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New Zealand Coast FIRE Calculator

Free NZ Coast FIRE calculator. The amount you need invested today to coast to retirement without adding another dollar.

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The amount you need invested today to coast.

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The idea behind coasting

Coast FIRE is a quieter cousin of full financial independence. Instead of saving until your portfolio can fund your whole life, you save aggressively early, reach a point where the invested money is big enough to grow into your retirement target on its own, and then stop adding to it. From that moment your salary only needs to cover today’s living costs, not future saving. This calculator finds that threshold. It takes your retirement target at 65, your years until then, and an assumed real return, and discounts the target back to what you would need invested right now for compounding alone to finish the job.

It is the time-value-of-money formula run backwards. A future target divided by one plus the return, compounded over the years remaining, gives the present-day Coast FIRE number. The longer you have until 65, the more the eventual growth does the work, so the smaller the number you need today.

Coasting to $1 million from age 35

Take a 35-year-old who wants $1 million invested by 65 and assumes a 5 percent real return. They have 30 years for the money to grow. The tool discounts that $1 million target back across 30 years to find what a balance today would have to be to reach it untouched.

The result is striking: just $231,377 invested at 35, with not one more dollar added, compounds to $1 million by 65 at a 5 percent real return. Someone already holding $120,000 is a little under halfway, needing another $111,377 to lock in their coast. The curve below shows that single lump quietly quadrupling over three decades while the owner adds nothing.

Why your return assumption dominates

Of all the inputs, the return matters most, because it compounds over decades. Nudge the assumption from 5 percent to 6 percent and the Coast FIRE number you need today drops sharply, because faster growth means a smaller seed reaches the same target. That cuts both ways. Set the return too optimistically and you will declare yourself coasting on a balance that, in a weaker market, never reaches the goal. My advice is to use a deliberately modest real return, 4 to 5 percent for a growth portfolio, and to recheck the number every few years. Coast FIRE is not a one-time certificate; it is a status you can drift out of if markets disappoint, in which case you simply resume contributing for a while.

Tax and NZ Super in the background

Two New Zealand features make coasting easier than the bare number suggests. First, there is no general capital gains tax here, so the growth that carries your balance from $231,377 to $1 million is not eroded by a tax on the gain itself the way it would be in many countries. What is taxed is the income the fund earns along the way, and holding the money in a PIE fund caps that at a 28 percent prescribed investor rate. Second, NZ Super pays a guaranteed base income from 65 on top of whatever your portfolio becomes, so the private target you coast toward does not have to cover every dollar of retirement spending. Many people set their target lower once they factor in the pension, which lowers the Coast FIRE number further still.

Can my KiwiSaver count toward Coast FIRE?

Yes. KiwiSaver is just an invested balance, so include it in your current invested figure alongside any other funds or shares. The catch is access: KiwiSaver is generally locked until 65, so if your plan involves living off the portfolio before then, only the non-KiwiSaver part is reachable early. For a classic coast to 65, though, KiwiSaver fits perfectly, since 65 is exactly when it unlocks.

What is the difference between Coast FIRE and Barista FIRE?

Coast FIRE means you stop saving but keep working enough to cover current spending, letting existing investments grow untouched to 65. Barista FIRE means you semi-retire now and live partly off your portfolio while part-time work covers the rest. Coast is about pausing contributions; Barista is about starting withdrawals early. Many people pass through Coast FIRE first, then move to a Barista or full-retirement phase later.

Frequently asked questions

What is Coast FIRE?
Coast FIRE is the point where your invested savings are large enough that, with no further contributions, compounding alone will reach your retirement target by 65. After that you only need to earn enough to cover current living costs. In New Zealand, NZ Super at 65 reduces the private target you need to coast to.
Does KiwiSaver count toward my Coast FIRE number?
Yes. KiwiSaver balances count as invested savings for Coast FIRE purposes because both the KiwiSaver lock-in date and the standard Coast FIRE target age are 65. If you plan to retire before 65 and need portfolio access earlier, only your non-KiwiSaver investments are available in the years before the KiwiSaver withdrawal age. For a coast to 65 the full KiwiSaver balance is valid to include.
How does New Zealand tax affect Coast FIRE growth?
New Zealand does not have a general capital gains tax, so portfolio growth from share price appreciation is not taxed as the balance compounds. Income earned inside a PIE (Portfolio Investment Entity) fund is taxed at your Prescribed Investor Rate, capped at 28 percent, and the tax is paid by the fund so your returns already reflect it. KiwiSaver growth funds are PIEs by default. IRD rules for PIE income are set out in the Income Tax Act 2007 and are separate from your personal income tax rate.
What real return should I use for a New Zealand portfolio?
The Financial Markets Authority and various NZ KiwiSaver providers use 3.5 percent to 5 percent real (after inflation) for long-run growth fund projections in disclosure documents. The default in this calculator is 5 percent, which is toward the optimistic end. A 4 percent real return is a more conservative assumption for planning purposes. Whichever rate you choose, revisit the number every two or three years because sequence-of-returns risk means actual results can diverge significantly from any long-run average.

Related calculators

Sources

  1. Inland Revenue — KiwiSaver Contributions, Inland Revenue Department (Te Tari Taake), New Zealand
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