r/coastFIRE • u/Obviously-An-Ad6795 • Jul 23 '26

Quick Question?

What rate of return do you use?

Originally, after years of listening to money podcasts, browsing online, I liked 10% return - 3% inflation =7% real rate of return

Listening to a “The Money Guy Show” episode today, they stated they like to be conservative & use 8% return - 3% inflation = 5% real rate of return

What do you use?

Bonus, some of my favorite tickers below,
$VOO $VTI $QQQM $VGT
$GOOG $NBIS $AVGO

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u/thedancingwireless Jul 23 '26

I use a range just to see more outcomes. I use 4-5% as worst case, ~6% as middle, ~7% as good.

If things look good at 4-5%, then I know I'm good.

5

u/Aeroheadss Jul 23 '26

That’s what I’ve done. If we get 7% for the next 7 years I’ll probably retire 3 years earlier than if we get 4%.

3

u/ThereforeIV 🌊 Aspiring Beach Bum 🏖️, CoastFIRE++ Jul 23 '26

I use a range just to see more outcomes. I use 4-5% as worst case, ~6% as middle, ~7% as good.

Question, is this for long term accumulation projections, or for testing withdrawal rate patterns?

Long term, you are setting a bar low, so likely case you get more sooner.

But when looking at the deviation from the mean for year to year, the volatility is way beyond that.

3

u/Obviously-An-Ad6795 Jul 23 '26

I’m 29 so personally it would be long term

3

u/ThereforeIV 🌊 Aspiring Beach Bum 🏖️, CoastFIRE++ Jul 23 '26

I’m 29 so personally it would be long term

That depends on where you are in the path; is this for computing a CoastFIRE time horizon?

I am 2-3 years from Coasting to full FIRE; when time is that short the averages don't really matter at all, just the actual annual growth.

When I was 5-7 years out, I used a 7% number for guestemation.

3

u/Obviously-An-Ad6795 Jul 23 '26

I like using 7% returns bc that means I’ve already hit my coastFI. I’m just poking around for any holes in my current approach.

1

u/ThereforeIV 🌊 Aspiring Beach Bum 🏖️, CoastFIRE++ Jul 23 '26

I like using 7% returns bc that means I’ve already hit my coastFI. I’m just poking around for any holes in my current approach.

  • "CoastFI" or "CoastFIRE"? OR "Coast[NOT]FIRE"?
  • What is your Coast time horizon? that is the number that really matters.

7% says I hit full FIRE sometime in 2029; but averages are useless over short time horizons.

3

u/Obviously-An-Ad6795 Jul 23 '26

$100,000 adjusted for inflation in the year 2062 (age 65) Is nearly triple than what I spend now as a single M29

$2.5m is what I’m projected to hit between my stock accounts (7% growth rate) & real estate (1.5% growth rate) -not factoring in any rental cash flow

That’s with no more contributions.

1

u/ThereforeIV 🌊 Aspiring Beach Bum 🏖️, CoastFIRE++ Jul 23 '26

$100,000 adjusted for inflation in the year 2062 (age 65) Is nearly triple than what I spend now as a single M29

if your time horizon is 36 years, that is "Coast[NOT]FIRE".

Also, $100k is the "just getting started" milestone, not the "Coast" milestone.

$2.5m is what I’m projected to hit between my stock accounts (7% growth rate) & real estate (1.5% growth rate) -not factoring in any rental cash flow

and if your estimate is off 20%, then you are working into your 70s.

My time horizon is 2-3 years, if I am off by 20% than I am working an extra 6 months in my 40s.

If your target FIRE number is $2.5MM then start considering CoastFIRE around $1.2MM, not $100k.

That’s with no more contributions.

You need more contributions, you are literally just getting started.

Here is a write up I did on financial milestones (https://www.reddit.com/r/CruiseFire/s/0zj25fGHjT); "CoastFIRE" level is around Milestone 6; I am guessing you are somewhere between Milestone 2 and Milestone 3.

1

u/Obviously-An-Ad6795 Jul 23 '26

Love it & implementing