Barista FIRE is a semi-retirement strategy where you leave full-time employment but continue working part-time to cover some of your living expenses. The name comes from the idea of taking a low-stress barista job at a coffee shop, though any part-time work counts. Your investment portfolio covers the difference between your expenses and your part-time earnings, resulting in a lower withdrawal rate than full retirement.

The key advantage of Barista FIRE is that it dramatically extends portfolio longevity. If your expenses are $50,000 per year and your part-time job covers $20,000, your portfolio only needs to generate $30,000. On a $400,000 portfolio, that is a 7.5% withdrawal rate without part-time income, but only 5% with it. Many people also value the health insurance and social benefits that come with even part-time employment.

As your portfolio continues to grow through investment returns, the gap between your expenses and part-time income shrinks relative to your portfolio size. Eventually, your portfolio reaches full FIRE territory, where it can sustain your entire lifestyle without any earned income. Barista FIRE is a practical stepping stone that lets you enjoy more freedom years earlier than waiting for full financial independence.