Is Your Starbucks Barista Secretly a Millionaire? Why Early Retirees Are Embracing ‘Barista FIRE’ To Still Have Health Insurance

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Barista FIRE is an increasingly popular personal finance aspiration in which your wealth lets you become work-optional, but you still continue to hold a part-time job for residual income and benefits.
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Living off of assets alone upon retirement can feel scary. Barista FIRE – a spinoff of the Financial Independence, Retire Early (FIRE) movement – is an alternative way to achieve financial independence.

“I was a general manager at a movie theater making a little below $80,000 a year when I first learned about FIRE,” says Tom Brickman, a financial educator and founder of The Frugal Gay, a company that provides education and coaching on how to build wealth through real estate. Brickman says he’s been hustling since 2009 to reach his FIRE number and become financially independent. When he finally reached this milestone, however, he felt fear instead of relief.

“I hit my FIRE number of $2 million in 2019 and was ready to go, but then had self-doubt,” he says. “So I hung out at my job for two extra years. I finally left my job in January of 2022 at 39 years old.” Brickman and his husband regrouped on their retirement planning and decided that his husband would still work in order to provide health insurance and a residual monthly income for the household.

The Brickman household’s financial outlook is an example of Barista FIRE, an interpretation of the FIRE movement that involves maintaining a low-stress job in retirement to bring in residual income and, more importantly, health insurance coverage. Here’s what to know about Barista FIRE and whether it’s right for your personal circumstances, based on people we interviewed who’ve achieved it.

What Is Barista FIRE? 

Barista FIRE is an interpretation of the Financial Independence, Retire Early movement in which participants reach a FIRE number and then maintain a low-stress or part-time job for residual income or to pay for health insurance.

Barista FIRE has the same goal as other versions of FIRE: retire early with enough money in investments that your annual gains can cover your monthly expenses. You then switch to a part-time job or side hustle to provide health insurance or offset your spending habits.

The term Barista FIRE was coined in response to Starbucks and other similar companies offering healthcare to their part-time employees. Starbucks offers health insurance eligibility to hourly workers who work at least 240 hours a quarter, or a little under 20 hours a week, according to an internal document from the company. 

The approach is especially popular in the United States, where the cost of out-of-pocket health insurance can quickly inflate living expenses. The national average for monthly health insurance cost for an American enrolled in an Affordable Care Act (ACA) plan in 2022 is $438, according to reporting from KFF, an independent non-profit organization focused on national health issues. FIRE enthusiasts see Barista FIRE as a way to keep health insurance expenses low and protect their financial independence nest egg.

How Much Money Do You Need to Reach Barista FIRE?

To know how much money you need to start living a Barista FIRE lifestyle, the first step is to calculate your FIRE number, the amount of invested assets you need to become work-optional. Your FIRE number can be calculated by multiplying your annual expenses by 25:

Annual Expenses x 25 = FIRE Number

This formula assumes investment gains of 4% each year, which you would withdraw and live on. For Barista FIRE enthusiasts, however, your income would be factored in to the equation, lowering the number of assets you actually need to transition your career.

To calculate your Barista FIRE number:

  • Figure out your yearly expenses.
  • Calculate your full FIRE number (Annual Expenses x 25). 
  • Estimate the potential salary from a part-time job or side hustle. 
  • Subtract your yearly expenses from the part-time salary. 
  • Your Barista FIRE number is 25 times the supplemental income needed. 

Barista FIRE Creates Less Pressure

Barista FIRE appeals to many because you don’t have to save up as much money or wait until you have accumulated 25 times your annual expenses.

“It takes a lot of work and discipline to achieve FIRE,” says Melissa Houston, a Certified Public Accountant and financial educator who works with entrepreneurs to create financial independence. “With FIRE, there’s a lot of pressure on building your nest egg and financial assets that you can draw on for the rest of your life. If you find something you love doing, and it pays well, you can still manage to work part-time while you invest and save. Barista FIRE can be a way to build up financial security without as much pressure.”

The right part-time job or side hustle can make Barista FIRE an appealing option. You can achieve the goal of financial independence sooner and spend your time doing what you enjoy, and what would normally be out-of-pocket healthcare costs can be dumped back into an emergency fund, mutual funds, or other passive income vehicles instead.

Related: I Hit My FIRE Number at 37, But I’m Not Retiring Yet. Here’s What I’m Doing Instead

Types of FIRE to Suit Your Needs

FIRE has become increasingly popular in retirement planning, and Barista FIRE is one of a number of different perspectives. Here are a few of the more popular versions of FIRE.

Lean FIRE

In Lean FIRE, your retirement accounts only cover basic necessities like food, transportation, and rent. Your FIRE aspirations are categorized as Lean FIRE when your annual expenses comes out to $40,000/year or less. This version of FIRE means retiring sooner, but living frugally.

Fat FIRE

In Fat FIRE, you want a lavish lifestyle or anticipate over $100,000/year of expenses in retirement, which means your FIRE number is higher and will take longer to achieve.

Coast FIRE

This number is a midpoint you will hit on your way to hitting your FIRE number. Coast FIRE means you have enough money invested in your retirement accounts for future year-over-year compounding to get you the rest of the way to your net worth target; you can stop contributing to retirement accounts, which will reduce your current monthly expenses and free up cash.

Slow FIRE 

Slow FIRE emerged as a response to FIRE culture’s sometimes-unhealthy obsession with hustle. Slow FIRE means you’re being mindful to balance spending today with investing for tomorrow. It’s a way to pursue FIRE while still enjoying life now. 

Spouse FI

You may have already heard of this version of FIRE. It’s a personal finance aspiration in which a household can survive on one partner’s income, giving the other partner flexibility to stay at home or pursue part-time work. This version of FIRE is popular with couples who have children. 

Personal finance is personal, and the same is true for those who choose one version of FIRE over another.

“I’m not trying to race to the finish line in five or even ten years. I just want to know I’ve got traditional retirement down,” says Matthew Lee, a dentist and someone who’s elected to pursue slow FIRE. “I don’t have a job that I dislike or want to get out of. I really enjoy what I do. For me, it’s about finding creative ways to build more income and give myself options while my retirement is slowly building in the background.” Lee is currently 34 and hopes to have the option to work less or become work-optional by age 50.

Pro Tip

Take some time to think about which version of FIRE makes sense for your life, finances, and goals. What worked for someone else may not be right for you.

Barista FIRE vs. FIRE 

Each version of FIRE offers the opportunity to create financial independence if the principles are followed. Here are some questions to ask yourself when comparing Barista FIRE to traditional FIRE.

How Long Are You Willing to Live a Lifestyle of Low Expenses?

With traditional FIRE, it may take longer to reach your FIRE number as you’ll need your investments to cover all costs, including healthcare. Barista FIRE could mean retiring from full-time work sooner.

Do You Like Your Job?

You may already be in a job or have a side hustle that you enjoy. Barista FIRE may allow you to scale back your hours, but if you enjoy what you do, that could motivate you to pursue traditional FIRE because you don’t dread your work days. 

What Will You Do For Healthcare? 

Paying for healthcare is a significant expense for many Americans. Your health insurance options should be considered when deciding which version of FIRE you’ll pursue. 

“One of the scariest things we had to figure out was how to replace the incredible health insurance we had through the New York state teachers association,” says Brittany Kline, who, along with her husband Kelan, are personal finance experts currently on pace to hit their FIRE number at the age of 35. The Klines became debt-free and quit their full-time jobs in 2017 after building a multiple six-figure financial blog. They elected to get health insurance through a Christian healthcare ministry, which works similarly to regular health insurance; they put money in each month, and the plan covers anything over $500. 

“When we joined, we were concerned the paperwork would have to be perfect, and they wouldn’t be lenient if they were going to cover things,” says Kelan. “This was right when we were having our second child – which cost over $35,000 – and it was entirely covered by the plan. We’ve used the plan multiple times for tens of thousands of dollars, and it’s all been covered.”

Related: Our Family Achieved FIRE at 39 and 41 on Salaries Of Under $100K a Year. Here’s How We Did It

What Makes the Most Sense for Your Lifestyle?

It’s natural to read articles featuring regular people who achieved FIRE and want to follow a similar path. But what worked for someone else may not work for you. In deciding which version of FIRE to pursue, think about what makes sense for the type of lifestyle you’d like to live. 

Barista FIRE vs. Lean FIRE 

Barista FIRE means you reach a FIRE number and work part-time to pay for healthcare or additional expenses. In contrast, Lean FIRE means you reach a FIRE number and no longer work at all, but have to make ends meet on a bare-bones fixed budget. 

“My husband and I achieved lean FIRE, but not full FIRE, especially now with the stock market down,” says Walli Miller, a money coach who teaches women how to build wealth and become work-optional. “In 2015, I found an article about a couple who had reached financial independence. I read the article and sent it to my then-fiancé. There had been a change in management at [my] work, and I was like, ‘Oh, my goodness, I have to do this for another like 20 to 30 years?’ My fiancé and I committed to working on FIRE.”

Miller says she looked at the couple’s budget and started figuring out how to get some extra money to begin investing. “Weused a little bit of money each paycheck to pay down $22,000 in student loan debt, and I started maxing out my 401K at my job for the Federal Government,” she says. The couple achieved Lean FIRE in 2020.

FIRE is a way to create financial independence and give yourself options. For some, it’s not about retiring; it’s the opportunity to choose how you’ll spend your time without worrying about money. Decide which version of FIRE aligns with your goals, then start taking action today to make them happen.