It seems like many of us have thought at some point to spend their retirement abroad.
Switzerland is a wonderful country, but at some point the local cost of life makes us realize that with a given amount of capital we could retire earlier in other countries.
Therefore, i think it would be a good idea if each member could participate and give some tips an advice on countries they know particularly well.
The idea is is to give a broad picture of each country with as much relevant information regarding FI !
I would suggest the following template :
1) Quality of life :
Which cities do you like in particular?
What are some nice places where youâd like to live if you like nature? Mountains? Sea?
What are the local languages? Are they easy to learn?
Hi @Julianek, thatâs awesome idea! Let me begin then with the country that I know best.
POLAND
1 CHF = 4 PLN
Cities & cost of living
I think the quality of life is comparable to other Central European (Czech Republic, Slovakia), some Balkan countries (Slovenia) or Baltic countries (especially Estonia) and itâs a bit lower than parts of Portugal, Greece or Spain. The best salaries and quality of life is in Warsaw - but Wroclaw, Gdansk, Krakow are also ok-ish. I personally like Warsaw and Wroclaw for their quality of life and Gdansk, Krakow, Poznan and few other, smaller places for touristic reasons. Actually, if you calculate salaries of IT engineers adjusted by cost of living, you might be better off in Warsaw than in Madrid, Lisbon, Athens or most of the province/countryside parts of most Western countries. For example, I had better salary two ago in Warsaw than I was proposed on a job interview in Marseille!
There are local dialects/minorities languages in Silesia, Kashubia + Germans near Opole, Ukrainians/Belarusians/Lithuanians along the Eastern border, etc. However, Poland is boringly homogenous country - 97.10% of the people of Poland claim sole or partial Polish nationality, and 98.19% declare that they speak Polish at home. I think Polish is terribly difficult to learn.
Integration with locals
I think itâs fairly easy to integrate with local culture in big cities (especially Warsaw), since theyâre more globalised, more international and many (young) people speak English there anyway. In the countryside, I wouldnât be able to integrate myself.
Thereâre some cities that I donât find safe - usually the poorest ones. And there are some districts in most cities that are less safe - usually the poorest ones. For example, western part of Warsaw is generally safer than eastern part.
Poles are xenophobic (Iâd say people, especially older people, are less tolerant in the countryside, but in Warsaw they are ok - Poland in terms of tolerance is somewhere between Western Europe and Eastern Europe).
Car theft in Poland is part of everyday life (well, I think thatâs BS, check for instance this comparison)
Housing:
When I lived in Warsaw, for 45 m2 apartment I paid PLN 1300 (CHF 337), but it was kinda cheap. Iâd say rent is somewhere between PLN1500-3500, depending on what you need. Generally speaking if it looks nice, has a lot of room and itâs cheap - itâs usually far from city center and this can mean +1h commute to work.
Price depends a lot on the area + Warsaw is MUCH more expensive than other parts of Poland.
Cost of food:
Super cheap compared to rest of Europe and very good quality. I personally am proud of Polish food - meat and vegetables are of excellent quality. Polish Lidl is as good as German Lidl, but much cheaper.
Examples:
Cost of transportation:
= Gas: PLN4.50
= Uber:
Base Fare - PLN4.00
Per Minute - PLN0.25
Per KM - PLN1.30
= Public transport in Warsaw:
Subscription: ~PLN130/month or tickets: ZTM Warszawa
Cost of Healthcare:
Theoretically itâs for âfreeâ - in practice the state-funded health âcareâ sucks so badly, that most of the people with better salary gets a paid subscription/insurance in private hospitals anyway. For dentist visit, for example, you would pay ~PLN 50, if you donât have anything to fix, or about PLN150-300 if you need to fix some teeth.
How many years of expenses would be covered by 1M CHF?
I would say that in Warsaw 1M CHF works more or less like 4-5M CHF in Switzerland. Basicaly, most of the people in Warsaw earn between CHF 500-1500 (IT engineers ~CHF1500-2500). Average Monthly Net Salary is ~PLN3700 (CHF960). So if youâd like to live a nice life, Iâd say you need about CHF1000 per month. CHF1M / CHF1000 = 1000 months (83 years). If youâre more frugal, you can live 100 years with that money.
How are taxed capital gains?
19% flat rate capital gains tax + 19% withholding tax
How is taxed income?
19% flat rate tax if youâre self-employed or investor
What about social contributions?
~PLN1100/month if youâre self-employed or investor
VAT:
bloody 23%
Nothing comes to my mind, but feel free to ask. Iâd recommend to spend some time in Warsaw and experience it. Young people are super open, English speaking and pretty internationalized. Itâs a nice place to live, though to be frank not best for a tourist visit - it doesnât have too big old town because 95% of the buildings were destroyed during WWII.
Weather in Poland is somehow similar to Switzerland, but the winter seems to be a bit longer and itâs usually colder. In the summer itâs a bit hotter and more dry. I find it also less rainy overall than Switzerland or at least the weather is more predicatble and less changable.
"In winter, polar-continental fronts often dominate, bringing cold, frosty weather with temperatures far below zero an sometimes heavy snowfall. The late summer and autumn months are often influenced by dry, sub-tropical, continental air mass that bring plenty of warm days. The average air temperatures amount to 6 - 8.5°C for a year, the annual rainfall is 500 - 700 mm, of which snow constitutes only 5 - 20%.
The greatest amount of sunshine in summer is to be found on the Baltic coast, whilst in winter in the Carpathian Mountains. In the mountains, at any time of year, the climate is dependent on the altitude. In Warsaw, temperatures range from between 20 to 25°C during the summer months and O to -5°C in winter."
Source: Climate of the World: Poland | weatheronline.co.uk
Quality of life :
It is true that french people enjoy a good work/life balance. However, for someone looking for FI, that wonât be very relevant Therefore I think that the best thing in France is its food! Seriously, that is certainly what i am missing most here.
Cities :
Most people will think about Paris first. Paris is a very beautiful city (at least its center), but it is sensibly more expensive than other regions of France. For instance Iâd say that cities like Bordeaux or Toulouse offer a very similar quality of life for much less money!
There is also a phenomena that France is getting more centralized (contrary to what it may claims) : more and more people are going to Paris in hope to find a good job there and this leads to growing difficulties to find an affordable housing in the region.
Note that if you want to live in very isolated parts of France in the nature, this is possible : look for Ariege and Lozere departments for instance, and there is a good chance that you find a big house for not much lost in the middle of the beautiful nature!
Language : No surprise here, French is by far the most spoken language. People in big cities tend to speak english as well, but this disappears quite fast once you go in the countryside. French may be quite difficult to learn for non romance language speaking people, mostly because we have a lot of exceptions, and a lot of letters in the french words are not pronounced! Simple example : o, au, aux, eau, eaux, oh, ho are all pronounced the same : âoâ
Integration with locals : It will be very important to learn French. And a lot of local people think that the french way is better (how many times have I heard âCe syteme que le monde entier nous envieâ => âThis system, that the whole world is jealous ofâ⊠without actually looking if there is better stuff outside . You will have to adapt a lot to french customs.
Crime :
Most problems are in big cities suburbs. So if you donât plan to settle there (which I advice strongly against) you should be fine
2) Cost of life :
Housing :
There is a very big difference between Paris and the rest of France. Housing in the capital is up to 10 times more expensive than elsewhere ( but still cheaper than ZĂŒrich :D) If you want to buy there, even prices in historical working class districts like 12th district wonât be far from 10â000EUR/m2 ( see here for instance) so a 50 square meter apartment will cost around 500k EUR.
If you want to rent, the price is usually between 1200 and 1500 eur/month for the same apartmentâŠ
Letâs say you want to go to other big nice cities like Bordeaux, the price falls down to around 2-2.5k EUR/m2! (example) , and your rent would be around 650 EUR for a 50m2 apartment. Finally, if you want to live in the nature, you can find nice farm houses with land in Ariege and Lozere for a little bit more than 100-150 k EUR.
Cost of food : You should be able to buy food for less than 50 EUR/person/week if you prepare your own food. Restaurants prices ranges from 10 to 50 EUR usually (more for Paris)
Cost of transportation :
In Paris you wonât need a car. Public transportation costs ~70 EUR/month.
If you need a car, gas costs around 1.45 EUR/Liter
Train prices used to be not that expensive, but i cannot say that it is still the case anymore. Most of the time it is as expensive to travel by train as by plane if you want to travel across France. A single trip from Paris to Bordeaux will cost you 90 EUR. 180EUR back and forth! this is more expensive than a round trip Paris<->KrakĂČw by planeâŠ
Cost of healthcare :
This one is tricky. Officially, healthcare is âfreeâ and you will be treated well in France.
But if you look closely :
It costs a lot in social contributions on your payslip. For instance as a salary man in Paris the total of my contributions for health insurance was 800 EUR/month. Among other, there is this 15% âCSG/CRDSâ taxed at source for reimbusement of social security deficit, plus the official employee/employer contributions. In total, the system is more expensive than in Switzerland!
If you are self employed, you will have to contribute to RSI (the system for independent people), which is an absolute nightmare, asking you for a lot of money before you even start to be profitable.
Furthermore, the system runs on credits and deficits and the french administration has a really hard time to not bankrupt its social security system. I donât know how much time it will last.
How many years of expenses would be covered by 1M CHF?
The net median salary in France is 1800 EUR => that gives a median net annual salary of 21600 EUR. (Iâd say around 30k in Paris). 1M CHF would amount then to 42 annual median salary. If you speak in term of spendings :
When I was living in Paris it was possible to live frugally for 1500 EUR/month/person (it should be less on the countryside) (warning : I donât take taxes into account, more and that in the next section. Warning : it is a lot).
That would lead to 18kEUR/year and 1M CHF leads to 50 years of spending.
3) Taxes :
That is where things stink. There is a lot of taxes in France, and an administration that countries of the former soviet union would be proud of To give you an idea, 57% of GDP goes in public spending. Although a good part comes from debt, the rest comes from private wealth creation!
In the past there was is a saying that France is a good country to retire, but not to work. ( A lot of english people would come to spend retirement in France near the Loire region). Another issue is that tax laws are changing a lot and often in France, often in a disadvantageous way, which does not help to forecast what will happen to us during retirement.
VAT: 20%
Income Tax : -Until 9kEUR Income : 0%. Then 14% until 27KEUR. Then 30% until 71kEUR . Then 41% until 152kEUR, then 45%. Your worldwide income is taxed.
Capital Gains : they will be taxed at 34,5% (15.5% social taxes and 19% income tax) if it comes from real estate . If it comes from the stock market, you will have as well 15.5% of social taxes (CSG-CRDS) and the rest will be treated as regular income tax, with possibly some reductions.
As well as for your income, the capital gains are taxed worldwide as soon as you live in France. Update : now that Macron is president, he will change all of this into a flat tax of 30%, of which 15.5% are social taxes.
There is also a wealth tax in France above 800kEUR of assets : it varies from 0.55% until 1.5%
Property Taxes : There are two of them. You will have to pay the âTaxe Fonciereâ if you own your housing. In average it costs around 1000-1500EUR/Year. Then independently if you own or rent, you will have to pay as well the âTaxe dâhabitationâ : on average 1000-1500EUR/Year as well. That makes 2000-3000 EUR if you own your house! ( I checked with my parents, they indeed pay close to 3000 EUR in taxes for their house, which has am average surface).
Social Contributions : If you are salaried there are a lot of them : if your employer pays 100 EUR for your job after total contributions around 50 will go into your pocket. Then you have to pay Income taxâŠ
If you are independent, you have to pay the RSI, which is an absolute administrative nightmare.
If you are retired and earns a rent from a retirement system (pension fund, french public retirement system) you will have to pay, in addition to income tax, around 7% of social contributions.
How much social contributions and health system cost, when you are not working ?
Social contributions are part of the capital gains and income tax : they represent 15% of them. So if you donât work, you will still pay them.
However, the public health system is reserved to people either working (independent or salary), or retired people (in the classical term, i.e after being 62 years old ) earning a pension from the state (source for french speaking people). So if you are an early retired, you will have to contract a private health insurance. Iâve heard that people trying to quit the public health insurance system were contracting health insurances at Amaris (for instance) and the price were relatively fair.
So let us take an example : you have a 1â000â000 EUR stash and a paid house (letâs say it costs around 250kEUR).
Letâs be conservative with a 3% SWR rule and assume that your capital generates 30â000 EUR every year. Let us say as well that you do not work.
With the new flat tax on revenues fro capital at 30%, youâll be in for 9â000 EUR in taxes on your revenue, of which 4650 will be a social tax (the infamous CSG/CRDS). Note that this taxâs only purpose is to reimburse the deficit of the public social security. It does not give you any right on any social coverture, which is properly scandalous.
Which leads me to the next point, if you want social security you have either to work (not an option, you are retired), or
-a) subscribe voluntarily to the public social security (CMU, âCouverture Sociale Universelleâ) for 9% of your revenues, which is 2900 EUR
-b) take a private assurance, around 300 EUR/month for a whole family â 3600 EUR per year, in this case CMU is less expensive, but might require a complimentary insurance for everything related to eyes/teeth/really bad operations)
With 1â000â000 EUR capital and 250â000 EUR house you are considered a very wealthy individual, so you will have to pay the Wealth Tax (ISF, âImpot Sur la Fortuneâ), which in our case is 2500 EURâŠ
Now come the property taxes (âImpot Foncierâ and âTaxe dâhabitationâ) : 3000 EUR as well!
So you will have to pay to the state 17â400 EUR in various taxes and contributions, and your family will be left with 12â600 EUR to live with. I am really not sure that would be a sustainable scenarioâŠ
Note that Macron is currently trying to reform ISF and property taxes, and it might be in a beneficial way, but so far we cannot really say until the final law is passed.
4) Climate :
France has four broad climatic zones: the humid seaboard zone west of the line Bayonne-Lille with cool summers; a semi-continental zone with cold winters and hot summers in Alsace-Lorraine, along the rhodanian corridor and in the mountainous massifs (Alps, Pyrenees, Massif Central); an intermediate zone with cold winters and hot summers in the North, the Paris region and the central region; and a Mediterranean zone with mild winters and quite hot summers in the south of France.
In the South, the Mediterranean coast has the driest climate with any noticeable rain coming in spring and autumn. Provence (in the southeast) occasionally plays reluctant host to le mistral, a strong, cold and dry wind that blows in over the winter for periods of only a few days up to a couple of weeks.The Mediterranean coastline and Corsica have plenty of sunshine during the summer months, and refreshing sea breezes. Average daily maximum temperatures reach a warm 27°C in August, and an average of 12 hours of sunshine per day. 25-30 dry days per month can be expected during the summer season. On the Atlantic Coast and in Bordeaux, the climate is generally mild with temperatures averaging 11°C in winter, up to 27°C in summer, and rainfall distributed throughout the year. With the days fresh and possibly damp in the spring and often sunny in the autumn, the climate is one of the most important factors behind Bordeauxâs high quality wine it produces.
The weather in the French Alps varies from north to south. The northern Alps (the Savoy) are subject to oceanic influences resulting in abundant precipitation year round with low temperatures, and cold winters with sometimes heavy snowfall. Briancon, in the Alps, has a mean temperature of -2°C in January, and 17°C in July. During the warm season, local winds blow along this regionâs wide valleys and by midday, warm air rises from the valleys, causing clouds to form around most mountain summits. The heights can sometimes attract storms that are both violent and spectacular. The southern Alps (Provence and the Cote DâAzur) enjoy a typical Mediterranean climate, with lots of sunshine, dry weather, clear skies and no mist or fog. Autumn is the best time of year in this region. Occasionally, violent storms may occur, but they are always followed by sunny spells.
5) What happens if i am really sick and need a costly operation?
First, you will have to pay a flat fee between 18 and 30 EUR per day at the hospital.
Second, if your stay at the hospital is more than 1 month, everything will be reimbursed.
But, if your stay at the hospital is less than one month, social security cover only 80% of the medical costs, so youâl be in for 20%. Letâs say you need a heart operation, the cost can go from 15kEUR (small operation) to 50kEUR (coronary bypass) to a gigantic 350 kEUR (heart transplant). So depending on the case, you might need a private coverture as well.
In a nutshell
Pros : Food is awesome, the nature in France is wonderful, Paris is beautiful if you want to live there, as well as other big cities
Cons : if you plan to live from your capital in France, it is very subpar from a fiscal point of view.
That is all for the moment, feel free to ask if you have more questions!
One main point for which it is hard to get info:
How much social contribution and health system cost, when you are not working ?
Early retirement is not always considered the same as self-employed or retiree with a state pension
My goal would be to live with the 4% rule, so taxes, social contribution and health system could be a big part of the budget.
There also another interesting concept that I am exploring is perpertual traveller (PT).
In Poland thereâs a special income tax called âexchange taxâ and individual investors pay this from their income + social contributions just like a self-employed person. Thereâs no much difference if you work or not.
@wapiti and @Mr.HdLR Thanks for your suggestions. The pattern and the main posts have been updated! And the remark about taxation, healthcare and social contributions when we donât work anymore is very relevant, because usually the info is only available for people able to speak the native language. One more reason to share our insights about our respective countries!
I lived in Warsaw for 10 years, now in Zurich. Warsaw is indeed interesting to live, it is the place with a busy old town, large shopping malls, and the biggest media coverage. Skyscrapers, subway and modernized streets make you feel like youâre living in a place of constant development. The access to services is also fantastic. Zurich, in comparison, seems to be more sleepy, lower scale.
That being said, Warsaw is good for making career, but might be a bit too big for living. If you want to live in the center, you will have to pay extra. If I considered moving back to Poland, maybe I would consider Gdansk / Tricity Area. It is smaller than Warsaw, but still big enough. And it has the sea.
Weather in Warsaw is a bit worse than in Zurich. Summers are hotter, but winters are colder. From November to March Poland can be a cold depressive place, like most of Northern Europe.
Fully agree. One the downside, itâs much bigger city, so city center in rush hours might be pretty crowdy. Zurich in comparison is pretty spacious and calm, even during rush hours.
Iâd never live in a city center, especially in a +2M people city. Itâs expensive, itâs crowdy, itâs smoggy, itâs nuts. There are better places in Warsaw or in close distance, where you have more forests and nature: Kabaty, Bielany, MĆociny, Bemowo, WesoĆa, Otwock, Kampinos, etc, etc.
Although Iâd agree that Tricities area (or Wroclaw, or Krakow) are awesome places to live as well.
I find not that bad. In comparison to Zurich, itâs pretty similar just a bit more extreme.
I lived at the outskirts of Warsaw. I would not recommend it. The outskirts are full of âmodernâ blocks of flats, which have been built fast during the real estate hype. These areas (Kabaty, Bemowo) are essentially âbedroomsâ. If you want to do anything interesting you have to go to the city. And unless you live directly by the Metro station, it will take a long time.
It will still take some years until I achieve financial independence, but that is exactly what Iâm thinking. Switzerland is great, safe and beautiful, but very expensive. As long as I have a job here, I will enjoy living here. But when I decide to retire, I will want to either move out, or spend a lot of time abroad. I guess, ideally, I would like to keep the Swiss domicile and just stay abroad as long as these other countries would allow me.
For a long term stay, I was so far considering Poland (my home country, very low cost of living) or Spain (great weather, low cost of living).
I think there is something missing on those examples:
How much does it cost a week in a hospital? How much a heart transplant? etcâŠ
For example is not clear to me if the private healthcare in Poland costs 10/100/1000chf per month or less and if I have an heart attack it will cost me all my money or not. This is to me the most important part of all this thread, since if I want to move to Poland (looks nice) I want to know what I would expect when Iâm 70 and I might have to go to the hospital.
Btw, right now here in Switzerland Iâm not 100% sure how much a heart transplant will cost.700chf from the base costs, but I read somewhere that many things should be self paid. Iâm a bit ignorant on this (Iâm healthy )
On a side note: I am opening a new thread about investments abroad. here
Excellent point, I will create a thread to discuss health insurance cost in each country and also for globetrotters.
Private insurance could refuse you when you get older
I would like to come back to this : I am getting more and more interested about living in Poland in the future, so Iâd like more details (my learning of polish language is not yet at a perfect levelâŠ)
How are taxed capital gains?
19% flat rate capital gains tax + 19% withholding tax
How does it work? Is it 38% total? PreviousIy I had read that capital gains were 19% total. How is this withholding tax levied? What if I have an IB account? Would polish authorities be able to impose this withholding tax on the revenue of this account? (I am not trying to not pay taxes here, but of course i prefer to pay them when they are due after I declare them, instead of the State unilaterally taking a part of my money without asking).
What about social contributions?
~PLN1100/month if youâre self-employed or investor
From what I understand, the âZUSâ is the organism in charge of social contributions and social security/health insurance/retirement. If what I have read/trying to translate is correct, people in Poland are not happy at all about ZUS (poor services with a high cost)
If I am not mistaken, ZUS forces you to contribute only if you are working. Is that correct? Would an early retired person living from the revenue of his capital be considered as not needing to pay ZUS? Or would the local authorities consider his investing revenues as a work? In my case I would then only need to pay a private health insurance, which would cost (for the fanciest) around 900 PLN per month for a whole family).
This is not such a trivial question because I realized that if you are not contributing to local social security scheme in Poland, then Swiss Authorities agree to pay you immediately your second pillar (you have to wait until being 65 else). Would that be possible as well?
Hey @Julianek, I think itâs 19% in total. At least this is how I understand websites like this one:
âDywidenda otrzymana przez osobÄ fizycznÄ , stanowi u niej przychĂłd z kapitaĆĂłw pieniÄĆŒnych, o ktĂłrym mowa w art. 17 ust. 1 pkt 4 updof. PrzychĂłd ten powstaje w dacie wypĆaty dywidendy lub postawienia jej do dyspozycji udziaĆowca/akcjonariusza. Jak wynika z art. 30a ust. 1 pkt 4 i ust. 6 updof, od przychodĂłw z dywidend pobiera siÄ 19% zryczaĆtowany podatek dochodowy, bez pomniejszania przychodu o koszty uzyskania.â
This basically translates into dividends are subject to lump-sum flat income tax with rate 19%.
You can read more about it here:
If you need help with Polish translation, just let me know.
Yes. Itâs a symbol of pointless, wasteful, idiotic, corruption-generating, tragic, expensive, socialistic remains of the Polish state.
As far as I know, ZUS is obligatory. In fact, itâs even higher when youâre an entrepreneur or an individual investor. However, thereâre some tricky ways to omit it and thereâre many tax lawyers offering help with that in Poland (for example: http://www.zustoniemus.pl/ ).
I think this can be omitted - itâs enough to go for Mexico for a longer vacation and ask Swiss authorities to transfer your 2nd pillar to your Mexican bank account. Otherwise, I donât know how it looks if youâll go directly to Poland.
I need to read more about it because I also consider potentially going back to Poland once reaching FI.
19% capital gains tax on realized capital gains (i.e. on sold stock) and 19% withholding tax on dividends. Itâs not 38% as these are two different things being taxed.
You are not forced to contribute if you are unemployed, thatâs true. If you are self-employed that you need to pay a minimum.
I would not be so harsh on ZUS⊠Itâs basically the same thing as AHV in Switzerland. ZUS is the first pillar. There is also OFE, the second pillar, but it is a part of a big scandal in Poland. Basically, the ruling party PO transferred the private money from OFE to ZUS, where this money only exists virtually. Practically ZUS has annually a huge deficite of billions of PLN and it has to be refinanced by the state. In future the situation is only to get worse. But this is a problem that most of European countries are having, I guess.
Thatâs correct. However, the remaining part is treated as income as far as I know and it is subject to the income tax (flat 19% for individual investors, itâs called âpodatek gieĆdowyâ).
Yes, but for the Polish authorities youâre not unemployed if youâre selling stocks.
Well, itâs more wasteful (in terms of operation/bureaucracy costs), otherwise itâs the same, as itâs just transfer from taxpayers to retirees. However, for some wierd reason in UK you pay lower social security premium and you can expect bigger pension - maybe the immigration makes the difference. Anyway, I have similar opinion on both ZUS and AHV and all other welfare state institutions.
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Therefore I think that the best thing in France is its food! Seriously, that is certainly what i am missing most here.
. You will have to adapt a lot to french customs.
