Barista FIRE Calculator: Part-Time Work, Earlier Exit

Barista FIRE is early retirement with a part-time job: your investments cover part of your spending and a lighter job covers the rest. Because the portfolio only has to fund the gap, the target is smaller than a full FIRE number, often by hundreds of thousands of dollars. Enter your yearly spending, the after-tax income you expect from part-time work, what you have invested and what you add each month. The calculator gives your Barista FIRE number, how long it takes to reach at your current saving rate, and the full FIRE number for comparison.

The Barista FIRE formula

Barista FIRE number = (annual spending − part-time income) ÷ safe withdrawal rate. At a 4% withdrawal rate that is 25 times the gap. The time to get there is found month by month: the balance grows at the real (after-inflation) return and your contribution is added each month, both in today's dollars, until it passes the target. The calculator also shows the reverse view: how much part-time income your current portfolio would need alongside it to cover spending today.

A worked example

Someone spending $50,000 a year needs $1,250,000 for full FIRE at 4%. If a part-time job brings in $20,000 a year after tax, the portfolio only has to cover $30,000, so the Barista FIRE number is $750,000, $500,000 less. Starting from $250,000 and adding $1,500 a month at 7% returns and 3% inflation, that takes 13 years 10 months, against 22 years 10 months for full FIRE. With $250,000 invested today the portfolio supports $10,000 a year, so leaving now would need $40,000 a year from work.

Health insurance is the usual reason

In the US the classic Barista FIRE job is one that comes with health cover, because buying insurance individually before Medicare eligibility at 65 is one of the largest costs in an early retirement budget. If your part-time job will not include it, add the premium and expected out-of-pocket costs to your annual spending before you run the numbers. Check marketplace prices for your age and area at HealthCare.gov rather than using a rule of thumb.

Keeping the plan honest

Use after-tax part-time income, and be realistic about how many years you will want to work. If you plan to stop the part-time job at some age, the portfolio must be large enough by then to cover all spending; the Coast FIRE calculator answers that question for a later date. Social Security and pensions are not included; if you count on them, lower the spending figure for the years they pay. Returns are assumed steady, so keep a cash buffer for bad years rather than selling investments after a fall.

• Coast FIRE calculator
• FIRE number calculator
• Hourly to salary calculator
• Emergency fund calculator

When to start Social Security

Part-time income can bridge the years until a later claim; see the age at which waiting pays off.

• Social Security break-even calculator