SCHD Coast FIRE Calculator

Calculate when you can stop contributing and let SCHD dividends power your path to financial independence

Your Financial Parameters

Personal Details

30
18 70
65
35 75

Financial Details

$100,000
$0 $2M
$24,000
$0 $100,000
How much you expect to spend annually in retirement (today's dollars)
$60,000
$20,000 $200,000

SCHD Investment Parameters

SCHD's current dividend yield is 3.91% as of May 2025
3.91%
2.00% 6.00%
SCHD's historical average dividend growth rate is ~11.44%
8.00%
0% 15%
Historical average: ~11.44%
6.00%
0% 15%

Retirement Parameters

Traditional FIRE uses 4% as a safe withdrawal rate for a 30-year retirement
4.00%
2.00% 6.00%
2.50%
0% 7%

Your Coast FIRE Results

Target FIRE Number: $1,500,000 Amount needed to retire
Coast FIRE Age: 45 When you can stop contributions

You're on track! With your current savings and SCHD's dividend growth, you can reach Coast FIRE at age 45. After that, you can stop contributions and your portfolio should grow to reach your retirement goal by age 65.

Retirement Projections

Portfolio at Retirement

$1,678,525
Age 65
Initial Investment: $100,000
Total Contributions: $360,000
Investment Growth: $1,218,525

Annual Dividend Income

$65,630
At Retirement
Retirement Expenses: $60,000
Income Coverage: 109%
SCHD Yield on Cost: 19.76%
Portfolio Growth
Dividend Income
Contribution Impact

Year-by-Year Breakdown

Age Portfolio Value Annual Dividends Contributions Milestone

Understanding Coast FIRE with SCHD

What is Coast FIRE?

Coast FIRE (Financial Independence Retire Early) is a milestone where you've saved enough money that, without any additional contributions, your investments will grow to support your retirement at your target retirement age.

Once you reach Coast FIRE, you can "coast" to traditional retirement by simply covering your current expenses without needing to save additional money for retirement. You've front-loaded your retirement savings, allowing compound growth to do the heavy lifting.

Coast FIRE Formula

To calculate your Coast FIRE number:

  1. Calculate your target retirement number: Annual Expenses รท Safe Withdrawal Rate
  2. Calculate what your current portfolio would grow to by retirement age with no additional contributions
  3. If this future value equals or exceeds your target retirement number, you've reached Coast FIRE

Why SCHD for Coast FIRE?

SCHD (Schwab U.S. Dividend Equity ETF) offers several unique advantages for a Coast FIRE strategy:

Dividend Yield
3.91%
Dividend Growth
~11.44% (5-yr)
Expense Ratio
0.06%
Quality Focus
100 Stocks
  • Growing Dividend Stream: SCHD's rising dividend payments help offset inflation and can eventually provide retirement income
  • Quality Companies: Focus on financially strong companies with sustainable dividends
  • Compound Growth: Reinvested dividends accelerate portfolio growth
  • Low Expenses: Minimal drag on returns with a 0.06% expense ratio
  • Potential Income Replacement: Eventually, SCHD's dividend income alone could cover retirement expenses

Implementing a Coast FIRE Strategy with SCHD

Phase 1: Accumulation

Aggressively save and invest in SCHD during your early working years. Maximize contributions until reaching your Coast FIRE number.

  • Maximize retirement account contributions
  • Invest additional funds in taxable accounts
  • Reinvest all dividends automatically
  • Focus on increasing savings rate
  • Track progress toward Coast FIRE goal

Phase 2: Coast Period

After reaching your Coast FIRE number, you can reduce or eliminate retirement savings while continuing to work to cover current expenses.

  • Stop contributing to retirement accounts
  • Consider reducing work hours
  • Pursue more meaningful work
  • Continue to reinvest dividends
  • Monitor portfolio growth periodically

Phase 3: Retirement

When you reach your target retirement age, your SCHD portfolio should have grown sufficiently to support your retirement expenses.

  • Stop reinvesting dividends
  • Use dividend income for living expenses
  • Sell shares as needed to supplement
  • Maintain a safe withdrawal rate
  • Continue to benefit from dividend growth

Key Considerations

Consideration Details Strategy
Market Volatility Stock markets, including SCHD, will experience ups and downs Use a conservative growth rate in your calculations; consider a larger safety margin
Inflation Risk Higher inflation can erode purchasing power over time SCHD's dividend growth helps offset inflation impact over long periods
Healthcare Costs Medical expenses often rise faster than general inflation Consider a higher annual expense estimate or specific healthcare savings
Tax Implications SCHD dividends are qualified (lower tax rate) in taxable accounts Strategic account placement (taxable vs. tax-advantaged) based on time horizon
Sequence Risk Poor returns early in retirement can deplete portfolio faster SCHD's dividend focus provides income without requiring principal sales

Frequently Asked Questions

How is Coast FIRE different from traditional FIRE?

Traditional FIRE (Financial Independence, Retire Early) requires accumulating enough assets to fully retire early, typically 25-30 times your annual expenses. With traditional FIRE, you stop working completely once you reach your target.

Coast FIRE is a milestone on the path to traditional FIRE. You've saved enough that your investments will grow to support traditional retirement without additional contributions. You still need to work to cover current expenses, but you don't need to save for retirement anymore.

Think of Coast FIRE as reaching the summit of a mountain and then being able to "coast" downhill the rest of the way, while traditional FIRE is reaching your final destination.

Is SCHD the best ETF for a Coast FIRE strategy?

SCHD has several characteristics that make it well-suited for a Coast FIRE strategy:

  • Strong focus on quality companies with healthy financials
  • Consistent dividend growth history (averaging ~11.44% over recent 5-year periods)
  • Low expense ratio (0.06%) that minimizes drag on returns
  • Diversification across multiple sectors
  • Qualified dividend tax treatment for tax efficiency

However, the "best" ETF depends on your personal financial goals, risk tolerance, and time horizon. Some investors may prefer:

  • VTI for broader market exposure
  • VIG for a stronger focus on dividend growth (vs. current yield)
  • A combination of multiple ETFs for greater diversification

SCHD offers a balanced approach that provides both current income and growth potential, making it a strong candidate for Coast FIRE strategies.

What are the main risks of a Coast FIRE strategy with SCHD?

While SCHD can be a valuable tool for Coast FIRE, there are several important risks to consider:

  1. Market Risk: SCHD is an equity investment and will experience market volatility. A prolonged bear market could significantly set back your Coast FIRE timeline.
  2. Dividend Cut Risk: While SCHD focuses on quality companies with sustainable dividends, economic downturns could lead to dividend reductions across multiple holdings.
  3. Concentration Risk: SCHD is focused on U.S. dividend-paying stocks, missing exposure to international markets and growth-oriented companies.
  4. Inflation Risk: If inflation significantly exceeds expectations, your Coast FIRE number may prove insufficient for retirement needs.
  5. Changing Expenses: Your anticipated retirement expenses may increase due to lifestyle changes, healthcare costs, or other factors.
  6. Tax Policy Changes: Future tax law changes could affect the tax treatment of dividends or investment gains.

To mitigate these risks, consider building in a safety margin, diversifying across multiple assets, periodically reviewing and adjusting your plan, and potentially making small additional contributions during your Coast phase if financial circumstances allow.

How does dividend reinvestment impact Coast FIRE with SCHD?

Dividend reinvestment plays a crucial role in a SCHD Coast FIRE strategy:

During Accumulation Phase: Reinvesting dividends accelerates portfolio growth through compounding. SCHD's dividends are automatically used to purchase additional shares, which themselves generate more dividends. This compounding effect can significantly reduce the time needed to reach your Coast FIRE number.

During Coast Phase: Continuing to reinvest dividends while coasting maximizes the growth potential of your portfolio. Each reinvested dividend increases your share count, which increases future dividend payments in a virtuous cycle.

During Retirement: In retirement, you'll likely stop reinvesting dividends and instead use them for living expenses. However, the larger share count you've accumulated through years of dividend reinvestment will provide more income than if you hadn't reinvested.

Our calculator assumes dividends are reinvested until retirement, which is typically the most efficient approach for maximizing long-term growth. If you plan to use dividends for income during your Coast phase, you'll need a larger initial Coast FIRE number to compensate for the reduced compounding benefit.

Should I combine SCHD with other investments for Coast FIRE?

While SCHD can be a strong foundation for a Coast FIRE strategy, diversification across multiple assets is generally prudent. Here are some diversification strategies to consider:

  • Broader Market Exposure: Combining SCHD with a total market ETF like VTI gives you exposure to growth-oriented companies that don't pay significant dividends but may offer higher capital appreciation.
  • International Diversification: Adding international dividend ETFs like VIGI or SCHY provides exposure to global dividend-payers, reducing geographic concentration risk.
  • Fixed Income Allocation: Including bonds or bond ETFs like BND can reduce portfolio volatility, which becomes increasingly important as you approach retirement.
  • REITs: Real estate investment trusts can provide additional income diversification and potential inflation protection.

A common approach is to start with a more aggressive, equity-heavy portfolio during your accumulation phase, then gradually increase allocations to more conservative investments as you approach retirement. The specific mix depends on your risk tolerance, time horizon, and financial goals.

Related Calculators

SCHD Dividend Calculator

Calculate potential dividend income and growth from your SCHD investment over time.

Use Calculator

SCHD Dividend Reinvestment

See how dividend reinvestment can accelerate your wealth growth with SCHD over time.

Use Calculator

SCHD vs JEPI Calculator

Compare the performance and income potential of SCHD and JEPI ETFs with custom inputs.

Use Calculator