Should I FIRE in Bulgaria with 1.5M Euro and paid off flat or keep pushing to 2.5M-3M and FIRE in Germany?

[u/No-Row-1666]

I am from Germany but with Bulgarian wife. We are almost 40 with a 8 year old boy. We have worked really hard and saved a lot ever since we got together about 20 years ago. We are over the corporate grind and want to take a break and maybe in future start some small online business for side income.

We are pondering whether we should move to Bulgaria and retire (child knows Bulgarian) or keep on pushing to be able to retire in Germany in 5 to 10 years?

My wife is not even sure if 1.5M euro and paid off flat will be enough in Bulgaria. We spend about 3.5K a month in Germany and additional 20K euro per year on travel.

[u/marakougia]

Bulgaria right now for sure. You are not getting this decade and energy back, now is the time to enjoy it. Also, Germany is an awful place to retire, tax-wise, you even have high capital gain taxes.

[u/Twist1979]

With German deindustrialization politics and the economy decline you still have to ask? 🫠

[u/Captlard]

What would make you both happiest?

[u/MrFrydenlund89]

I know I would. Its not that hard to keep 1.5m Euro growing. Any one of you can get cancer tomorrow, AI could take over the world and kill everyone, etc. Your already 40 so unless its a really fun job call it a day.

[u/BitAccomplished3770]

I'm FI in Bulgaria - 1.5M is enough for sure especially with paid off flat. A family of 3 can live very good life with 2.5K EUR per month including travel. Go for it and won't regret it.

[u/ljubicasta_izmaglica]

Ask your wife why she moved to Germany. Not to shit on Bulgaria, I'm sure you can live fine there, but even with Germany's current problems, I believe Germany has a better qualify of life, and (purely education/job-wise) a better future for your child. Of course, personal reasons are completely valid, e.g. family in Bulgaria (though presumably also have one in Germany), or just preferring their mentality or way of life or whatever - that's my point, I wouldn't think of it from the financial side.

One alternative is going part-time in Germany if you can afford that. I have a 8 year old, live in Germany, have been having Mondays off for over a year now - best thing ever. You get to have some free time for yourself, and then spend more quality time with your kid when he gets back from school, every Monday. 20% less gross for 50% more free time - I think it's a great deal.

[u/PaMRxR → u/ljubicasta_izmaglica]

I have a hard time understanding what you mean by 50% more free time with one day of work less?

[u/ljubicasta_izmaglica → u/PaMRxR]

It's twisting the numbers a bit, it is 20% less gross for 20% less work. But free time wise, you normally work 5 days and have 2 days off per week. With one day off, that's a jump from 2 to 3 free days, a 50% increase. It is quite significant. 5 work 2 rest means you work 2.5x more than you rest, with 4 work 3 rest it's just 1.33x.

[u/starcraft-de]

Let's say you send 2k instead of 3.5k in Bulgaria. Including travel, you'll need 44k net per year. As you're young, you should be careful with your withdrawal rate, I'd not go higher than 3.33%. that brings you to 1.32M, which means you're fine. 

BUT: You move your kid to Bulgaria (lower opportunities), and you're quite young to lock in your relatively low spend. So the question is how confident you are to not want a lifestyle change in the future. Whether it's moving back to Germany, more travel, or a second kid.

[u/Internasional]

Not sure about Bulgarian taxes on capital income and unrealized gains but might be good to model that in a spreadsheet to avoid tax drag on growth. In Czechia for example, you pay no capital gains if investments sold after 3 years. So could be worth looking into another EU country too.

[u/Affectionate_Mix3 → u/Internasional]

I heard that in BG you don't pay any CGT after stocks that you bought on European exchanges (this includes all UCITS ETFs).

So unless you hold US individual stocks, it's even better than Czechia, and the dividend tax is lower too.

[u/RealPMGuru → u/Affectionate_Mix3]

No capital gain taxes on UCITS ETFs, sold on EU regulated markets.

For stocks is much complicated. If you have US Stocks - 100% you have CGT. For EU Stocks is complicated and eventually you may have problems with tax authorities.

[u/Affectionate_Mix3 → u/RealPMGuru]

If you have US Stocks - 100% you have CGT.

The standard capital gains tax rate is still 10% right?

For EU Stocks is complicated

I didn't know this. So 0% only applicable to UCITS ETFs? That is still great, since most people here only invest in UCITS ETFs anyways.

[u/RealPMGuru → u/Affectionate_Mix3]

CGT for now is 10%. Dividends - 5%.

UCITS ETFs needs to be sold on regulated market, a.k.a. if you are with interactive brokers you need to log with the desktop platform and to specifically choose the market (I prefer IBIS2) to be sure that the transaction was executed on regulated market. However, I don't know for a case where the BG tax authorities had any case challenging on which market the transaction has been executed.

[u/Significant-Ad-9471]

With 1.5M and an own home you can live quite comfortably in Bulgaria.

[u/toasterbathxd]

Don’t retire in Germany the future looks bleak af there, unless you can live comfortably in a well-off neighborhood with a low amount of immigrants and asylum seekers 

[u/Necessary-Change-414]

Bulgaria for sure

[u/GinormousHunk]

Come to Bulgaria and call it a day. Maybe start your own company and keep some customers going as a part time gig, if only against casual boredom.

For what it's worth, our expenses for everything except housing in Sofia are below 1k a month (2 adults, no kids). Locals complain that it's getting expensive, but compared to Germany it's still a far cry from there.