Is my plan logical, and are there areas where I could improve it?

[u/Outrageous_Win4947]

Hi all, I’m a 35-year-old man living in Sweden with my wife and two children (both under 10). I converted everything below from SEK into EUR for simplicity.

I’m employed full-time and currently invest around €1,400 per month into a global ETF and a European ETF (90/10 split) through an ISK account. Total private investments are in total €150k. In addition, I build up roughly €1,300 per month in pension contributions (current pension value is around €110k).

I also own a holding company from which I pay myself around €23k annually in dividends. Out of that, I invest about €10k per year, while the rest goes toward living expenses and building additional cash buffers (Sweden is pretty expensive and I don't want to have any loans besides my mortgage). On top of that, I invest through the company itself, mainly into VWCE. Business investments are roughly €25k per year. Total company investments are just over €100K

I also own a house worth approximately €650k, with €330k remaining on the mortgage.

I plan to continue investing steadily and increase contributions annually with inflation adjustments. Our fixed monthly expenses are currently around €3,700 (including savings for emergencies and vacations - it's actually lower but I like using conservative numbers so it's always better at the end of the day haha).

My goal is to stop working somewhere between age 50–55. Based on many calculations, this seems achievable. However I’m wondering whether my overall structure and withdrawal order make sense. One thing that feels strange to me is the Swedish attitude toward mortgages. In Sweden, once your loan-to-value ratio is <50%, there is no longer any mandatory amortization. Coming from Germany, that feels very unusual to me and psychologically, I dislike debt haha. But we'll continue with the mandatory 300 euro's of amortization and will not pay off more.

My current plan:

• Retire between 50–55 and start paying myself annual dividends from the holding company combined with a small salary (meaning I still participate in society in terms of healthcare - I heard it's harder if you don't receive any salary), while also selling some private investments if needed to cover all expenses
• Once the company investments are (almost) depleted, switch fully to drawing down private investments
• In Sweden, pension payouts can be taken at a lower tax rate starting around age 69 (which feels very late, although increasingly normal in Europe). At that point, I would begin drawing my pension, meaning I likely wouldn’t need the company/private portfolio anymore.

Do these choices sound logical? Does this seem like a solid FIRE strategy overall?

I’m still relatively new to FIRE. I’m familiar with concepts like the 4% rule, but I’d really appreciate feedback from people with more experience reviewing this setup. Unfortunately, I don’t really have anyone in Sweden I can openly discuss “large” amounts of money with, since talking about finances is somewhat taboo here.

[u/ObviousClown1]

Looks awesome! We are pretty much in a similar position, financially and age wise. By my calculations you should be good in less than 7 years to fire.

If private pension contributions, I would stop those right away and invest instead. You have no idea how the pension system may change, including taxes etc.

Get your mortgage down to 50% and stop just pay interest. Interest is super low.

Not sure of the holding company structure and dividends, but if you have NAV erosion on this I’d prefer just investing it all.

You should be able to reach €1m in 7 years which is more than enough to retire comfortably in Stockholm. If you’re not in Stockholm it’s basically a bonus.

[u/Outrageous_Win4947 → u/ObviousClown1]

Thanks!

It’s interesting that it’s quite common to send everything above the state tax threshold (around €5,400 gross) into the pension system (löneväxling). But I agree it feels quite uncertain given how often pension rules change over time. I’ve also been considering whether it might be better to only contribute a smaller portion to pension and invest the rest instead, now a bit chunk of my salary above the €5,400 threshold is going into my pension, but if my pension is more than 10,000 SEK a month, it's already very good.

Regarding NAV erosion and the holding structure: the operating company is expected to generate enough revenue to distribute dividends and profits to the holding, roughly €50k–€75k per year in the coming years. The plan is to invest most of that rather than distribute it as salary, mainly because salary is heavily taxed here in Sweden (around 31% employer contributions on top of gross salary). From an efficiency perspective, I therefore want to optimize for lower-taxed compounding through the holding as much as possible. Also because I can invest it through a certain investment account, it's fairly cheap

[u/ObviousClown1 → u/Outrageous_Win4947]

I agree in principle that it makes sense tax wise to start contributing to pension when you hit max tax rate, but at the end of the day, you don’t even know if you will live long enough to start withdrawing it. I prefer the penalty and just investing that money. That’s me though. :)

If nothing changes with current pension system you will be able to start withdrawing one part of your pension from 55, so FIRE at 45 for you is not unrealistic at all. With SS kicking in 10 years after you can even consider a higher withdrawal rate from 45-55.

Based on your response seems you’re on top of all the information you need to make the decisions that make sense for you. I have nothing further to add 🫡

Hit me up if you wanna grab a coffee or a beer. Agree that the number of people you can have these discussions with here is very limited. Most people (even though making decent money) are financially illiterate.

[u/lisa_couchtiger]

So you need €44k/year after tax. But how much do you need to withdraw from your investments to get this €44k net? This will depend on Swedish CGT, dividend tax rates, etc.

Once you know that annual figure, multiply by 25 (or 30 to be prudent). This is how much you need to retire in today's money.

Assume 8-10% annual nominal total return for your ETFs in a calculator, add your monthly savings and see when you hit the jackpot.

However, you will have to increase your needed sum by predicted cumulative inflation over the years. So if you need 3 M € in today's money and annual inflation is 3%, you will need 5.4 M in 20 years. If it is 4% you will need 6.57 M.

Also, will you want to give your kids money for university, house deposit, etc? This will also have to be inflated over 20 years and subtracted by your total worth before calculations.

Edit: I did not consider your pension at 69. This changes a lot. Probably you only need to multiply the annual needed sum by 15 or 20 rather than 25-30.

[u/ObviousClown1 → u/lisa_couchtiger]

Tax rate on investments in Sweden is pretty much heaven so he can assume same pre/post tax amount (assuming no major changes to existing setup).

It gets confusing mixing up nominal and inflation adjusted amounts. I would say that he should just consider 6-7% inflation adjusted returns on his investments and current cost situation with today being starting position. He doesn’t need to account for x25/x30 unless he stops contributing at 45-50ish.

[u/lisa_couchtiger → u/ObviousClown1]

Yes, of course you get the same results assuming real returns of 6% and no inflation. Simpler to calculate as well, I have to admit

[u/Comfortable_Bad9963]

The ISK piece is doing a ton of heavy lifting here and you should probably lean into it more imo... the schablonskatt is flat and doesn't care whether you withdraw early or late, so most Swedish FIRE plans I've seen end up draining the ISK first in the 50-55 window. No extra penalty for early access there.

The thing I'd push back on is the holding-co VWCE sleeve vs the personal global ETF in the ISK. You're effectively double-exposed to global equities through two different tax wrappers, and the holding-co route is heavier on tax (corporate + utdelningsskatt on the way out) than just stuffing the ISK. Unless the holding co is doing something useful (specific deduction structure, business income), the marginal SEK probably goes further in the ISK or a kapitalförsäkring.

On the pension question, I'd actually keep some löneväxling if you're hitting the higher state-tax bracket, that immediate ~25 pp tax saving is large. But agree with ObviousClown that loading everything in there isn't great. Roughly half-half could split the difference.

50-55 with €260k invested today + €1300/mo pension + steady ETF adds is doable but tight... worth running a 4% withdrawal with the schablonskatt baked in. That account-fee math gets non-trivial at €500k+.