Free Barista FIRE Calculator To Plan Your Early Partial Retirement

Barista FIRE is about eventually achieving Financial Independence one day while working a job you love deeply along the way. You can use our FREE Barista FIRE Calculator to run your numbers and explore how you can enjoy a Barista FIRE lifestyle. This lifestyle is often classified as partial or semi-retirement, as it typically involves pursuing part-time work. Here’s how to start.

What Is Barista FIRE?

First, what is Barista FIRE (Financial Independence, Retire Early)? Barista FIRE is a shortcut to an early retirement lifestyle and is still a relatively new retirement planning option, even though it’s becoming well-known. You work, save and invest more now so you can afford to work less later in life.

However, you will continue working for a side income – even if it’s on your terms. That’s because your portfolio is not big enough to generate enough passive income so you can fully live off of that. With traditional FIRE (most people in the FIRE community opt for that) you focus on achieving early retirement where work becomes fully optional (as your passive income fully pays your bills).

So, Barista FIRE is actually a Financial Independence (FI) strategy and an alternative FI approach. That’s why the term Barista FI is more accurate. Because, you don’t have the goal to achieve early retirement (as it is with traditional FIRE where you opt for early retirement). But, for simplicity reasons, I’ll stick with the term Barista FIRE for now.

With Barista FIRE you enjoy the benefits financial independence offers before you actually achieve it (as you’re only partial financial independent). You partially live off of a passive income and supplement this with part-time work (you truly enjoy doing) so you can cover all of your living expenses. And, for health insurance coverage. So, you opt for partial retirement or semi-retirement early on in life instead of full early retirement. Why?

The no. 1 goal with Barista FIRE is achieving work-life balance. You want to reduce the work stress, enjoy a more flexible lifestyle and be more in control over your schedule. So, you have to have that desire to continue doing some kind of work, at least for a decent side income.

How To Achieve Barista FIRE: A Simple 7-Step Guide

Step 1: Figure Out Your Future Spendings

If you have never engaged with your personal finances or expenses, it may take some time to first figure out how much money you actually need each month. In this case, I highly highly recommend you start tracking your expenses. We do this for over 10 years now, using the App YNAB. If you want to learn more or explore different apps, read The Best Budget Apps for 2025.

Once you know what you spend, think about how those expenses will change over time. Which expenses might be lower or higher? That is one of the first questions to ask for any retirement planning. If you have kids, my experience is that they tend to need more money as they grow older. Even if that is not a lot of money, it’s still some money. Also, what about your mortgage or housing costs in general? Do you expect them to still be part of your retirement planning? Make the sum of all for your future spendings.

If you are already experienced in tracking your expenses and budgeting your money, this step can be done pretty quickly – depending on how old your numbers are. I’ve written some posts around that topic, especially helpful for budgeting beginners or those who feel stuck and need a fresh view:

• How To Create Your First Bare Bones Budget: FREE Calculator (see next picture and link)
• How I Spend My Money On What Matters Most & Skip The Rest
• The Ultimate Budget For FIRE: A Frugal Values-Based Budget
• How To Start A Family Budget That Really Works In 7 Easy Steps

Before my husband and I have created this Template we created the Bare Bones Calculator simply for ourselves. It is a more advanced version of the free budget template. And, it helped my family to make it through the last 2 years with way less income (due to my parental leave) and so much higher expenses (due to high inflation) without the need of crushing our savings.

Step 2: Estimate Your Earnings

Right now, you work a job and earn an income. How much money do you expect to earn if you quit your 9-to-5 job and switch to an easier part-time job with less work commitment generating a side income? That is the other part of the equation for any retirement planning.

For example, if you work a couple of hours per week on something you enjoy and get paid around 10.000 per year, you earn 833 per month. Now, you don‘t need to withdraw another 833 per month from your investment portfolio. This corresponds to around 250.000 that you could have saved less in your stock market portfolio.

The math behind is based on the 4 % rule. We’ll talk about that in “Step 6: Reaching Your Barista FIRE Number”. That’s the calculation you need to make (for our estimated earnings of 833 a month):

833 income p.m. x 12 months = 9.996 income p.y. x 25 times = 249.900

Consider seasonal work too. For example, my husband Marc loves doing our tax declaration. I don’t know anybody else who does. That is a gift. And the best thing: it is seasonal. The biggest benefit with seasonal work is that you may work only a couple of months per year full-time. The rest of the months are essentially free. You could consider seasonal work even in addition to your part-time job.

Step 3: Subtract (Spendings-Earnings) To Calculate Your Passive Income Goal

Let’s assume your estimated spendings are 50.000 per year and your estimated earnings are 30.000 per year. If we subtract your earnings from your spendings we get a gap:

50.000 spendings p.y. – 30.000 earnings p.y. = 20.000 p.y. you need to earn in passive income

In other words, 20.000 per year is your passive income goal for your retirement planning. That is the money you need to take out (aka withdraw) as a passive income (without you having to work for it) from your investment portfolio like a stock market portfolio.

Now, if you want to earn 20.000 per year in passive income how big should your Barista FIRE portfolio be? That is your Barista FIRE number and we come to that in step 6.

Step 4: Save More

When you start your Barista FIRE journey, you want to focus on saving more money. One of the core principles of any FIRE journey is to save more of your income. Most FIRE folks strive to achieve a 50 % savings rate. But less would do the job as well. Especially for Barista FIRE as you don’t need to accumulate that much money in retirement savings as it is with traditional FIRE.

But saving money has its limits and mostly that has nothing to do with money itself. I have written a couple of blog posts about how you can save more (without sacrificing) simply by reducing waste:

• How To Save 500 A Month Effortlessly Without Any Sacrifices
• How To Stop Impulse Buying And Save Money In 2 Simple Steps
• Impulse Buying: Its Roots & How To Overcome 3 Main Triggers
• Creating Consumers: How We All Got Into Debt & Its Real Cost

Also, I have put together some money savings challenges you may want to consider to save more:

• 7 Unique Money-Saving Challenges To Waste Less And Save More
• Travel Hacking For European Families: How To Travel For FREE
• How To Save Money FAST With A 7-Day Spending Freeze

Step 5: Invest Money Wisely

In step 2 you want to invest your money wisely. There is one of the most popular investment strategies in the FIRE community: investing into stock Index Funds that are low-cost and broadly diversified using a monthly savings plan. I give an insight into The 7 Best SAFE Index Funds For Financial Independence. You continue to invest your money in the stock market up to a specific point in your portfolio‘s value.

Step 6: Reaching Your Barista FIRE Number

When you reached that point within your investment portfolio you reached your Barista FIRE number.

Your Barista FIRE number represents a specific portfolio value. That is when you have invested enough so that the passive income your portfolio would generate (if you start withdrawing) could already cover big part of your living expenses. Typically around half. But actually, there is no rule for that.

However, your Barista FIRE number depends on your withdrawal rate. Let me explain. The withdrawal rate tells you how much money you can take out from a stock market portfolio in retirement without running out of money. That translates into a percentage. And, it depends on your retirement period. How long do you expect your Barista FIRE period to be? Do you plan for 30 years of Barista retirement, 40 years or even more?

For a 30 year Barista retirement period people in the FIRE community use the 4% rule as a SAFE withdrawal rate. For 35 years or 40 years or even longer, you should lower that 4% rate to 3%- 3.5%. I’ve written about the 4% rule in the blog post How To Retire Early With Kids: Your Guide To The Fastest Way. Once you know your withdrawal rate you can run your numbers using our free Barista FIRE Calculator. We come to that in a second. But first is the last step 7.

Step 7: Stop Investing (Quit Your 9-To-5 Job) & Start Withdrawing Money

When you reached your Barista FIRE number, you stop saving and investing your money into your stock market portfolio. From now on your savings rate could be 0%. Typically, you would quit your 9-to-5 job and perhaps a high-stress position.

Now, you can switch to a less demanding part-time job with low workload. Basically, you just need an easy part-time job to supplement your passive income. That job also helps with paying for your family’s health care. We talked about that in step 2.

Now that you’re Barista FIREd, you can start withdrawing money from your investment portfolio.

Your FREE Barista FIRE Calculator

For your convenience, we designed a FREE Barista FIRE Calculator. You can use it to plan your transition from full-time work to part-time freedom, visualize your portfolio growth, and calculate your Barista FIRE number with our FREE Barista FIRE Calculator. You can use it directly online to run your numbers after providing some information like your withdrawal rate of choice we talked about in step 6.

The Biggest Benefit With Barista FIRE

Healthcare coverage. The term Barista comes from the US company Starbucks offering health insurance to their part-time employees (hence the name Barista FI). But why, specifically from Starbucks?

Typically, healthcare is not offered to part-time employees in the US. Starbucks was one of the first one doing that. Today, there are more US companies offering healthcare coverage to their part-time employees. As I’m not from the US, I can recommend this YouTube Video about The Best Places To Work For Barista FIRE (in the US). Pay special attention to the table at 6:46 minutes. One key takeaway is that part-time work typically starts at 20 hours a week.

In Germany (Europe) where we live that’s different. Most (big) companies offer working part-time to their employees without cutting or reducing healthcare benefits. That is just part of European culture, especially in Western European countries and North Europe. And many employees take advantage. Also, I know many moms who only work around 8-15 hours a week (!) and still get full health insurance. I myself do that right now (even if that is only for a limited amount of time). I know, to US standards, that’s crazy.

But, the problem for many people is (no matter where they’re from) healthcare costs can explode if they have to pay for that on their own in semi-retirement. Of course, there are options to get healthcare benefits for little money using certain private health insurance companies covering medical “necessities”. But if we talk about complete and full coverage, especially for a family with multiple kids (like we are) healthcare costs can easily extend 1.000 a month (even in Germany and even with state health insurance).

So, getting healthcare coverage through part-time work is beneficial in two ways during your partial retirement years. One is, you do not have to pay for healthcare out of pocket as your employer covers a (big) part of your healthcare costs (at least for the most part of expenses). Second is, you get an additional income. So, you save money for healthcare and you get extra income too.

The Biggest Risk With Barista FIRE

You need to keep in mind that starting to withdraw money from any portfolio slows down the growth of your portfolio. That’s because you constantly take out money from it. The biggest risk lies in how your portfolio will perform during your semi-retirement years, commonly referred to as the sequence of returns.

What many don‘t realize is that Barista (FIRE) might be a concept forever. Your portfolio may never compound into your FIRE number or you outlive your retirement savings during partial retirement. So technically, you might never become financially independent and will need to work forever. But, it can also be that your investments will grow into your FIRE number. In this case Barista FIRE deserves its naming. The point is: it depends.

But what is your FIRE number? It is the amount of money you need to have saved up in your portfolio so that the passive income it generates can pay for your bills. Basically forever, without fearing to run out of money. That in itself depends on how much money you withdraw from your portfolio. More in the next paragraph.

How To ReduceThe Sequence Of Return Risk

First, what is the sequence of return risk? It basically says that not the average return rate your portfolio generates matters but the sequence of returns. Especially during your first 10 years of withdrawing money. If the first 10 years experience poor or negative returns, and you still have to withdraw money from your portfolio, you could deplete a significant portion of it early on.

You could reduce the sequence of return risk by doing this:

1. work more to earn more in side income during partial retirement when times are (really) bad
2. withdraw less or only sell your bonds, bills or gold to not deplete the stock part of your portfolio even more. Or you use your cash reserves.
3. choosing the withdrawal rate that is appropriate for your retirement period (see next paragraph)

Michael Kitces‘s research about the the sequence of return risk is well-known, not only in the financial independence community. He suggest to reduce the sequence of return risk by using the 4 % rule (we’ll talk about in step 6 in more detail) for diversified portfolios and for 30 retirement years. For 40+ retirement years calculate with an initial 3.5 % withdrawal rate.

For example, let’s assume your annual spendings (you expect to have in retirement) are 30.000. For a safe withdrawal rate of 4% you now multiply 30.000 by 25 and get your FIRE number with 750.000. If withdrawing 4 % annually you could take out 30.000 per year for up to 30 retirement years with a very high probability to never run out of money during those 30 years. If you want to apply a 3.5 % withdrawal rate you need to multiply your annual expenses by 29 for taking out 30.000 per year as well. So, your portfolio need to be higher in total.

Why Barista FIRE Is Best For Tax Savings & Further Resources

With Barista (FIRE) you profit from tax savings and tax advantages. Because typically, an income from a stock market portfolio is taxed with lower income taxes than a job income – at least that‘s how it is in Europe/Germany where we live. You pay less taxes if getting a passive income like dividend payments from a stock market portfolio than if getting a salary.

In addition to that, a part-time job (you want to pursue in Barista FIRE) where you earn a side income fall into a lower tax bracket than jobs where you work full time. So, there‘s more money left over so to say overall.

Now, if you want to learn more about Barista FIRE, here are some further ressources:

• Bravely Go is a financial education company founded by Kara to help women build wealth and take financial power.
• JulieDeVivre is Barista-FIRE’d sharing how she manages her money in semi-retirement, traveling full-time since selling her house and her belongings in 2020 (to quit her high-profile corporate job just one year later and live a happy nomad life).
• StrongMoneyAustralia is a couple (from Australia) who retired early also pursuing part-time work they enjoy, which for them is one of the best parts about FI. Here’s their book Strong Money Australia: How to Gain Financial Independence and Create a Life of Freedom

When you walk away today with at least one new idea to improve your financial journey I’d love to show you some more in the next post. If you haven’t already, you can apply to become a part of the community to not miss any new release. For that you can subscribe to our newsletter below in the green footer.

Now, I’d love to hear from you: Are you thinking about Barista FIRE already? Let me know in the comments below!

In our next blog post I reveal something about the sacrifices required on your journey to financial freedom.

Title image source: Daryan Shamkhali on Unsplash