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Barista FIRE vs Coast FIRE – Complete Comparison (Including the Dutch Context)

Introduction: FIRE is Not an All-or-Nothing Choice

Within the financial independence movement (FIRE), multiple strategies exist. While traditional FIRE often focuses on completely stopping work, there are more flexible variants such as Barista FIRE and Coast FIRE.

Both strategies:

  • Reduce financial stress

  • Shorten the period of mandatory full-time work

  • Leverage the power of long-term investing

However, they differ fundamentally in cash flow, risk profile, mindset, and applicability, especially within the Dutch context.
 

What is Barista FIRE?

Definition

Barista FIRE is a form of semi-retirement where you:

  • Stop full-time work once you have accumulated a base level of wealth

  • Continue working part-time or flexibly

  • Cover (part of) your fixed expenses with earned income

  • Leave your investment portfolio largely intact

The name comes from low-threshold jobs like being a barista, but in practice, it often involves:

  • Freelance work

  • Consulting

  • Teaching

  • Creative or project-based work


Goal
The goal is to transition to part-time work within a shorter timeframe, so that you no longer need a full-time job to cover essential expenses. This provides more time, less stress, and greater autonomy — without being entirely dependent on your investments.
 

What is Coast FIRE?

Definition
With Coast FIRE, you save and invest aggressively early in your career until your portfolio is large enough to naturally grow, through compounded returns, to a full FIRE target by retirement age.

From that point onward:

  • You stop actively saving or investing

  • You work only to cover living expenses

  • You let your investments “coast” toward (early) retirement


Goal
The aim is to have sufficient capital in the market early enough so that compounding has time to work its magic. This often requires significant early sacrifices, but afterward it’s mostly a matter of waiting.
 

Strategic Comparison: Barista FIRE vs Coast FIRE

Although both Barista FIRE and Coast FIRE are alternatives to traditional FIRE, they differ in approach, flexibility, and risk profile. Key strategic differences:

🔹 Early Savings

  • Barista FIRE: Moderate savings rate. Build wealth without extreme sacrifices.

  • Coast FIRE: Very aggressive saving in the early years, often 50% or more of income.

🔹 Work After FIRE Point

  • Barista FIRE: Part-time or flexible work remains part of the plan.

  • Coast FIRE: Continued work depends heavily on salary, lifestyle, and personal choices. Since extra investing is no longer necessary, part-time work is optional.

🔹 Accessing Investment Portfolio

  • Barista FIRE: Portfolio can remain largely untouched and continue growing. Less dependency on investments.

  • Coast FIRE: Wealth is generally accessed later. You can choose to fully stop working earlier, drawing on investments, or transition to Barista FIRE.

🔹 Dependence on Returns

  • Barista FIRE: Lower. Earned income cushions market fluctuations.

  • Coast FIRE: Higher. Success depends heavily on long-term investment returns.

🔹 Psychological Pressure

  • Barista FIRE: Relatively low. More room to adjust.

  • Coast FIRE: High until the coast point is reached due to intense savings pressure and market uncertainty; much lower afterward.

🔹 Flexibility

  • Barista FIRE: High. Hours, income, and pace can be adjusted.

  • Coast FIRE: Initially less flexible, but during the “coast” phase there is ample time and space to manage setbacks or make adjustments.

🔹 Suitability for the Dutch Context

  • Barista FIRE: Well-suited. Lower dependency on investments means Box 3 optimization is not strictly necessary (though always advisable).

  • Coast FIRE: Suitable. Box 3 optimization can save significant money and time over the long term.
     

Cash Flow and Living Expenses

Barista FIRE

  • Earned income covers basic expenses (e.g., rent/mortgage, insurance, groceries)

  • Investments act as a buffer and growth engine

  • More flexibility during market volatility (ongoing work allows extra contributions if needed)

Coast FIRE

  • Earned income covers all expenses during the coast phase

  • No extra savings needed

  • Greater vulnerability to market downturns, especially at the start of retirement
     

Mindset & Lifestyle

Barista FIRE

  • Work has intrinsic value

  • Social interaction continues

  • Better work–life balance after FIRE

Coast FIRE

  • Work is purely functional

  • Less mental pressure after reaching the coast point (earlier than Barista FIRE)

  • Less freedom in work hours before FIRE
     

Simplified Calculations

Calculate your own FIRE number

Barista FIRE – Full Overview

Example calculation

Personal Information:

  • Current age: 35

  • FIRE age: 50

  • Dutch state pension (AOW) age: 67

  • Expected retirement contributions from FIRE to AOW: €15,000/year

  • Annual basic expenses: €20,000

  • Extra lifestyle: €10,000

  • Part-time income after FIRE: €20,000/year

Step 1: Shortfall Until AOW

  • Desired post-FIRE expenses: €30,000/year

  • Part-time income: €20,000

  • Immediate shortfall: €10,000/year (from age 45–67 = 22 years)

Step 2: Shortfall From AOW Age

  • From 67: AOW + pension covers €27,000/year

  • Expenses €30,000 → remaining shortfall to be covered by FIRE portfolio decreases, sometimes even zero depending on returns or part-time income

Step 3: Required FIRE Portfolio

  • To cover €10,000/year shortfall until ~90, assuming 7% returns and 2% inflation → approximately €180,000

  • This is in addition to part-time income

Step 4: Annual Savings Until FIRE

  • Save from 35 to 45 (10 years)

  • To reach €180,000 at 7% return → about €13,000/year

  • With income €50,000 → savings rate ≈ 26%

Step 5: Key Considerations

  • Pension and AOW reduce required FIRE portfolio

  • Part-time income covers a large part of post-FIRE expenses

  • Inflation and returns considered for realism

  • FIRE portfolio can remain modest, as pension and AOW cover the long term
     

💡 Key Insight:
With a smart mix of part-time income, pension accumulation, and investment returns, financial independence by 45 is possible with a relatively modest FIRE portfolio, assuming a realistic lifestyle.
 

Coast FIRE – Scenario

Personal Information:

  • Current age: 35

  • Start Coast FIRE: 40

  • Stop working: 55

  • AOW age: 67

  • Desired post-FIRE expenses: €30,000/year

  • Portfolio return: 5% real

  • Inflation: 2%

  • Pension accumulation from 35–55 → estimated pension from 67 ≈ €15,000/year

Step 1: Coast FIRE Portfolio at 40

  • From 40, aggressive savings stop; portfolio can coast to desired FIRE amount via returns

  • To stop fully at 55, portfolio at 40 must grow with 15 years of work + returns to reach ~€320,000 at 55

  • Estimated starting portfolio at 40: €150,000–€160,000

Step 2: Saving and Working 40–55

  • Work and accumulate pension

  • Extra savings optional for travel or additional buffer

Step 3: Stop Working at 55

  • From 55: no salary, FIRE portfolio and pension until AOW

  • Shortfall until AOW fully covered by FIRE portfolio (~€320k)

Step 4: From AOW

  • Pension + AOW: ~€30,000/year → matches desired expenses

  • FIRE portfolio can remain untouched or serve as extra buffer/luxury fund


Key Points:

  • Coast FIRE starts at 40, allowing portfolio to grow

  • Work and pension accumulation continue until 55

  • FIRE portfolio at 55 only needs to cover shortfall until AOW

  • Returns and inflation allow for a lower starting portfolio at 40
     

Barista FIRE vs Coast FIRE in the Netherlands

Much FIRE content is US-focused. The Dutch context differs:

AOW: Often underestimated in FIRE plans

  • Accumulation: 2% per year

  • Not asset-dependent

  • Covers large part of basic expenses later in life

  • 👉 Dutch FIRE targets are often lower than in the US

Employer Pension

  • Coast FIRE: Strong early pension accumulation; more dependent on investments; fewer but more intensive working years

  • Barista FIRE: Normal pension accumulation; more flexibility to adjust work hours

Annuities & “Jaarruimte”

  • Contributions deductible in Box 1, outside Box 3

  • Essential FIRE tool

  • Complement AOW and standard pension

  • Limitation: payouts cannot start very early (usually 10 years before retirement)

Health Insurance & Benefits

  • Lower income → possible health allowance

  • Barista FIRE often benefits

  • Coast FIRE usually does not
     

Who is Each Strategy Suitable For?

Determining suitability is challenging. Both strategies have pros and cons. Early intensive investing to leverage compounding is always wise.

Coast FIRE focuses on investing until a certain point, then stopping. This may not suit everyone’s personality. For example, we may continue working until relocating (to my wife’s home country), funding travel and lifestyle along the way.

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