Barista FIRE Calculator Formula

Understand the math behind the barista fire calculator. Each variable explained with a worked example.

Use the Barista FIRE Calculator

Formulas Used

Barista FIRE Number

barista_fire_number = withdrawal_rate > 0 ? gap / (withdrawal_rate / 100) : gap * 25

Annual Income Gap

income_gap = gap

Surplus/Deficit

surplus_deficit = current_savings - (withdrawal_rate > 0 ? gap / (withdrawal_rate / 100) : gap * 25)

Annual Portfolio Income

portfolio_income = current_savings * withdrawal_rate / 100

Variables

VariableDescriptionDefault
annual_expensesAnnual Living Expenses(USD)50000
part_time_incomePart-Time Annual Income(USD)20000
current_savingsCurrent Savings(USD)400000
withdrawal_rateSafe Withdrawal Rate(%)4
gapDerived value= max(annual_expenses - part_time_income, 0)calculated

How It Works

Barista FIRE

Barista FIRE (named after the idea of working at a coffee shop for health insurance) is a semi-retirement strategy.

How It Works

1. Save enough so portfolio withdrawals + part-time income cover expenses 2. Quit your high-stress career 3. Work a lower-paying job you enjoy for spending money and benefits

Formula

Barista FIRE Number = (Annual Expenses - Part-Time Income) / Withdrawal Rate

Benefits

  • Freedom from demanding career much earlier
  • Part-time work provides structure and social connection
  • Employer benefits (health insurance) from part-time job
  • Portfolio continues growing during part-time years

    • Worked Example

    $50,000 expenses, $20,000 part-time income, $400,000 saved, 4% withdrawal rate.

    annual_expenses = 50000part_time_income = 20000current_savings = 400000withdrawal_rate = 4
    1. 01Income gap = $50,000 - $20,000 = $30,000
    2. 02Barista FIRE number = $30,000 / 4% = $750,000
    3. 03Current savings ($400,000) vs target ($750,000)
    4. 04Deficit = $400,000 - $750,000 = -$350,000 (not there yet)

    Ready to run the numbers?

    Open Barista FIRE Calculator