Your FIRE roadmap – the 5 phases
RetirementThe FIRE roadmap shows you the way from today to your pension as a sequence of up to 5 phases. Not all phases are always active – Coast FIRE and Barista FIRE are optional.
1. Accumulation phaseYou work and actively build wealth (saving + investing). Your capital grows through contributions and returns. How long it lasts depends on your savings rate and market performance.
2. Coast FIRE (optional)From this point on, your saved capital is enough to grow to the required FIRE number by your FIRE age through returns alone – without further contributions. You could stop saving and just cover your running costs.
3. Barista FIRE (optional)You reduce to part-time or a mini-job. Part of your expenses is covered by work income, the rest by portfolio withdrawals. This lowers the capital requirement considerably compared with full withdrawal.
4. Full withdrawalYou live entirely off your portfolio. The annual withdrawal is calculated individually from your budget (living costs, taxes, health insurance). Your target withdrawal rate (e.g. 4%) determines the capital needed for it.
5. PensionFrom the statutory retirement age (e.g. 67), the pension supplements your income. The required portfolio withdrawal drops by the pension amount – which protects your capital in old age.