can access super while retired.

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Rule of 72

The Rule of 72 is a quick, useful formula that is popularly used to estimate the number of years required to double the invested money at a given annual rate of return – Investopaedia

I utililised the rule of 72 initially to estimate when I can stop salary sacrificing so much into super.

My reasoning is as follows.

I have 10 years before I can access super. I have an end figure in mind that will support me for the rest of my life from 60 onwards, based on the 4% rule and my expenses.

In order for my balance to double in 10 years, my annual rate of return need to be 7.2% (after fees and taxes).

Is that feasible? I think so.

Despite the tumultuous year of 2020, when my balance plummeted by 30% in March, it has since climbed back up and exceeded all expectations.

The three funds that my super is invested in all returned more than 7% per annum since inception (including 2020). And while past performance doesn’t guarantee future performance, it is a good indication.
Therefore I need my super balance to reach the half way mark, with 10 years to reach preservation age. That is, even if I didn’t invest another cent, as long as the average annual growth is 7.2% for the next 10 years, it will grow to my desired final balance.
And isn’t that the definition of Coast FI?


What ifs?

I’ve done the calculations a million times.

But just in case I got it wrong or the stock market does not cooperate, there are contingencies.

Since I plan to work for the next five years, my employer will be contributing at least 9.5% of my gross salary into my super.

And I am also still salary sacrificing but only less than a third of what I did when trying to contribute the maximum.

I will continue to monitor and review its progress. If the balance is not growing according to plan, I will increase my salary sacrificing again.

The worst case scenario is that I work a couple of shifts a week and not fully retire at 55, contributing all earnings to shore up my super balance.

Or I delay withdrawing from super for a couple of years, if I can survive on funds outside super. The next three years will be crucial in building this ‘bridge the gap’ fund.

So what contributed to my arrival at Coast FI, even as a late starter to FIRE?

(a) That second superannuation account

While I was initially disappointed by the combined value of my super balance, I should be happy with my younger self, on further review.

I calculated at best, I would have contributed around $20k – $25k to this AMP account before I bought my house. I then stopped contributing for at least 15 years. When I checked the balance in 2018, it was a whopping $80k! This was not an industry fund so fees would have been high. And the Global Financial Crisis was smack bang in the middle of it all.

While $80k is nowhere near what I need in retirement, it is good ‘seed’ money and I am grateful to my younger self.

(b) Boosting contributions

Salary sacrificing was tough at times but I am so glad I did it. Those two and a half years boosted my balance so it was totally worth it. There really is no other choice as a late starter. With a shortened time frame, all I can do is throw in as much as I can.

 (c) Investing in low cost funds within super

Looking at my most recent super statement, I paid 0.04% in fees (indirect costs, other fees and administration fees). This means I get to keep more of the investment returns instead of paying others.

(d) The stock market cooperated

While this was totally out of my control, I am grateful that the share market has cooperated! Investing in shares in the long term will pay off one day.

Final thoughts

I wasn’t aiming for Coast FI specifically. And I certainly never believed that Coast FI was possible as a late starter.

But I can tell you that despite all that, arriving at Coast FI is liberating!

I can relax a little, knowing that one phase of my retirement plan has been taken care of.

Now, I’m off to build that ‘bridge the gap’ fund.

And oh, trust in the math!

Have you arrived at Coast FI yet? Did you or will you do anything differently when you achieve(d) the milestone?

2020 goals – with an eye on the decade ahead

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Much has been written everywhere about the decade that was and the decade  ahead. Ten years seem such a long time to wrap my head around, let alone plan for.

Maybe that is why I am having so much trouble deciding what to focus for this year 2020 only, when this whole decade seems to loom large ahead.

Thinking too far ahead causes me anxiety. I am paralysed instead of energised by all the possibilities. As a result, I tend to avoid thinking really long term as much as possible. I don’t want to set myself up to fail.

Except now that I have discovered FIRE (Financial Independence and Retire Early) concepts, I do think long term about my financial goals. My age has caught up with me anyway. In my late forties, retirement is only years away, not ages and ages away. I really have no choice but to think a bit long term financially.

I hope to transfer this financial long term planning to other areas of my life. And so I decide I should have goals for 2020, but with an eye on the decade ahead as well.

Goals for the decade

I am binge listening to Jillian Johnsrud on her new podcast Everyday Courage. In episode 4, she talks about how we don’t give ourselves enough time to achieve our goals, that we get disappointed and throw in the towel because we did not achieve them in a year. That is me!

She shares a quote attributed to Bill Gates – “People overestimate what they can accomplish in a year and underestimate what they can accomplish in 10 years.”

So for the first time ever, instead of having vague goals for the future, I will nail down three big dreams that excite me.

Drumroll please! My 3 goals for the decade are:

(1) Retire (end of 2026 or mid 2027 ie before I turn 56)

(2) Visit Antartica

(3) Run a marathon

Retire at 55

You will notice that only retiring has a timeline – that is because I already have a plan in place to retire at 55. It is so much easier to automate weekly deductions into retirement accounts than it is to automate daily exercise! 

Knowing that this next decade will signal retirement makes me feel excited and apprehensive at the same time.

Excited? Because I will have free time all the time when I retire, yay! All that sleeping in without any regard for alarm clocks. Staying up late just because I can – no need to get to bed earlyish so I can get up earlyish. Now that is heaven to me 🙂

Apprehensive? It is a HUGE change in lifestyle. What if I can’t get there in the time frame I want (ie within the next 7 years)? What if having all that free time is a drag?


Visiting Antartica has been a dream for a long time. There is something about the starkness of the environment, the remoteness, the cold and the wildlife – penguins, in particular, that just ignite my imagination.

It cost A LOT though, so I need to budget for it within my retirement figures. Or visit within the next 7 years while I am still working. Saving up for this expense will give me time to research alternative methods of getting there, if there are any.

Run a marathon

Out of the above 3 goals, running a marathon will be the hardest. Why? Because I don’t like exercising.

But I need to exercise for my health – my cholesterol was the highest it had ever been last year. I have run 10km fun runs before. Running a marathon will be a massive personal challenge. I want a big goal to aim for and get excited about, when I am struggling to get out of bed to run in the mornings.

I also admire the grit and sheer mental strength it takes to complete a marathon.

This is definitely a stretch goal, haha.

So what about 2020?

In episode 9* of Everyday Courage, Jillian chats to David Cain from  They discuss David’s post ‘Go Deeper, Not Wider’ that he wrote in December 2017 (which received 58 000 shares!). It is about a ‘Depth’ year – a year where you don’t start anything new but explore more deeply the stuff you already have.

“No new hobbies, equipment, games, or books are allowed during this year. Instead, you have to find the value in what you already own or what you’ve already started. You improve skills rather than learning new ones. You consume media you’ve already stockpiled instead of acquiring more.”

This really speaks to me. I am someone for whom the thrills of something new always appeals. These days, it may not be new physical stuff but I am endlessly attracted to new ways of thinking, productivity hacks, how to be more efficient etc.  What can I say? I just have a short attention span and get bored easily.

So with Jillian’s and David’s combined wisdom, I want to do my own version of deeper, not wider in 2020.

How will I achieve my goals?

My favourite book of 2019 was James Clear’s Atomic Habits  (affiliate link) – I even wrote a review of it.

Habits is my word for 2020. And this is why – as articulated by James Clear on Twitter:

In 2020, I will build good habits in the areas I want to focus on, to take me through the decade ahead. I want to focus on consistency, not intensity. And I am done with motivation and will power (or lack thereof). I want to embrace the process, not focus on outcomes. In other words, I want to focus on the journey, not the destination.

So what are my 2020 goals?

(1) Exercise and stretch daily

Health is everything. And I would argue, perhaps more important than wealth. Without my health, I will not be able to enjoy my wealth to the fullest. I want to be able to use all that moolah!

My goal is to be consistent this year – run and/or walk everyday and stretch daily. I am notoriously bad at stretching. As a result, I see the osteopath for regular tune ups every 2-3 months. I can save this money if I make the effort to stretch my muscles daily.

I haven’t been motivated to run ever since I completed last year’s Run for the Kids fun run. There is just enough time to start training for this year’s event. The goal is to continue running after the event, through winter. Yuck!

This is where I need to create a new habit … or tell myself I am a runner, therefore I run.

(2) Journal daily

I started this well last year as I desperately needed to find clarity – writing helps me sort through my jumbled thoughts.

But I wasn’t very consistent.

So once again, I will use the lessons learnt in Atomic Habits to be consistent and incorporate it into my morning and night routines.

This is still a goal as living an intentional life is a perpetual goal and I need to be in touch with me to do that. For too many years, I lived a stress filled life and just survived day to day. I never want to go back to that way of life.

(3) Read more

This is not a new hobby.

I’d forgotten how much I enjoyed reading fiction. Since discovering FIRE, I have read mainly personal finance blogs and books.

During my time off after my extended family had gone home on New Year’s Day, I read (and listened) to 6 books, 2 of which were related to personal finance. I was astounded. I have got my reading mojo back!

My goal is to read 20 books this year.

(4) Be more sustainable

I installed solar panels at the end of 2018 and as a consequence, reduced my electricity bill significantly. I paid less than $150 in total in 2019. Some of my colleagues who installed their panels (albeit with slightly larger systems than mine) managed to pay nothing at all ie they produced more electricity than they needed.  So I can still improve in this area.

What I desperately need now is to reduce my water and gas consumption. While this will be good for the planet, it will have financial benefits too. Gas prices have doubled in the last 5 years.

And I will look at reducing my use of plastic, just starting small. For example, not buying any fresh fruit and vegetables wrapped in plastic and use a shampoo bar instead of shampoo and conditioner in plastic bottles.

(5) Declutter

This has defeated me every year. For many years.

Marie Kondo, Joshua Becker (Becoming Minimalist) etc – I just read, agree and then not take any action!

I considered not putting this as my goal this year but I decided that in this year of diving deeper, I will tackle it again. It ties in well with reducing plastic, having less stuff generally. I am pretty good about not introducing new stuff into my house but I can’t seem to part with the stuff I do have which I don’t use.

I will start small just by keeping my kitchen bench clutter free – this will be a huge effort as it is my ‘dumping ground’, haha.

This may be the year to learn how to sell stuff online. Or just donate them.

(6) Financial goals

My main goal is to retire at 55 – I have a 7 year timeline.

In order to achieve this goal, I need to:

(a) Invest $25000 annually into my shares portfolio 

This is a challenge this year as my salary is now reduced due to transitioning to a lower stress role since July 2019.

My focus is to find every bit of extra cash and throw at it. This is important because the majority of my net worth is tied up in my house and superannuation, neither of which I can use to sustain me from 55 to 60.

(b) Maintain salary sacrificing into superannuation (retirement account) until end of financial year in June then reduce the amount

My rationale is that based on existing fund balance, it will grow to the desired amount by the time I can access it at 60 years old, if the fund can maintain a growth rate of 7%. 2019 was an amazing year – not sure 2020 will come anywhere close. So I will review the balance at at the end of June and decide. I do need every spare cent to increase my shares portfolio.

(c) Aim for a savings rate of 50%

My overall savings rate was 40% (based on after tax pay) in 2019. I did not feel deprived in any way so I think I can still do better. And that was with 2 overseas trips.

This year, I will have one trip only –  to visit family in  London and attend a wedding Toronto. My challenge is to find less expensive accommodation especially in London. House sitting is not a good fit personally as I am not great with animals. I use my Qantas points for airfares so airfares will not blow the budget.

I am also hoping my utility bills should reduce as a result of reducing my water and gas consumption. This is part of my overall plan to reduce recurring costs such as home insurance and private health insurance.

I started a vegetable garden last year. The benefits were more than financial – the well being and relaxation from pottering around and watching plants grow then eating the fruits of your labour cannot be overstated. I will attempt to reduce costs this year by learning how to plant with seeds instead of buying seedlings.

And I have started to compost this year – this is an attempt to reduce my waste going to landfill plus I should save some money from not buying as much proprietary potting mixes, organic compost and the like.

And if I am successful in decluttering and learn how to sell stuff online, I just may be able to reach my aim of 50% savings rate. We’ll see.

Final thoughts

Phew! We come to the end, at last.

I will not be tackling the above goals with the same intensity all at once. Instead this year, I will ‘lean in’ to 3 goals every 3 months and as I develop the habits I need to succeed, I will move on to the next 3 goals. Thanks, Jillian – episode 10* of Everyday Courage.

So until the end of March, I will focus on exercising and stretching daily, journaling daily and becoming more sustainable. I will keep you up to date with my progress – it will give me an incentive to track my progress which I wasn’t so good at last year. So you can keep me accountable.

Deciding what to focus on in 2020 has taken most of my January! I am really looking forward to diving deeper into my 2020 with no new hobbies or philosophy.

How about you? Have you set goals for the decade ahead in addition to 2020? 


*A note on Everyday Courage podcast – a new episode is released every Monday and at the time of publishing this post, episodes 9 and 10 have not been released. I signed up to get the whole season plus a workbook so I could work through them  over 10 days or so.