Coast FI: How much do you need to invest to put your retirement on autopilot?

Keytrade Bank

keytradebank.be

October 07, 2026

3 minutes to read

More and more young people on Instagram and TikTok are calculating how long they need to invest before never having to save another cent for their retirement. They use a formula to do it: Coast FI. One wrong assumption in the calculation, however, can shatter your dream of early financial freedom.

Coast FI is a spin-off of the FIRE (Financial Independence, Retire Early) movement. Followers of the movement put a lot of money aside in order to stop working as soon as possible. Coast FI has a different target: the point at which your investments will grow by themselves without needing to add to the pot – until they reach the amount you'll need when you reach retirement age. You will then be able to sit back and relax, like a cyclist who stops pedalling and coasts down a hill.

You will continue to work to live, but saving for later in life is complete in principle. And that gives you the freedom to take on a lower-paid (but more exciting) job, do some part-time work or even go on a sabbatical. The term 'to coast' literally means to relax or continue under your own steam, and FI stands for financial independence.

Why the idea is catching on

The concept appeals to young people, in particular, who are unsure whether their pension will be sufficient later in life. In Belgium, such a fear isn't unfounded. On average, a Belgian pensioner receives a statutory pension of €2,046 gross per month (source). That amount is an average across all work systems – and employees and the self-employed generally receive a lot less than civil servants.

Whilst the statutory pension in Belgium is index-linked, it is largely protected against inflation. The capital you accrue yourself does not enjoy the same protection. A supplementary pension plugs some of the gap, but that isn't the case for everyone. Anyone who wants to maintain their standard of living must therefore set money aside themselves.

The formula

The calculation fits on the back of a beer mat:

Coast FI amount = target amount / (1 + r)t

Here, r is the expected annual return and t represents the number of years until you can retire.

Let's look at an example. A 35-year-old is due to retire at the age of 67, the legal retirement age from 2030. This means they have another 32 years in work. They want an additional €1,000 per month on top of their statutory pension. Following the popular 4% rule, you can withdraw 4% of your starting capital in the first year, then adjust that amount annually for inflation to make sure it lasts 30 years (source). This means they would need €300,000 (target amount) to generate €12,000 per year.

If they assume an annual return of 7%, they will arrive at a Coast FI amount of around €34,400. Anyone who invested that amount at the age of 35 would never have to invest another cent again. If that sounds too good to be true, it often is – and it is this element that tends to be overlooked on social media. Every link in the calculation deserves a closer look.

Link 1: The target amount is based on an unstable rule of thumb

The 4% rule dates back to 1994. The American financial planner William Bengen derived this 4% figure based on researching the history of the US stock market for a 30-year retirement. More recent studies are more cautious. In late 2025, Morningstar calculated that a retiree seeking to maintain their purchasing power for 30 years would, with 90% certainty, be better off starting at a rate of around 3.9% , and even then with a portfolio with an equity weighting of 30% to 50% (source). The same study conducted in 2021 had suggested a rate of 3.3%.

Moreover, a 30-year horizon is no exaggeration, either. Today, a 65-year-old Flemish man can expect to live another 19.8 years on average, while a woman can expect to live for another 22.6 years (source). But that is an average: a significant proportion of retirees live well beyond that. If you base your calculations on 3.5% rather than 4%, you will need around €343,000 for the same €1,000 a month, not €300,000.

Link 2: Inflation almost doubles your target amount

That €300,000 is expressed in today's money. Thirty-two years from now, the same amount won't have the same purchasing power. With inflation at 2% per year – the European Central Bank’s target – you would need around €565,000 to maintain the same purchasing power. Of course, this 2% inflation rate is not guaranteed. In 2022, for example, it shot up to 10.3% in Belgium (source).

Mathematically speaking, you can solve this conundrum with a return in real terms, by looking at the return after inflation. A nominal return of 7% amounts to approximately 4.9% when inflation is 2%. This means the Coast FI amount increases to around €63,000 – almost twice as much.

Link 3: The 7% is an American return, and is a thing of the past

The 7% that often does the rounds on social media is close to what the US stock market has returned at a historical level. US equities yielded a return of 9.8% per year on average between 1900 and 2025, or 6.6% after inflation (source). However, the US is the best-performing major stock market of the past century – not the average. In the same database, Belgian equities are among the poorest performers among all countries with a full history going back to 1900 (source). Anyone who invests their pension capital primarily in Belgian firms should therefore not expect returns seen by US companies. Global diversification also paid off. Since 1974, investors in the vast majority of countries have achieved a better risk/return ratio by adopting a global approach to investing, rather than only investing in their own country (source).

The horizon also plays a part. Since 2000, global equities have achieved an average return of 3.5% per year after inflation (source). That is a quarter of a century, and roughly as long as the horizon found in a Coast FI plan.

There is also a more subtle trap hidden in the word 'average'. A stock market that rises by 30% in one year and falls by 30% the next doesn't find itself breaking even after two years, but rather at -9%. The more volatile the prices, the greater the difference between the mathematical average and what you actually retain.

Even small differences in returns over 32 years will have a huge impact. If we examine the same €300,000 goal today, the Coast FI amount for our 35-year-old looks like this:

7% without taking inflation into account: around €34,400
5% in real terms: around €63,000
4% in real terms: around €85,500
3% in real terms: around €116,500

You have the same goal, yet the required starting amount for even the most cautious assumption is more than three times higher than the amount needed for the optimistic assumption. If you combine the conservative return assumption with the conservative withdrawal rule of 3.5%, you'll actually end up with around €133,000 – almost four times the amount that you started the calculation with.

Link 4: Fees and taxes eat away at your return

The formula is based on a gross return. In practice, however, you pay management fees, transaction fees and taxes. These costs are a heavy burden over a long period of time, too. People who pay one percentage point more in costs each year end up with about 25% less in assets after 32 years.

You also pay 30% withholding tax on dividends. What's more, 10% in capital gains tax has applied to realised gains on financial assets since 1 January 2026, with an annual exemption of €10,000 per person. After three decades, a Coast FI asset primarily consists of capital gains. People who spread sales across their retirement can use the exemption again each year.

But above all: you are basing your calculations on today’s tax rules for a thirty-year period. Capital gains on shares were still 100% tax-free for most private individuals at the end of 2025. You should remember that rules can change – and not always in your favour.

Link 5: Poor stock market years and the right time

Critics often warn that a stock market crash just after your latest deposit can scupper your plans. That train of thought is only partly correct. As long as you don't add more funds or take any out, the sequence of good and bad years doesn't matter when it comes to the end result. A crash in year three or year 30 yields the same amount after 32 years, assuming the average return remains the same.

Yet that will change as soon as you start making withdrawals. Anyone who sees a sharp fall in their first years of retirement and still sell every month to generate funds to live on, will drain their capital much faster than those who only suffer the same decline ten years further down the line.

The real risk lies elsewhere when building up your pension pot. The first one is that the stock market can simply yield less than you'd hoped over your horizon as a whole. The second risk is the human element. Those who sell in a panic after a sharp fall convert a loss on paper into an actual loss, while those who fail to make any additional investments miss out on the opportunity to buy at cheaper prices during a dip. Coast FI removes the mechanism that makes periodic investing so powerful.

Then there's life itself

Many young people work out their Coast FI figure when they are 25 or 30 – before they buy a house, have children or go through a divorce. How much you need in 30 years' time depends on your health, your situation at home, whether your parents need care or not and more.

The rules are also in a state of flux. The statutory retirement age rose from 65 years old to 66 years old in 2025. Anyone born from 1964 onwards can only retire at the age of 67 (source). Furthermore, in May 2026 the federal parliament approved a new pension law, which includes a penalty for anyone who takes early retirement without having worked for a sufficient number of days (source). In short, if you settle on a final amount today, you'll be aiming at a moving target.

So, how do you use Coast FI?

The concept is anything but worthless. In fact, it underlines a strong principle that the earlier you invest, the harder the return will work for you. The €10,000 you invest when you turn 25 increases to around €52,000 by the time you turn 67, at a 4% return in real terms. Investing the same amount when you turn 45 will only rise to around €23,700.

You should therefore think of Coast FI as a milestone on your journey, and not the final destination.

Exercise caution with your calculations. Use a return of 3% to 4% in real terms, a withdrawal rate of 3.5% and base your calculations on today's money.
Take stock of what you've already accrued. Your statutory pension, group insurance provided through your employer and your pension savings will reduce the gap that you'll need to plug. Pension savings allow you to benefit from a 30% tax break on deposits up to €1,050 per year, or 25% up to €1,350.
Diversify your investments around the world. Anyone who relies solely on Belgian or European shares is best not to count on the returns shown on the US stock market. A globally diversified portfolio makes you less dependent on a single country's fate.
Run calculations on an annual basis. Repeat the exercise every year and make adjustments in the event of changes in your life, fiscal situation or the markets.
Don't stop entirely. Those who reach their Coast FI amount can reduce the amounts they set aside. But even a modest €150 per month at a 4% return in real terms will grow to around €113,000 in today's money over 32 years. This represents a strong buffer against disappointing returns, and it keeps the savings habit alive.

Coast FI is therefore a useful calculation exercise that encourages you to get started early. Anyone who sees the number as a free pass to stop saving for good may well be getting ahead of themselves.

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