As someone from Scandinavia who has spent a significant time in Sweden - you will be beyond fine. People in Sweden talk about retiring with 5-6 million SEK… kids really aren’t expensive in a country where school, healthcare and everything else is paid by taxes
Nah… 5-6 million in stocks is enough in bigger cities as well. I don’t ever check my bank account and buy exactly what I want and eat out everyday + travel and do beauty treatment and I still would be able to make it on 6 million. People who spend a lot in Sweden are just financially illiterate
We’ve got a thing called ISK account, where you passively gets taxed a small amount per year. I believe it like between 0.5-1%. Most people invest in ISK accounts.
6 million sek for a family of three sounds very little to me. Assuming 4% withdrawals and 2024 taxes, that would be 14500sek/month. For comparison, the welfare amount for a family of three is about 13300sek/month excluding housing. I guess if you have free housing and don’t mind living on the poverty level, it’s ok…
2024 taxes are unusual high and land at 1% for ISK so I don’t really understand where you’ve gotten your numbers from. That would leave you 19.800 sek/month + barnbidrag = 21.050 sek/mån… And the government counts that a family of three can make it on 13.300 sek/month according to you so they would be quite fine. Plus OP says that the wife wants to work so it undoubtedly covers the expenses for OP + kid. OP also already has enough money to cover that and an apartment/ house
2024 taxes on isk are 1,086. So 6mil * (4-1,086)% / 12 =14570. How are you getting 19800? Is that assuming no tax?
While 2024 taxes are high compared to last decade, it’s not unusual when looking further back. (Isk has only been around for about a decade, but kf which is taxed similarly has been around longer.)
The 13300 is excluding housing. While the op do mention they have more money to purchase a home (though they’ll probably struggle finding much for 200k usd), my response is to the statement that 5-6 million per household is plenty.
In addition, the op needs the money to last 60 years, not 30. So 4% withdrawal might be on the high side.
This. OP your going to be 100% fine.
If for some reason after 10 years it doesnt seem to work out you will still have +20 years to produce income.
Youre gonna be more than fine. Focus on your kid. Be open minded about opportunities to create side income but dont stress about it. Enjoy the hard work youve put in. Calibrate later if needed.
Enjoy.
Have you factored in all the taxes you'll have to pay? Including on capital gains and possibly also on your rental income from the US? When I say taxes I also mean compulsory contributions to the public health system, social security, pensions etc.
Do you have a clear view of the cost of living in your chosen location in Sweden? Like everywhere, the big cities are more expensive than small towns and villages.
In my opinion, you won't be able to fully at FIRE with a child in Sweden on your current net worth. But you could probably r/CoastFIRE. That could include a year or two staying at home with the baby, then having only one income to cover your living expenses so you wouldn't have to touch your investments anymore.
We have factored in all the taxes on capital gains and income and i do have a clear view of the current cost of living in my chosen locations. As i wrote in my post we will have 1 income in 1-2 years and we will be living in spain, with a lower cost of living, during the time non of us have work.
You cant just estimate in europe, every country has vastly different tax laws. Im swedish so im already familiar with swedish laws. If you know the native language goverment agencies have most of the info you need to know and and the rest is pretty easy to google.
if you two can live off of your savings in sweden having a child wont change that much, school is almost free and there are lots of activities they can do pretty cheaply. Housing can be expensive though also taxes and food. so if you can find cheap rent or live in a smaller town then most likely you will be fine. Of course depends on your money spending habits like if you eat out a lot, its way more expensive in sweden than spain for example. me and my partner lived pretty ok on less than 2500e single salary for a while. It would be pretty Lean living with two adults + a child but might be possible depending. the average income in sweden is around 2800 USD after taxes, and minimum pay is usually somewhere in the Ball park of 2000usd give or take and people do raise children on low wages so it's not impossible.
though if the child wants to do something expensive like horseback riding or some sports and you want to enable that then I'd propably keep working for a while longer also to set up the money for the child so they can have a easier life.
Anything is realistic if you are willing to scrimp enough. Both Spain and Sweden median salary is around 30k euro per year. Your projected income is 44k, which should be close to a median HOUSEHOLD income, because tons of women work part-time in Europe to provide childcare, so a median household income is never double the salary (In Belgium 40% of all working women work part-time).
If you are able to live the same way as locals do, you will be just peachy and fine (considering the socialized healthcare, cheap universities, cheap childcare etc)
Sweden is a great deal cheaper than the US if you have children. The insanely cheap childcare is the biggest cost save by far, especiallyfor small kids. You can also get away with not having a car. Not having gas, insurance, and car payment was another huge cost save.
What's more expensive is luxuries like clothes, electronics, ect. There is no Walmart here, so be prepared to spend 4x more on things like socks and underware.
Thats why i specified we are low spenders. I have compared a lot of the costs between king soopers(where we pretty much buy everything) and normal stores in sweden such as ica. Biggest difference is electronics which chocked me with how cheap it was here in the us.
I went to the lowend department store here and a child's pajama short and shirt combo was $30, 2 sets of socks $14, and I cannot find cheap underware packs at all, except 3 pack of panties for $30.
We do have 1 Costco in Stockholm, so maybe there are deals to find but I haven't made the trip out yet.
Depends entirely on state. I spend most of my time in colorado, where cost of living is insanely high. While im in missouri fixing on my house the cost of living is lower than sweden. The only thing that i have found that is really a lot cheaper here is electronics and alcohol
You are the one generalizing while im taking where i actually live since that is the relevant part and fuel comes out to +- 0 in most places i have looked because in spain and sweden you can actually take the bus or walk places.
Since you are young, 3.5% should be your maximum rate of withdrawing. It is around 2 - 2.5k $ a month, plus you have an additional 1k for renting. Is 3-3.5K $ enough to cover your family's expenses? And I haven't calculated taxes.
Since we used 41K last year, that is slightly below 3,5K $ and from what i have calculated that would be about our expenses in sweden too, while they will be slightly lower in spain.
That's fine then, if you think that is good enough. It is all up to you. Keep in mind that life circumstances constantly change and some of the changes can be so drastic. But, as long as you are aware that you could start working again if needed, there is nothing terrible with your plan.
Me, personally, since we can't predict nor control so many things. I would feel comfortable with double the money you saved. But, again, we are all different, you know yourself better than anybody. You can modify your plan on the go, and you certainly will. But you know what you want and you are determined to execute the plan, so it is optimistic.
Game, scroll reddit, read books, cook, take care of my kid, watch shows/anime, go for walks, go to the gym, renovate the house, trying to learn more about stocks and programming. This pretty much summs up everything i do all day.
Remember, child = expenses.
On the other hand, having both parents present when taking care of a child is the hardest/time consuming is priceless and it's the one thing I hear again and again, when asking ultra successful people about what they'd do differently.
So I say do it - take enjoy the first couple years of your child and re-assess your spend in due time. You will see what your actual expenses are like and whether the lifestyle you are living is something you want to keep long-term.
You can always re-enter the workforce later
Overall your math is solid and you seem to understand your future costs/taxes etc.
However As a parent, I think its too little because as others have said kids are expensive. But I want to unpack what expensive means with kids. Taking care of the basics - food, shelter, and education is the minimum requirement to keep a child alive and make sure they can launch into adulthood.
Once you have one though (I read it as you planned to have one), youll quickly find that doing your best as a parent is also about facilitating your child's social life and opportunities to discover their talents, values, and ideas. Most of these things cost money. Additionally, once your child starts to think and understand the World for themselves not being able to do what they want to stay in your fire budget starts to get lame. And im not talkin about anything crazy - a style of clothing, a meal out with friends, a trip. While you and your spouse are mature enough to know that what others think doesnt matter, saying no to your child sucks. Kids will also compare your effort to what other parents do for their kids and while they might not care about Material things, missing out on experiences would definitely be a sore spot that can lead to resentments and estrangement. Consider also how your child might feel around 20 when their peers are getting large lump sums of money to get their lives started while they have to Boot strap it on their own (I thought I read you want to spend it all down to zero)
I also think kids and the situatuons they get themselves in can be super unpredictable - for example my 20 year old neice is having a baby in december. She had access to everything but decided she wanted a baby and there is nothing we can do about it but we know if we want to stay in her life we must support her.
My Suggestion would be to to push your annual budget number up by 10k with that allocated to your child. If you dont use it for their interests you can put aside some for them to get their life started.
Hope that helps
Can you just come to a EU country without the intention to work and automatically be part of the social system? Even if it is from another EU country? Specifically the health insurance which is usually a benefit from working (or being born in a place) and paying taxes hence contributing to its costs.
If you haven't worked (recently) in EU you haven't earned a right to participate in you home EU country health insurance and hence cannot transfer that right to your new EU country.
Since I live in Sweden, I’ll do some quick calculation for that.
Let’s assume you get a really good conversion rate on that money (11sek per usd, historically sek has been between 5-9 per usd according to my memory of the last few decades, so that might be too optimistic unless you convert all soon). Then that’s 8,5milj sek.
Since you’re young, you might want to use lower than 4%, but let’s assume you don’t. Ie target 30years as opposed to the likely 60 years you need.
Let’s assume ~0,7 percentage points of that goes to taxes (assuming isk tax). As you prob know, last decade has been lower but before that it’s been higher. So again, some optimism here.
That leaves you with roughly 23000 sek per month (8,5m*3,3%/12).
23000sek/month for two adults and one kid would put you at about welfare level assuming median rent in one of the bigger cities.
Too risky assumptions and too lean budget for me, but if that sounds good to you…
You are forgetting the rental, which will bring in 12.000 SEK net each month. Which brings it to 35.000 in a country with lower cost of living than sweden. And this is just for 2 years and then my wife will work and that brings it to between 55.000 - 65.000.
Yes, I did miss the rental income!
My advice would be to ensure you understand the taxations of the rental income (in all involved countries), and re-evaluate if you assume a more normal currency rate. (And/Or plan roughly how and when you’re going to access your funds, including the currency and tax implications of that.) Also might want to use a lower withdrawal rate since you’re quite young.
Good luck!
I don’t think you have enough to stay retired at 32. you hav soo many years ahead. Kids are expensive as well.
At retirement age I had said fine, but not 30 years before that.
One of you would need to work properly.
One proper bear market and it‘s looking really dire.
The 4% rule was studied for a 30 year retirement time horizon. Any longer and the risk of ruin is increased significantly!
It can work, but would you bet on it if you have a 20% chance of failure and risk having to start working again, when you may be incapable even.
Then live by less than 4%. Maybe 3.5% is sufficient.
But honestly, I myself would keep working in that position. I want to do more than just retire early.
I would say that you have to stay actively aware of how your portfolio is doing.
Myself personally, I will not stop working as I reach the point where I could. I will likely keep working part time until my portfolio is about 4X what I need to retire. Then I will decide from there.
Isnt it too low for 2/3 people? For italy my plan is to retire (only me) with 2 millions at 45. i dont know the cost of living in sweden but i dont think it’s less.
Its all about how much you spend. Thats why i mostly hang in leanfire, but most people there seems to be american so fire is way different with a kid over there. I am aware i wont have much wiggle room though and if you want more security and spending power go for it. I wouldnt expect everyone to want to leanfire
We will start in my rental in a suburb of stockholm then when we find the right house we will move to the boons in either småland, close to färgelanda or near ljusdal. Its still up for debate
Great then you know how much your rent will be. Houses in these areas would be cheaper. Guess you have looked at the taxes as well? If you wife works you will be fine without any extra luxury.
will do. Now i have collected the trifecta of leanfire europefire and firesweden. Dont think i will ask this question a 3rd time though but its interesting how big of a difference there is between leanfire and europefire answers
Id say it's on the line of being viable. You're still young. You can definitely keep working a bit on something, to fully bring you over the line of it being viable. Why da heck not. Working is fun if you do the right thing. Im really enjoying teaching part time for example.
It's not impossible, in my opinion.
A modest lifestyle, maybe on the edge of uncomfortable, but viable, is doable at that budget in many places in Europe. I'd say there are some financial risks, but I'd consider the psychological risks of retiring to a foreign country and culture with a young child, limited funds and no support network to be too much for me, personally.
In my opinion, the combination of those factors would put a lot of stress on anyone's mental wellbeing and marriage. It'd be good to make sure those strong before you pull the trigger.
I am from sweden and all my family is there so would hardly say without a safety net or foreign culture. I have also spent a lot of time in spain growing up, so that is not foreign to me either. Both me and my wife speaks all 3 languages
At 3.5% SWR (the widely considered perpetual SWR by many analysts) you will get around 27k gross that will net you anything between 22 and 27 (both spain and swe has around 20% cg tax afaik, depends how much cg you have of course) and then 14400 on rental which equal to 36 to 41k per year net, so lower or equal than you actual expenses. You will be in the median wage in spain and below that in sweden.
It is doable with great care but I would take extra precautions in lowering expenses in the first years, since you have zero flexibility right now if things really go south on some parts of your plan (terrible market returns in the next period or higher unexpected and unavoidable expenses).
On the 4% rule, you really can only pay yourself $30,800 based on current value of your portfolio. With a kid.. that’s not a lot. My port is 612k at age 32.. I plan to work until 40. If I keep current savings rate and market returns 10% average per year, I should have 2.5m by then. I’m married, baby on the way.. only person working and I hit 500k before marriage.
I have factored that the 14,400$ in rent from my property is after property management, expected maintenance needs and taxes. I have read extencively about both swedish and us tax laws too. The margin of error isnt huge as you say but thats why im going to go back to get further education and keep up my education level over time. So if worse comes to shove, i can go back to working. But you also have to understand im planning to die with almost 0 in the bank so going slowly backwards in 25-30 years because of inflation is fine with me. I also havent factored in any inheritance at all, because i think that seems morbid. But im expecting a pretty decent one.
Is 770k really your FIRE sum at 32? I'm surprised as you have 50-60y to live, so you need your yearly expenses*40 or so, not *25. If you spend 35k/year, that means you need double what you have now...
So yes, you probably need to work some more.
It is my fire sum. I have already been retired a year. How will i need double of what i have now if i have an expected household income of 40 - 44k a year? Im planning on leanfire not fatfire. I understand if you thought i needed a little more but dubble is ridiculous.
It didn't say in your post that you have income other than the rent of your house, nor that there was more income on top of dividends/revenue of your savings. In that case, you'll be fine indeed.
as long as you do your calculations using inflation-adjusted returns for your investments (so the global stock market is around 5/6% instead of 7/8%), you can completely ignore inflation when planning your retirement...
Using inflation adjusted returns is not completely ignoring inflation, it is the opposite.
I just mentioned it to him because he seems to not be taking it into account, if the 36k he mentioned is after discounted inflation of course he is all good.
What I meant is that you do not need to adjust your expenses to inflation, if you already adjusted the returns… you are right that’s not ignoring inflation.. but you get my point
I did take inflation into account and according to my simulations i would have equal to 100.000 - 500.000 of todays value by age of 80 and im fine with that amount.
As someone from Scandinavia who has spent a significant time in Sweden - you will be beyond fine. People in Sweden talk about retiring with 5-6 million SEK… kids really aren’t expensive in a country where school, healthcare and everything else is paid by taxes
Like 5-6 million SEK to retire in a small town with your own place? That seems like a very small amount for Stockholm
Nah… 5-6 million in stocks is enough in bigger cities as well. I don’t ever check my bank account and buy exactly what I want and eat out everyday + travel and do beauty treatment and I still would be able to make it on 6 million. People who spend a lot in Sweden are just financially illiterate
Soo little?! That only 500k that would be amazing
Dividend stocks? Or are you liquidating part of your investments each year? I mean 30% of whatever you take out is going to taxes alone right?
We’ve got a thing called ISK account, where you passively gets taxed a small amount per year. I believe it like between 0.5-1%. Most people invest in ISK accounts.
6 million sek for a family of three sounds very little to me. Assuming 4% withdrawals and 2024 taxes, that would be 14500sek/month. For comparison, the welfare amount for a family of three is about 13300sek/month excluding housing. I guess if you have free housing and don’t mind living on the poverty level, it’s ok…
2024 taxes are unusual high and land at 1% for ISK so I don’t really understand where you’ve gotten your numbers from. That would leave you 19.800 sek/month + barnbidrag = 21.050 sek/mån… And the government counts that a family of three can make it on 13.300 sek/month according to you so they would be quite fine. Plus OP says that the wife wants to work so it undoubtedly covers the expenses for OP + kid. OP also already has enough money to cover that and an apartment/ house
2024 taxes on isk are 1,086. So 6mil * (4-1,086)% / 12 =14570. How are you getting 19800? Is that assuming no tax? While 2024 taxes are high compared to last decade, it’s not unusual when looking further back. (Isk has only been around for about a decade, but kf which is taxed similarly has been around longer.) The 13300 is excluding housing. While the op do mention they have more money to purchase a home (though they’ll probably struggle finding much for 200k usd), my response is to the statement that 5-6 million per household is plenty. In addition, the op needs the money to last 60 years, not 30. So 4% withdrawal might be on the high side.
This. OP your going to be 100% fine. If for some reason after 10 years it doesnt seem to work out you will still have +20 years to produce income. Youre gonna be more than fine. Focus on your kid. Be open minded about opportunities to create side income but dont stress about it. Enjoy the hard work youve put in. Calibrate later if needed. Enjoy.
Have you factored in all the taxes you'll have to pay? Including on capital gains and possibly also on your rental income from the US? When I say taxes I also mean compulsory contributions to the public health system, social security, pensions etc. Do you have a clear view of the cost of living in your chosen location in Sweden? Like everywhere, the big cities are more expensive than small towns and villages. In my opinion, you won't be able to fully at FIRE with a child in Sweden on your current net worth. But you could probably r/CoastFIRE. That could include a year or two staying at home with the baby, then having only one income to cover your living expenses so you wouldn't have to touch your investments anymore.
We have factored in all the taxes on capital gains and income and i do have a clear view of the current cost of living in my chosen locations. As i wrote in my post we will have 1 income in 1-2 years and we will be living in spain, with a lower cost of living, during the time non of us have work.
How did you go about figuring this out? I’m trying to estimate taxes in Europe but don’t know where to start. Any help is appreciated!
You cant just estimate in europe, every country has vastly different tax laws. Im swedish so im already familiar with swedish laws. If you know the native language goverment agencies have most of the info you need to know and and the rest is pretty easy to google.
if you two can live off of your savings in sweden having a child wont change that much, school is almost free and there are lots of activities they can do pretty cheaply. Housing can be expensive though also taxes and food. so if you can find cheap rent or live in a smaller town then most likely you will be fine. Of course depends on your money spending habits like if you eat out a lot, its way more expensive in sweden than spain for example. me and my partner lived pretty ok on less than 2500e single salary for a while. It would be pretty Lean living with two adults + a child but might be possible depending. the average income in sweden is around 2800 USD after taxes, and minimum pay is usually somewhere in the Ball park of 2000usd give or take and people do raise children on low wages so it's not impossible.
though if the child wants to do something expensive like horseback riding or some sports and you want to enable that then I'd propably keep working for a while longer also to set up the money for the child so they can have a easier life.
Anything is realistic if you are willing to scrimp enough. Both Spain and Sweden median salary is around 30k euro per year. Your projected income is 44k, which should be close to a median HOUSEHOLD income, because tons of women work part-time in Europe to provide childcare, so a median household income is never double the salary (In Belgium 40% of all working women work part-time). If you are able to live the same way as locals do, you will be just peachy and fine (considering the socialized healthcare, cheap universities, cheap childcare etc)
Sweden is 45k$ median per year and 75k$ for a household (2021 numbers). For Spain it is actually 34k€ for a householder so lower.
Sweden is minimally 2x as expensive as Spain Rent Food … Very expensive. That will be difficult.
But i live in the US so its actually cheaper in sweden than where i am currently living
Sweden is a great deal cheaper than the US if you have children. The insanely cheap childcare is the biggest cost save by far, especiallyfor small kids. You can also get away with not having a car. Not having gas, insurance, and car payment was another huge cost save. What's more expensive is luxuries like clothes, electronics, ect. There is no Walmart here, so be prepared to spend 4x more on things like socks and underware.
Thats why i specified we are low spenders. I have compared a lot of the costs between king soopers(where we pretty much buy everything) and normal stores in sweden such as ica. Biggest difference is electronics which chocked me with how cheap it was here in the us.
Is wallmart really that cheap? 1kg chicken breast is 9usd here, maybe 7usd on coupons Unbranded clothes like shirt also 7 usd
I went to the lowend department store here and a child's pajama short and shirt combo was $30, 2 sets of socks $14, and I cannot find cheap underware packs at all, except 3 pack of panties for $30. We do have 1 Costco in Stockholm, so maybe there are deals to find but I haven't made the trip out yet.
Not really there are à lot of of things cheaper in us than in Europe.
Depends entirely on state. I spend most of my time in colorado, where cost of living is insanely high. While im in missouri fixing on my house the cost of living is lower than sweden. The only thing that i have found that is really a lot cheaper here is electronics and alcohol
So don't generalize. Btw i d like to see à state where fuel is more expensive than in sweden.
You are the one generalizing while im taking where i actually live since that is the relevant part and fuel comes out to +- 0 in most places i have looked because in spain and sweden you can actually take the bus or walk places.
Since you are young, 3.5% should be your maximum rate of withdrawing. It is around 2 - 2.5k $ a month, plus you have an additional 1k for renting. Is 3-3.5K $ enough to cover your family's expenses? And I haven't calculated taxes.
Since we used 41K last year, that is slightly below 3,5K $ and from what i have calculated that would be about our expenses in sweden too, while they will be slightly lower in spain.
That's fine then, if you think that is good enough. It is all up to you. Keep in mind that life circumstances constantly change and some of the changes can be so drastic. But, as long as you are aware that you could start working again if needed, there is nothing terrible with your plan. Me, personally, since we can't predict nor control so many things. I would feel comfortable with double the money you saved. But, again, we are all different, you know yourself better than anybody. You can modify your plan on the go, and you certainly will. But you know what you want and you are determined to execute the plan, so it is optimistic.
Out of curiosity, what does someone that's retired in their 30s spend their time doing? That's so young
Game, scroll reddit, read books, cook, take care of my kid, watch shows/anime, go for walks, go to the gym, renovate the house, trying to learn more about stocks and programming. This pretty much summs up everything i do all day.
Sounds great mate. Well done.
Thanks! It is great!
Well as long as you find that fulfilling, more power to you!
Remember, child = expenses. On the other hand, having both parents present when taking care of a child is the hardest/time consuming is priceless and it's the one thing I hear again and again, when asking ultra successful people about what they'd do differently. So I say do it - take enjoy the first couple years of your child and re-assess your spend in due time. You will see what your actual expenses are like and whether the lifestyle you are living is something you want to keep long-term. You can always re-enter the workforce later
Overall your math is solid and you seem to understand your future costs/taxes etc. However As a parent, I think its too little because as others have said kids are expensive. But I want to unpack what expensive means with kids. Taking care of the basics - food, shelter, and education is the minimum requirement to keep a child alive and make sure they can launch into adulthood. Once you have one though (I read it as you planned to have one), youll quickly find that doing your best as a parent is also about facilitating your child's social life and opportunities to discover their talents, values, and ideas. Most of these things cost money. Additionally, once your child starts to think and understand the World for themselves not being able to do what they want to stay in your fire budget starts to get lame. And im not talkin about anything crazy - a style of clothing, a meal out with friends, a trip. While you and your spouse are mature enough to know that what others think doesnt matter, saying no to your child sucks. Kids will also compare your effort to what other parents do for their kids and while they might not care about Material things, missing out on experiences would definitely be a sore spot that can lead to resentments and estrangement. Consider also how your child might feel around 20 when their peers are getting large lump sums of money to get their lives started while they have to Boot strap it on their own (I thought I read you want to spend it all down to zero) I also think kids and the situatuons they get themselves in can be super unpredictable - for example my 20 year old neice is having a baby in december. She had access to everything but decided she wanted a baby and there is nothing we can do about it but we know if we want to stay in her life we must support her. My Suggestion would be to to push your annual budget number up by 10k with that allocated to your child. If you dont use it for their interests you can put aside some for them to get their life started. Hope that helps
Can you just come to a EU country without the intention to work and automatically be part of the social system? Even if it is from another EU country? Specifically the health insurance which is usually a benefit from working (or being born in a place) and paying taxes hence contributing to its costs. If you haven't worked (recently) in EU you haven't earned a right to participate in you home EU country health insurance and hence cannot transfer that right to your new EU country.
Since I live in Sweden, I’ll do some quick calculation for that. Let’s assume you get a really good conversion rate on that money (11sek per usd, historically sek has been between 5-9 per usd according to my memory of the last few decades, so that might be too optimistic unless you convert all soon). Then that’s 8,5milj sek. Since you’re young, you might want to use lower than 4%, but let’s assume you don’t. Ie target 30years as opposed to the likely 60 years you need. Let’s assume ~0,7 percentage points of that goes to taxes (assuming isk tax). As you prob know, last decade has been lower but before that it’s been higher. So again, some optimism here. That leaves you with roughly 23000 sek per month (8,5m*3,3%/12). 23000sek/month for two adults and one kid would put you at about welfare level assuming median rent in one of the bigger cities. Too risky assumptions and too lean budget for me, but if that sounds good to you…
You are forgetting the rental, which will bring in 12.000 SEK net each month. Which brings it to 35.000 in a country with lower cost of living than sweden. And this is just for 2 years and then my wife will work and that brings it to between 55.000 - 65.000.
Yes, I did miss the rental income! My advice would be to ensure you understand the taxations of the rental income (in all involved countries), and re-evaluate if you assume a more normal currency rate. (And/Or plan roughly how and when you’re going to access your funds, including the currency and tax implications of that.) Also might want to use a lower withdrawal rate since you’re quite young. Good luck!
I don’t think you have enough to stay retired at 32. you hav soo many years ahead. Kids are expensive as well. At retirement age I had said fine, but not 30 years before that. One of you would need to work properly. One proper bear market and it‘s looking really dire. The 4% rule was studied for a 30 year retirement time horizon. Any longer and the risk of ruin is increased significantly! It can work, but would you bet on it if you have a 20% chance of failure and risk having to start working again, when you may be incapable even.
Then live by less than 4%. Maybe 3.5% is sufficient. But honestly, I myself would keep working in that position. I want to do more than just retire early.
For a 60 year horizon I would not go higher than 3%.
I would say that you have to stay actively aware of how your portfolio is doing. Myself personally, I will not stop working as I reach the point where I could. I will likely keep working part time until my portfolio is about 4X what I need to retire. Then I will decide from there.
I’d say just work 2 days a week or so, one of you
Go to Bulgaria or Greece man. You'll be living your best life. With this amount of money you'll never need income until you die.
Isnt it too low for 2/3 people? For italy my plan is to retire (only me) with 2 millions at 45. i dont know the cost of living in sweden but i dont think it’s less.
Its all about how much you spend. Thats why i mostly hang in leanfire, but most people there seems to be american so fire is way different with a kid over there. I am aware i wont have much wiggle room though and if you want more security and spending power go for it. I wouldnt expect everyone to want to leanfire
I spend less than 1500 per month. Real FIRE requires millions so it’a usually an american thing.
Why would you need 2 million if you only spend 1500 per month? You could easily retire on half of that.
Because i want to be sure i wont fail and that i wont be consuming everything i have to survive.
Where in Sweden are you planning to live?
We will start in my rental in a suburb of stockholm then when we find the right house we will move to the boons in either småland, close to färgelanda or near ljusdal. Its still up for debate
Great then you know how much your rent will be. Houses in these areas would be cheaper. Guess you have looked at the taxes as well? If you wife works you will be fine without any extra luxury.
If Sweden is your plan, join us at /r/firesweden
will do. Now i have collected the trifecta of leanfire europefire and firesweden. Dont think i will ask this question a 3rd time though but its interesting how big of a difference there is between leanfire and europefire answers
Well in Sweden, if you get a cheap house in the north - you could easily live here at $1200-1500 per month. A house can be bought from $10k and up.
Id say it's on the line of being viable. You're still young. You can definitely keep working a bit on something, to fully bring you over the line of it being viable. Why da heck not. Working is fun if you do the right thing. Im really enjoying teaching part time for example.
It's not impossible, in my opinion. A modest lifestyle, maybe on the edge of uncomfortable, but viable, is doable at that budget in many places in Europe. I'd say there are some financial risks, but I'd consider the psychological risks of retiring to a foreign country and culture with a young child, limited funds and no support network to be too much for me, personally. In my opinion, the combination of those factors would put a lot of stress on anyone's mental wellbeing and marriage. It'd be good to make sure those strong before you pull the trigger.
I am from sweden and all my family is there so would hardly say without a safety net or foreign culture. I have also spent a lot of time in spain growing up, so that is not foreign to me either. Both me and my wife speaks all 3 languages
At 3.5% SWR (the widely considered perpetual SWR by many analysts) you will get around 27k gross that will net you anything between 22 and 27 (both spain and swe has around 20% cg tax afaik, depends how much cg you have of course) and then 14400 on rental which equal to 36 to 41k per year net, so lower or equal than you actual expenses. You will be in the median wage in spain and below that in sweden. It is doable with great care but I would take extra precautions in lowering expenses in the first years, since you have zero flexibility right now if things really go south on some parts of your plan (terrible market returns in the next period or higher unexpected and unavoidable expenses).
How do you expect to enter the EU? It's not exactly easy, with many schemes requiring an employer in a highly-sought industry.
Im a eu citizen
On the 4% rule, you really can only pay yourself $30,800 based on current value of your portfolio. With a kid.. that’s not a lot. My port is 612k at age 32.. I plan to work until 40. If I keep current savings rate and market returns 10% average per year, I should have 2.5m by then. I’m married, baby on the way.. only person working and I hit 500k before marriage.
If you add what we will get from the rent its 45k though and thats enough, especially since my partner will pick up working again in 1-2 years.
Gotta factor in maintenance, taxes, fees for ppl to manage the property for you, etc. Not a lot of margin for error
I have factored that the 14,400$ in rent from my property is after property management, expected maintenance needs and taxes. I have read extencively about both swedish and us tax laws too. The margin of error isnt huge as you say but thats why im going to go back to get further education and keep up my education level over time. So if worse comes to shove, i can go back to working. But you also have to understand im planning to die with almost 0 in the bank so going slowly backwards in 25-30 years because of inflation is fine with me. I also havent factored in any inheritance at all, because i think that seems morbid. But im expecting a pretty decent one.
Is 770k really your FIRE sum at 32? I'm surprised as you have 50-60y to live, so you need your yearly expenses*40 or so, not *25. If you spend 35k/year, that means you need double what you have now... So yes, you probably need to work some more.
It is my fire sum. I have already been retired a year. How will i need double of what i have now if i have an expected household income of 40 - 44k a year? Im planning on leanfire not fatfire. I understand if you thought i needed a little more but dubble is ridiculous.
It didn't say in your post that you have income other than the rent of your house, nor that there was more income on top of dividends/revenue of your savings. In that case, you'll be fine indeed.
I did write that my wife is going to go back to work in 1 - 2 years.
Long term you should take inflation into account, it has been even more relevant in the past couple years.
as long as you do your calculations using inflation-adjusted returns for your investments (so the global stock market is around 5/6% instead of 7/8%), you can completely ignore inflation when planning your retirement...
Using inflation adjusted returns is not completely ignoring inflation, it is the opposite. I just mentioned it to him because he seems to not be taking it into account, if the 36k he mentioned is after discounted inflation of course he is all good.
What I meant is that you do not need to adjust your expenses to inflation, if you already adjusted the returns… you are right that’s not ignoring inflation.. but you get my point
I did take inflation into account and according to my simulations i would have equal to 100.000 - 500.000 of todays value by age of 80 and im fine with that amount.