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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 …….