Coast FIRE and Barista FIRE
FIRE isn't a "work or don't work" switch. Between intense accumulation and full retirement there are very useful midpoints, especially if what you want isn't to stop working but to stop being obliged to.
Coast FIRE: when compounding already does the work for you
You've reached Coast FIRE when you have enough invested that, without contributing another euro, compound interest alone will reach your FIRE number by your chosen retirement date. You keep working, but only to cover current expenses: you no longer need to save.
The Coast number is the FIRE number discounted back to today:
Coast number = FIRE number / (1 + r) ^ years to retirement
Example
You want €600,000 at 65 and you're 35 today (30 years ahead). With a 5 % real return:
Coast number = 600,000 / (1.05)³⁰ ≈ €138,800
If you already have ~€139,000 invested, you can stop contributing: just by compounding at 5 % real, you'll reach €600,000. From there, your salary is only for living. That hugely frees up your career decisions.
Barista FIRE: part-time work covers the rest
Barista FIRE is working part-time or at something lighter (lower paid but more enjoyable) so that income covers part of your expenses, while your portfolio covers the rest with a smaller —and therefore safer— withdrawal. You don't live 100 % off investments; you live off a mix.
The name comes from the US, where a part-time job gave access to health insurance. In Spain that motive barely applies: public healthcare covers you regardless of employment. Here the appeal is different: easing the pressure on the portfolio and keeping a foot in the working world.
Lean FIRE and Fat FIRE: the other dimension
While Coast and Barista describe how you get there, Lean and Fat describe how much you spend: Lean FIRE chases a modest number with an austere lifestyle; Fat FIRE, a comfortable one with high spending. They're labels; what matters is that your number fits the life you want to sustain.
The Spanish nuances that change the maths
- Contributions and public pension. If you stop working (or work part-time) for many years, you contribute less and your future public pension falls. In a serious FIRE plan that pension is an "asset" worth estimating: the smaller it is, the larger your portfolio must be.
- Special agreement with Social Security. If you stop working, you can keep contributing on your own via a special agreement (convenio especial) so as not to freeze your contribution base for the pension.
- Gap until retirement. If you retire at 50, there are years before the public pension kicks in: your portfolio must cover that bridge in full.
Common mistakes
- Computing the Coast number with nominal return. Use the real one (after inflation) or you'll fall short.
- Stopping contributions and inflating your lifestyle. If your expenses grow, your FIRE number grows and Coast is no longer reached.
- Ignoring sequence risk. In Barista FIRE the work income cushions bad years; quit entirely and that cushion disappears.
- Forgetting the contribution gap and its effect on the future public pension.
What to do
Compute your Coast number with a real return: it tells you whether you can already ease off the savings accelerator. If Barista FIRE appeals, model what share of your expenses light work will cover and what withdrawal that leaves your portfolio (smaller and safer). And in any Spanish scenario, estimate your public pension and decide whether a special agreement is worth it to avoid penalising it.
Educational information, not financial advice. The figures are illustrative and depend on your assumptions; consult a professional for your plan.