I’ve been a Mustachian and FIRE enthusiast for 10 years . However, I’m now at my wit’s end with my corporate job and need to prepare my exit to protect my sanity and mental health.
Current setup:
Income: 200k + 20% bonus
Swissquote portfolio: 650k
2nd Pillar: 280k
3rd Pillar: 125k
Apartment in Chamonix: worth 700k (with 130k mortgage, rented out)
Chalet in Chamonix: worth 1.8 million (with 850k mortgage)
Plan: Work 3.5 more years until 45 (currently 41). Sell the apartment to pay off the chalet mortgage. Move to the paid-off chalet.
I estimate to have $1 million in Swissquote and close to $600k in my 2nd/3rd Pillars. I would then withdraw 4% from my assets, i.e live off 60k annually. I feel I can live comfortably on $5k/month in France. My partner will continue to work her fairly well paid job in Geneva as a cross-border worker.
Additional ´bonus´ income: I plan to become a qualified mountain leader over the next few years and will then guide multi-day hiking tours when I retire. I may also do some consulting, and we will rent out the chalet 3-4 weeks a year during peak holiday periods.
Are there any major holes in my plan?
Thanks for your support and guidance!
(alternative options I´m considering might be to change role, change company or reduce workload to 80%. However this ´grin and bear it´ for 3.5 years plan seems best as another job may just end up being the same)
All good points. We could consider to sell the chalet and live in the apartment instead in fact.
True on the 4%, though I sense people are a bit overly cautious on it. With that said, I could certainly do more/less consulting work (or guiding/other work) depending on how the market and portfolio is performing.
And I suspect that Chamonix is not exactly a cheap place to live. But only suspect, I am ready for a surprise.
If you partner keeps working and you are retiring, wouldn’t it be more fair to live closer to his/her workplace?
Furthermore, you may want to check on taxes. A remotish place in cantons Fribourg, Valais or even Vaud might actually get overall cheaper than being a resident in France.
The plan sounds just about feasible for me. You don’t have much excess margin but it should work out. Just two thoughts:
Did you consider taxes, particularely when selling the Real Estate
Did you consider moving to a cheaper flat? 1.8M of house in Charmonix is a lot. If you moved to a 1M house, you had another 800k times ~3% aka 2k per Month to live a nice life
Congrats on realizing that your mental health is more important than FIREing with a higher net worth!
Your plan sounds like a plan to me given the flexibility you’ve built in (working again part time if necessary, maybe renting out your place, considering the apartment versus the house, etc).
I predict that even just having your plan in place will make the remaining 3.5 years more bearable for you.
You indicate in your current setup that you have 280k+125k=405k in pillars 2/3a. You also plan to have 600k in that bucket in 3.5 years. I assume you have a plan for filling in the missing ~200k.
You don’t specify how you plan to invest the money available to you when you FIRE. Not advising you, but you could pursue an income strategy versus a total return strategy to prioritize steady cash flow over (potentially) higher total return — this is what I am pursuing.
mix of the two points above: if I understand correctly, you’d have 1600k investable when you retire and need 60k cash flow annually. 60/1600 = 3.75% – to me, that’s pretty close to what I consider a reasonable return in a conservative allocation (many here would disagree with me).
I guess I would really encourage you to look in more detail how you want to be invested with your money once you retire.
bonus advice: if you stay with Swissquote (not recommended by Goofy) and your assets are above 1 million, Swissquote will charge you additionally “to cover external safekeeping fees”. Just tell them to waive those fees or you’ll move to IBKR.
First of all, thank you for the encouragement! And absolutely, I am expecting that having a plan and 3.5 year horizon will already do wonders for my well being.
All the technical comments are very helpful also. Thanks!
Well, its myself and my partner. It´s indeed way more house than we could ever need. But we actually design and built it from the ground up ourselves over the last 3 years (with the help of many good trade folk of course) so there´s a lot of emotional connection. With that said, we will have made a significant capital increase from building it ourselves, and being very financially effective along the way. And we are definitely aware of that and ready to downsize if it means an overall better quality of life and freedom.
Yes, french taxes. You would need to calculate that in detail. (@nabalzbhf have already given some interesting points). I think a 4% withdrawal rate will become a 3% after taxes.
I don’t think so, if you are asking me. The other comments contributed a lot of information.
When I read about living in France, the following picture came into my mind:
Crikey, yes you are right. 30% flat rate tax on capital gains or dividends will put a pretty serious dent in the 4% rule. Hrm, going to have to think through this one a bit more.
How much 1st pillar income would you expect, once you become eligible? With 20 years to go it is a little bit a stretch, but it could justify a slightly higher consumption rate from 45 - 65.
Otherwise I would run a small simulation to make sure you don’t run into a liquidity issue during a market crash. Assets you should have enough, but most is not easily accessible (2nd/3rd pillar and real estate).
Instead of quitting outright, maybe see if they agree to an unpaid sabbatical. In that time you can see if the mountain guide idea takes off, and it gives a (limited) hedge against ‘sequence of returns’ risk. If all works out, you can still quit after the sabbatical…
Looking at the question from a different angle. 3.4M$ net wealth and 3-3.5% safe withdrawal rate would mean an annual budget of 100-120k (8-10k /month).
That is a budget that would work for many people. A question is how much you allocate to housing and as already suggested by others your number is relatively high.
That is a personal choice. I’ve taken a different approach and don’t own my own accommodation. My savings more than pay the rent with 3% WR, and in fact long term I hope to earn 7%. The downside is I don’t have the luxury of owning my own place
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