Barista FIRE Calculator

Your Age 35

Retirement Age 67

Already Invested ($)

Monthly Spending ($)

Monthly Contribution ($)

Barista Income Monthly ($)

Annual Growth 10.5%

Inflation Rate 3.0%

Safe Withdrawal Rate (SWR) 4.0%

How to calculate your Barista FIRE number:

Barista FIRE is the trickiest of all FIRE calculations. It's a mix between traditional FIRE and Coast FIRE where in the Barista phase you're not fully retired but partially benefit from your investments.

It's complex because this scenario has three possible outcomes depending on whether your Barista income is less than, equal to, or greater than your monthly spending. Many online tools get it wrong. Here's the dynamic breakdown based on your inputs (change Barista income to see the impact):

The number of years until retirement:
67 - 35 = 32
Annual spending at retirement adjusted for inflation (3.0%):
$2,000.00 × 12 × 1.030³² = $61,801.99
How much you need at retirement (SWR 4.0%):
$61,801.99 / 0.040 = $1,545,049.65
How much you need now (with Barista income $/month and growth ):
- You spend $/month but earn $/month, so you withdraw $/month initially.
- That withdrawal grows with inflation. For example:
  - In year 2, it's $/month.
  - In year 10, it's $/month.
- Your portfolio grows at annually, but you take out increasing amounts each month.
- The Barista FIRE number is the starting amount that, after years despite small monthly withdrawals in the Barista phase, hits the required nest egg of $. Using a detailed calculation, your number is $.
How much you need now (with Barista income $/month and growth ):
- Initially, your income of $/month exactly covers your expenses of $/month.
- But since expenses increase with inflation, you'll eventually need to withdraw.
- For example, by year , when expenses are $/month, you'll withdraw $/month.
- Your portfolio grows at annually, but you'll start taking money out later.
- The Barista FIRE number ensures your portfolio grows to $ by age .
- Using a detailed calculation, this is $.
How much you need now (with Barista income $/month and growth ):
- You earn $/month and spend $/month, so you have $/month left over initially.
- You can add this excess to your portfolio each month.
- However, as expenses increase with inflation, your excess decreases, and you might need to withdraw later.
- For example, by year , when expenses are $/month, you'll need to withdraw $/month.
- The Barista FIRE number is $. This is the amount that together with your later smaller Barista income contributions will provide you at retirement time with $.

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FAQ

What is Barista FIRE? +

Barista FIRE is a balanced approach to financial independence where you work part-time to cover some expenses while your investment portfolio covers the rest. Named after the Starbucks barista job (known for good benefits even for part-time workers), this strategy lets you escape the 9-to-5 grind sooner. You need less saved than traditional FIRE because your part-time income supplements your investment returns.

What is a safe withdrawal rate (SWR)? +

A withdrawal rate represents how much you can take from your portfolio annually without depleting it. The Trinity Study analyzed market data from 1925-1995 and found that withdrawing 4% yearly from a balanced stock/bond portfolio had a high success rate over 30 years. Some experts consider 5% safe as well, especially if you have flexibility to reduce spending or work more in down years. The key is ensuring your portfolio's growth exceeds your withdrawal rate plus inflation. For Barista FIRE, having part-time income provides extra safety since you can adjust work hours if needed. Your specific situation may require adjustments, but these rates offer a framework for planning.

Does Barista FIRE calculator take into account that my spending will increase over time due to inflation? +

Yes. Our calculator incorporates inflation adjustments to provide realistic projections of your future financial needs. This ensures your purchasing power remains protected as the cost of living increases over time. However, note that we conservatively assume your Barista income stays flat and does not increase with inflation, as low-wage jobs often lag behind inflation rates. The calculator assumes you'll need to withdraw more from your investment portfolio over time to make up for this gap. While this is a more conservative approach, it helps ensure you're better prepared for the future.

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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing involves risks, including the possible loss of principal. Always conduct your own research before making investment decisions.