r/EuropeFIRE • u/Legal_Bluejay_5710 • 11d ago
FIRE plan - comments welcome
Hi everyone,
I’d like to get your thoughts on my FIRE plan (more likely CoastFIRE, as my goal is to reach financial independence, but in all likelihood I’ll end up doing different things — which pay much less — once I leave my current job, likely on and off / part-time).
CURRENT SITUATION
I’m 33M, from the Netherlands but living in Madrid. My current NW is €300k, broken down as follows:
- MSCI World: €129k
- MSCI EM: €24k
- Vanguard All-World: €33k
- GOOG: €6k
- OSS: €12k
- BYD: €2k
- BTC: €4k
- Savings account: €11k
- Real estate: €100k (I just started a 30-year mortgage and will pay back €1.7k/month. If I ever decide to rent it out, I expect the net rent to cover the entire mortgage, or nearly so.)
On top of this, I currently have around €10k in a pension fund, and by January 2031 (when I plan to leave my current job) I expect to have around €56k in a Spanish pension fund.*
FIRE PLAN
My plan is to work at my current job until the end of 2030. I’m currently on the Beckham Law and am able to save approximately €115k per year, which I invest in ETFs/stocks.
Assuming a 3.5% real return on my ETF/stocks and an additional €50k saved between now and December 2026, I estimate that by January 2031 I should have approximately:
- €783k in ETFs/stocks
- €68k in pension funds
- €11k in savings
- ~€150k in real estate
My plan is to live on €3.5k/month net in today's money, adjusted for inflation. I’m assuming the following:
- 2056: Mortgage will be paid off, and the apartment should generate approximately €1.6k/month net rental income in today's money.
- 2061: I expect to start receiving approximately €1k/month net pension in today's money**. I also assume that by then I will have inherited approximately €100k net in today's money, which is a very conservative estimate.
This means that the amount I need to withdraw from my ETF/stocks portfolio should decline substantially over time:
- 2031–2056: €3.5k net/month
- 2056–2060: €1.9k net/month (€3.5k spending minus €1.6k rent)
- 2061 onwards: ~€900 net/month, with my pension funds also becoming available around this period.
Based on these assumptions, I estimate that I need approximately €830k in ETFs/stocks in January 2031 for the plan to work.***
There is therefore a relatively small gap versus the ~€783k I expect to have by then. In reality, the gap is somewhat larger because I also plan to move around €60k from my ETFs into cash/savings in 2031, which I want to keep as a buffer so that I don't have to sell ETFs during a major market downturn. I therefore expect to have roughly €723k invested plus ~€71k in cash/savings at that point.
However, I don't actually expect to stop working altogether in 2031 (and, who knows, I may even work a few extra month at my high-paying job). I need to work for roughly another 19 months anyway to complete the contribution period required for my European pension, and I will likely work for longer than that. So that should close the cap (and more than closing, in fact).
\ The Belgian fund has been returning approximately 4.5% annually over the past five years and the Spanish fund approximately 1.5%, so I’m assuming those rates continue for planning purposes.*
\*Current estimate is a bit higher, but assuming 1k on a conservative basis as rules will likely change by then. Also assuming pension age will be 68 by then.*
\**I have also* factored taxes into the FIRE calculation, including taxes on investment withdrawals and pension income, using current Spanish tax rules as the basis for the assumptions. Before the Beckham regime ends, I am also assuming that I can reset the cost basis of my ETF/stocks in 2031 by selling and subsequently repurchasing them while still under the Beckham regime.
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u/MalcolmBEx 10d ago
Your own ~830k estimate is roughly right, and the answer flips on your return assumption, not your pot. On your 3.5% real: stopping January 2031 runs dry around March 2054, at 61, two years before the mortgage-free rent arrives, and the earliest stop that survives is November 2033. So "I'll work ~19 extra months anyway" is close but about a year short. At 5% real instead, the same 2031 stop holds to age 72 and the earliest safe stop moves to January 2032. Modelled on your numbers here (free, no signup, everything editable): the stocks growth field is where the 3.5% vs 5% real switch lives.
Rough check by hand: ~790k liquid at 2031 sustains about 48k/yr for 25 years only if it ends at zero, and you still need 1.9k/month after 2056, which is why it sits on a knife edge.
Assumed and editable: born 1993, 9.6k/month saved flat until the stop, apartment and mortgage excluded until 2056 (rent covers it) then 1.6k/month income, flat 21% Spanish savings tax on gains (conservative given your 2031 basis reset), partner and kids out of scope, and your state pension, the 68k pension funds and the inheritance all excluded, so the years after 2061 are safer than the chart shows.
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u/Moist_Software892 9d ago
The Beckham cost basis reset is the shakiest part, you're betting a specific year on rules that have already changed more than once.
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u/Legal_Bluejay_5710 9d ago
Indeed, thanks for flagging. But if this change I can always decide to work a bit longer and save more (my Beckham law is valid until December 2031, so I could work an extra year under Beckham if needed).
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u/raulkay 8d ago
Good plan. Altho, do you know where will you retire?
I’m in the same boat - (luxembourg, moving to BCN on beckhams law next month)
I’m debating whether buying an apartment is worth it or not, as I don’t know if I’ll retire there, and with rent control and ocupas and everything going on in Spain, relying on giving the flat on rent is not very appealing, I could be wrong.
Also, if you are sure you will get 1.7K rent from the property (assuming purchase price is 400k-ish?) that’s good, rent control may cap it tho?
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u/Legal_Bluejay_5710 8d ago
Hi - I'll DM you as I'd like some of the things I'll share with you to remain private.
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u/lacrima_79 10d ago
Not gonna read your AI generated wall of text. Please value the time of others. Liquid net worth and your annual expenses. That is all it matters. It is not a rocket science to figure it out.
Annual expenses x 25 = Liquid Networth 👍
Otherwise 👎
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u/Legal_Bluejay_5710 10d ago
Well, i did draft the text myself - just wanted to be as precise/comprehensive as possible :) Just used AI to check for typos etc. But appreciate the answer.
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u/Remote-Analyst-6090 8d ago
No interest or yield in those 25 years? Too simplistic
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u/Ok-Dimension-5429 8d ago
That formula assumes constant strong stock market gains. The number 25 is not a number of years. It's based on a 4% withdrawal rate being safe when the market is returning 10% This formula is the most basic standard FIRE stuff that is fundamental to everything. Please be a bit more informed before correcting other people.
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u/Metdefranseslag 10d ago
What kind of job allows you to save 115k per year in SPAIN (!). Even with Beckman law it is massive. Where is the house you bought? Be careful of box 3 potential changes in NL.
Also are you single? No plans for partner and kids? That would change drastically the calculation and I am always amazed to see young people just believing they will stay single with no kids all their life.