What is Barista FIRE?
Barista FIRE means leaving full-time work once your investments can cover part of your spending, and a part-time job covers the rest. You don’t need a full early-retirement portfolio, just enough that withdrawals fill the gap. The name comes from the idea of working at a coffee shop for some income and health benefits.
It sits between Coast FIRE, where you stop saving but keep working full-time, and full FIRE, where your portfolio pays for everything.
“I’m 35 with $300,000 invested and save $1,500 a month. I spend $50,000 a year and could earn $20,000 part-time. When can I go part-time?”
At about age 45, when the portfolio reaches $750,000. Full FIRE would take until about 53. Try this scenario
How is the Barista FIRE number calculated?
Subtract your part-time income from your yearly spending, then divide by your withdrawal rate. Spending $50,000 with $20,000 from part-time work leaves $30,000 for the portfolio to cover. At 4%, that takes $750,000, compared with $1,250,000 to cover all $50,000 with no job at all.
Barista FIRE number = (spending − part-time income) ÷ withdrawal rate
Every $10,000 of part-time income cuts the target by $250,000 at a 4% withdrawal rate. That’s why even modest part-time work can bring the date in by years.
“Same plan, but I could earn $30,000 part-time.”
The target drops to $500,000, and you’d get there at about age 40. Try this scenario
How much part-time income do I need to quit now?
Take your spending and subtract what your portfolio can safely pay. With $500,000 at 4%, the portfolio covers $20,000 a year, so spending $50,000 needs $30,000 from part-time work. The results show this figure for your numbers, and the table shows how the target moves with different part-time incomes.
“I have $500,000 and spend $50,000 a year. What would part-time work need to pay for me to quit full-time today?”
About $30,000 a year, or $2,500 a month. Try this scenario
What about health insurance?
For many people it decides the plan. Leaving a full-time job often means losing employer coverage, so either the part-time job provides it, or you buy a marketplace plan and add its cost to your spending. Premium subsidies depend on income, so a lower part-time income can make coverage cheaper.
Count any benefits the job provides as part of its pay: if it saves you $6,000 a year in premiums, add that to your part-time income.
Barista FIRE vs. Coast FIRE vs. full FIRE
Coast FIRE: you’ve saved enough that growth alone reaches your retirement number, so you stop saving but keep a job that pays your bills. Barista FIRE: you leave full-time work, and withdrawals plus part-time pay cover your spending. Full FIRE: your portfolio pays for everything and work is optional.
Try the Coast FIRE calculator and the FIRE calculator to see all three dates for your own numbers.
“I’m 28 with $100,000 and save $1,000 a month. When could I go part-time on $20,000 a year?”
At about age 49, at a 5% real return. Try this scenario
Barista FIRE FAQ
What if my part-time income stops?
Then the portfolio has to cover more than it was sized for, and your withdrawal rate rises. Keep a cash buffer of a few months’ spending, pick work you can find again easily, and treat full FIRE as the long-term goal. Barista FIRE buys flexibility, not permanent safety.
Does Social Security count toward Barista FIRE?
Not at first, because it usually can’t start before 62. Once it does, it can replace the part-time income: if your benefit covers what the job paid, you can stop working without touching your plan. Use your ssa.gov estimate in today’s dollars to see when that happens.
Is Barista FIRE the same as semi-retirement?
Close. Both mean working less before you fully retire. Barista FIRE adds a number: savings large enough that withdrawals cover the gap between what you spend and what the part-time job pays, so you never have to go back to full-time work to make ends meet.
What return should I enter?
A real return, after inflation, since every amount here is in today’s dollars. For a mostly-stock portfolio, 4% to 5% is a common planning figure. Use a lower number to be cautious: it pushes your Barista FIRE date later but doesn’t change the number itself.
The formulas are on the methodology page. For how well a withdrawal rate held up in history, see the 4% rule, tested.
Sources
- William P. Bengen, “Determining Withdrawal Rates Using Historical Data,” Journal of Financial Planning, October 1994.
- HealthCare.gov, Lower costs on health insurance, on marketplace premium subsidies.
- Social Security Administration, my Social Security, for your benefit estimate.