Coast FIRE Calculator With Inflation

The calculator above handles inflation by keeping everything in today’s dollars. It converts your expected return into a real return, (1 + return) ÷ (1 + inflation) − 1, and grows your money at that rate, so the spending you enter, the Coast FIRE number and every balance on the chart mean what they’d buy at today’s prices. With the default 7% return and 3% inflation, the real return is 3.88%.

The Assumptions panel is open so you can see those three inputs. The return is what you expect before inflation, the way fund returns are usually quoted. The inflation rate is what the calculator takes back out.

Why work in today’s dollars at all?

Because nobody knows what $60,000 will buy in 2058, but you know what it buys now. If you plan in future dollars, you have to inflate your spending, grow your savings at the full return, and then mentally shrink the answer back down to see whether it’s enough. Working in real terms does the same math with fewer places to go wrong.

The two approaches give the same answer. Take Colette, who is 33, has $85,000 invested, adds $2,000 a month and wants $60,000 a year from 65. At 3% inflation, that $60,000 will cost about $154,505 a year by the time she retires. Inflate her spending by that much and discount at 7%, or leave it alone and discount at 3.88%, and her Coast FIRE number is $443,202 either way. The spreadsheet version of both routes is on our Coast FIRE formula page.

One consequence is easy to miss. When the chart shows Colette at $1,500,000 at 65, her actual account statement should say something much larger. The chart shows that money in today’s buying power, which is the number that tells her whether she can retire.

What goes wrong if you mix nominal and real?

Your Coast FIRE number comes out wildly wrong, and not by a few percent. Here’s Colette’s plan run through the calculator three ways:

The second row is the classic mistake. It treats a 7% return that includes inflation as if all of it were real growth, and it tells Colette she can stop saving at 37. She’d stop saving roughly 18 years too early and find out in her 60s. A calculator with one return field and no inflation input makes the same assumption, so it’s only right if you type in a real return yourself.

The third row is the opposite mistake. If you’ve read that stocks return “about 4% after inflation” and enter 4% as the return, then leave inflation at 3%, the calculator takes inflation out a second time. Colette’s number balloons to $1,101,072 and she never gets there. If you want to enter a real return directly, set inflation to 0%.

The spending field has the same trap. Enter $154,505, her spending in future dollars, while inflation is at 3%, and the calculator inflates it again: her Coast FIRE number jumps to $1,141,281.

What inflation rate should you use?

The Federal Reserve aims for 2% inflation over the longer run, measured by the price index for personal consumption expenditures. That’s a target, not a promise, and it’s a different index from the consumer price index that most people think of as inflation.

The long-run record is a little higher. The Bureau of Labor Statistics’ CPI-U series had an annual average of 9.9 in 1913 and 321.943 in 2025, which works out to about 3.2% a year compounded. Over the 30 years from 1995 to 2025 it averaged about 2.5%.

Small differences here move the result more than people expect:

I’d keep the default of 3%. It’s close to the century-long average, it’s above the Fed’s target, and it builds in some margin for the fact that your own costs may not follow the index. Using 2% because that’s the target is the optimistic case, and I’d only do it next to a run at 3% so you can see the range.

Keep in mind what the inflation input really does. It only matters through the real return, so dropping inflation by half a point has the same effect as raising your expected return by about half a point. If you’ve already been conservative on the return, you don’t need to be doubly conservative here too.

What does “today’s dollars” mean for your spending?

It means pricing your retirement at current prices. If the life you want at 65 would cost $60,000 a year if you started it tomorrow, enter $60,000. Don’t add anything for inflation; the real return already does.

The monthly contribution works the same way. The calculator treats $2,000 a month as $2,000 of today’s money, which means it assumes your contribution rises with prices each year. If you’ll keep putting in the same flat dollar amount for decades, your real contribution shrinks and the Coast FIRE age shown is a little optimistic. Raising your automatic transfer once a year by roughly the rate of inflation keeps the plan honest.

How do Social Security and pensions fit in?

Social Security already rises with inflation. Each year’s cost-of-living adjustment is based on the rise in the CPI-W, a consumer price index for urban wage earners and clerical workers, so a benefit estimate in today’s dollars should stay roughly in today’s dollars. That’s why you can subtract it from your spending without adjusting it. The Social Security version of this calculator does that and covers the years before your benefit starts.

A pension without a cost-of-living adjustment is different. It pays the same number of dollars every year, and at 3% inflation those dollars buy about 41% as much after 30 years as they did at the start. Counting it at face value in a today’s-dollars plan overstates it. Averaged over a 30-year retirement, a flat pension is worth about 67% of its first-year amount at 3% inflation, and our Coast FIRE calculator with a pension makes that adjustment when you tell it the pension has no COLA.

Where this calculator falls short

It uses one inflation rate for every year until you retire, and real inflation comes in bursts. A few years when prices jump and your investments don’t keep up leave you behind in real terms, even if the long-run average turns out fine. The Monte Carlo calculator varies real returns from year to year, which captures some of that. The calculator also doesn’t know which of your costs will rise fastest, so if you expect health care to be a big part of your retirement budget, I’d build some extra into the spending figure rather than lowering the inflation rate.