FIRE
Barista FIRE
Barista FIRE uses part-time or benefits-eligible work to cover some spending so the portfolio can be smaller.
Model side income in the Coast calculator
The name comes from the idea of a part-time job with health benefits, not from a requirement to work in a café. The portfolio only has to cover spending the job does not cover. If you spend $70,000 and a part-time job pays $30,000, the portfolio's job is $40,000 a year. At a 4% withdrawal rate that is a $1 million target instead of $1.75 million. The job has to actually exist, and it has to last as long as you counted it.
Count the job honestly
- Net the pay. Commuting, payroll tax, and a smaller retirement contribution are real.
- Do not treat a pleasant idea of part-time work as income. Name the role, the hours, and the pay you have seen advertised or earned.
- If the point of the job is health insurance, price the insurance you would buy without it. That premium belongs in spending the year the job ends.
- Give the income an end date. The Coast calculator uses 'years it continues' for this. Income that ends in five years should not reduce a portfolio as if it were a pension.
A sketch, not a benefits ruling
Employer health coverage, ACA subsidies, and Social Security earnings tests have rules that change and that depend on your household. This page does not model them. It only shows why a durable side income shrinks the portfolio and why a fragile one does not.
Questions
How is Barista FIRE different from Coast FIRE?
Coast FIRE assumes you stop saving and keep working a job that pays the bills, so the portfolio is not touched until later. Barista FIRE usually means cutting back to a smaller job and letting the portfolio cover the gap. If that smaller job also provides health insurance, the job is doing two kinds of work. The Coast calculator can stand in for the arithmetic: enter the job as side income and any portfolio draw as a partial withdrawal.