It‘s still the same.
You just now have a new cost of capital gains taxes.
Also you have a big headstart in resetting the tax basis to 0, when selling before moving.
You just do the same thing again: invest all in stocks and bonds.
Of course real estate can be a part of a fire solution, but it‘s separate form the 4% rule.
Example: your own house simply reduces your housing cost.
Although I would say the 4% rule is pretty risky for fire before ~60. it‘s based on a normal 30 years retirement. Retiring before that means you need to be more conservative until you reach that age.
As stated by @Tony1337 , you account for the capital gains taxes in your expenses.
Let’s say you want to live on €60k, all other costs of life taken into account (including other taxes).
Using a 4% SWR, your FU# would be €1.5M.
Say 2% of that generates dividends, so you’ve got €30k of income coming from that.
You would need to sell shares to get the other €30k. Let’s say they’ve doubled in value since you bought them (when settling in Spain), that would generate #3.9k of capital gains taxes @26%, leaving you with only €56.1k to live on.
Now, if you take €65k as your expenses, your FU# becomes €1.625M, you get €32.5k of dividends out of it, you sell shares for €32.5k, pay capital gains taxes on €16.25k @26%, or €4.225k and still have €60.775k to live on.
So, in this very simplified scenario, you accumulate 8% more assets but keep your withdrawing strategy the same.
Thank you @Wolverine@Tony1337@Luk_nuts and @nabalzbhf . Yes, by doing what you suggest would typically delay the FI year. I was wondering if you know of you know in the forum which countries would allow better conditions to move in or even if there is any country close to EU that would grant you the fiscal residency with attractive conditions and not paying much taxes and neither pushing you to be 6 months and 1 day minimum in that country.
I think Andorra has a flat rate of 10% taxes for example.
Not sure if it is nice to live in Andorra though. Sure you have the mountains and all, but the cultural offering is rather low (museums, concerts etc.).
Just in general - if taxes are much lower, often infrastructure is of lesser standard and cost of living (especially housing and health) is much higher.
Well… I was thinking if it allows to have a residency but not an obligation to be there 6monts+1 day
Andorra it’s a no go only if it makes sense. I know many many rich people (youtubers and players) are moving their residency to Andorra, so maybe they are flexible with how many days you stay.
Who have totally different wealth profile than us normal people.
The cost for you setting this up is just much higher than you will ever save in taxes (plus the risk that your actual residence will actually say screw you, you are tax resident here).
BTW, there has been some high profile cases in the last years catching up with those (“fake” residency in the bahamas, but actually living in Spain).
Hmm you’re asking if there’s a tax haven that doesn’t care if you actually live there?
But what matters will be about you paying tax where you live, Spain (or anywhere else) won’t care where you’re paying tax, if they deem you a Spain resident you’ll owe them tax.
(And there’s lots of cases of people trying to be domiciled in eg Monaco while spending their time elsewhere, if won’t pass scrutiny from the tax office when they start looking)
It would be nice to have a comparison of retirement countries a see what are the advantages of each one of them and how it affects your FI Date.
Made up example: in Spain with 100k salary you would pay 40% taxes and this much on capital gains. Portugal 20% taxes and no capital gains…
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only if it makes sense. I know many many rich people (youtubers and players) are moving their residency to Andorra, so maybe they are flexible with how many days you stay.