Transparent method
The formula
Worked example
Example inputs
How to interpret the result
Barista FIRE relies on real, ongoing part-time income continuing to arrive on schedule, which makes it a fundamentally different bet than full FIRE's assumption of portfolio withdrawals alone. The plan's safety depends on that income actually being dependable, not just mathematically averaged into the projection.
Before you rely on it
What to check
Stress-test the plan against a stretch of months with reduced or interrupted part-time income, not just the assumed steady-state figure.
The common error
Where people go wrong with barista FIRE calculator
Treating projected part-time income as equally reliable as portfolio returns. A part-time job can end, change hours or lose benefits in ways a diversified portfolio's long-run average return doesn't capture.
Sensitivity evidence
How withdrawal rate changes the barista FIRE portfolio target
| Withdrawal rate | Barista FIRE portfolio target | Annual portfolio income needed | Share of spending covered by work |
|---|---|---|---|
| 2.0% | $1,500,000 | $30,000 | 41.7% |
| 3.0% | $1,000,000 | $30,000 | 41.7% |
| 4.0%worked example | $750,000 | $30,000 | 41.7% |
| 5.0% | $600,000 | $30,000 | 41.7% |
| 6.0% | $500,000 | $30,000 | 41.7% |
Every input, tested
Which input moves the barista FIRE portfolio target most
| Input | Tested from | To | Barista FIRE portfolio target at each end | Swing |
|---|---|---|---|---|
| Withdrawal rate | 3.0% | 5.0% | $1,000,000 to $600,000 | $400,000 (53%) |
| Annual spending | $54,000 | $66,000 | $600,000 to $900,000 | $300,000 (40%) |
| Annual part-time income | $22,500 | $27,500 | $812,500 to $687,500 | $125,000 (17%) |
| Other dependable income | $4,500 | $5,500 | $762,500 to $737,500 | $25,000 (3.3%) |
Two variables at once
Barista FIRE portfolio target by withdrawal rate and annual spending
| Withdrawal rate \ Annual spending | $48,000 | $60,000 | $72,000 |
|---|---|---|---|
| 2.0% | $900,000 | $1,500,000 | $2,100,000 |
| 3.0% | $600,000 | $1,000,000 | $1,400,000 |
| 4.0% | $450,000 | $750,000 | $1,050,000 |
| 5.0% | $360,000 | $600,000 | $840,000 |
| 6.0% | $300,000 | $500,000 | $700,000 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Annual spending | $60,000 |
| Annual part-time income | $25,000 |
| Other dependable income | $5,000 |
| Withdrawal rate | 4.0% |
| Barista FIRE portfolio target | $750,000 |
| Annual portfolio income needed | $30,000 |
| Share of spending covered by work | 41.7% |
Where the inputs come from
Annual spending is your full expected budget, annual part-time income is what you expect to earn from a lower-stress job, and other dependable income covers rental income, a pension or an annuity. The withdrawal rate is the share of the portfolio you take each year. Be realistic about part-time earnings and whether the job includes health insurance, which is often the reason people choose it.
When the result stops applying
The plan depends on being able to work part-time for many years, and health, layoffs or caregiving can interrupt that. Part-time income may stop when you want to retire fully, raising the target later. Health insurance before Medicare must be planned, and Social Security will be lower if earnings years are fewer.
What to compare it with
Compare with the standard, lean and fat FIRE pages, and see the early retirement health insurance calculator for the coverage gap. The retirement income gap calculator shows coverage in a similar way. The coast FIRE page shows when savings can grow without more contributions.
People also ask
Frequently asked questions
What is Barista FIRE?
A form of early retirement where a part-time job covers some expenses, so the portfolio needs to be smaller and the work is less demanding.
Why is health insurance central to Barista FIRE?
Many people take a part-time job that offers benefits to avoid buying costly individual coverage before Medicare age.
What happens when I stop working part-time?
You draw more from the portfolio, so it must be large enough to fund full spending later, or Social Security and other income must fill the gap.