Coast FIRE and Barista FIRE: the realistic kind of FIRE

The FIRE variants

"Classic" FIRE aims for a portfolio that covers all your spending forever. It's a big target that, for many people, takes decades of high saving. But there are two variants you can reach much sooner, and they already change your life:

• Coast FIRE: you've already built up enough to stop saving. You keep working only to cover today's spending, while your portfolio grows to the target on its own.
• Barista FIRE: your portfolio covers part of your spending, and lighter work, part-time or chosen for love, covers the rest.

Coast FIRE: when you can stop saving

The Coast FIRE question is: how much do I need today so that, without adding another euro, my portfolio reaches the target by the age I've chosen?

Take a target of €750,000 at 60 (in today's money) and a hypothetical 4% real annual return:

Time works for you: at 30 you need less than a third of the final target. Once you hit Coast FIRE, you can stop saving and spend everything you earn, or keep saving a little and bring the date forward.

Barista FIRE: how much less you need by working a little

If you spend €30,000 a year, full FIRE at a 3.5% withdrawal rate needs about €857,000. If a part-time job brings in €12,000 net a year, your portfolio only has to cover €18,000: about €514,000 is enough. Nearly €350,000 less, which for many people means years of full-time work saved.

Barista FIRE has other, often underrated advantages:

• it protects against sequence risk: you withdraw little in the early years, exactly when a market crash would do most damage (see the bucket strategy);
• it keeps feeding your pension with contributions, reducing the pension you lose;
• it gives you structure and relationships, which many people find they miss after stopping completely.

How to see where you stand

1. Work out your full FIRE number, for example with the FIRE calculator.
2. Choose the age by which you'd like to reach it and calculate the Coast FIRE portfolio you need today: target ÷ (1 + real return)^years. The FIRE simulator does it for you, state pension included.
3. Estimate what you could earn from lighter work and recalculate your Barista FIRE target.

Many people discover they're closer to one of these milestones than they thought. And it's often the milestone that really changes quality of life, well before full FIRE.