r/EuropeFIRE • u/bunsy1505 • 11d ago
Can I fire?
Hi all. I am single 45M living in southeast Europe. My portfolio is 600000€ consisting of:
60% covered call etf’s ( winc, jeep, jeqp and syld )
25% pjs1 as stabilizator/cash reserve
15% vwce for some growth
I live im my apartment, fully paid off.
My monthly expenses would be 2000€. I am prepared to live with 1500€ if the market gets really bad.
What do you think, can I FIRE?
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u/PositiveKarma1 11d ago
No idea bout medical coverage there but GFY and retire.
P.S. if the market goes down, you can find a small job of 500 month to fill the gap.
If after 1 year you find the spending of 2k is not enough, you can find another job for 1-2 years.
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u/Weary_Strawberry2679 11d ago edited 11d ago
I think you're borderline FIRE, but unfortunately not enough to secure this with a peace of mind.
- Your portfolio consists of 25% cash, which means you cannot safely withdraw 4% of your entire capital. You'd may like to change that. For example, 600k fully invested in only-stocks or stocks (80%)/bonds(20%), plus more cash as reserve on the side (e.g. 72k for 3 years) could help.
- Speaking of which, you need to consider the "sequence of returns" risk which in bad times can cut your portfolio in half. That means that if you'd like to DCA your monthly out, a modified approach would be to take less when the market is falling, and more when it's rising. But with your estimates, it sounds like you won't be able to live off less than 4%.
- Have you took under account taxes, like capital gains, wealth tax, or anything else relevant in your country - that you may need to pay off when you sell / take dividends off your portfolio?
- Have you considered that 1.5k/2k p/m may not be sufficient when you grow older? What about travelling? Health expenses? Any other thing that you may want to blend into your retirement?
I'm not saying that FIRE is impossible. The stars could align and everything would work out, but if I were you, I'd step into FIRE territory only when I feel I can derisk myself enough to prolong it - without having to be forced back to work. That is especially since are only 45 years old and have quite a long way to go. YMMV.
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u/Helpful-Staff9562 11d ago
No covered calls, be mostly in a global etf like vwce, way kess cash, max 2 years ish of expenses. Rebalance accordingly
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u/WarpPipeWizard 11d ago
Sounds like you can, depending on local taxes, healthcare etc.
Maybe wiser to have some part time or occasional work so you're not just drawing down. At 2000 a month, you don't need to earn much to cover your lifestyle.
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u/MrWhite26 11d ago
Do you have a pension, at what age would that start?
That really decreases the long-term risk of running out of money.
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u/ApprehensiveHouse421 11d ago
We are the same age and if I had no dependants that would be enough for me to pull the plug. Assuming you don’t need to leave anything down to anyone it seems doable!
My fire target is a little higher and also wont pull plug until 53 giving less potential years to cover. But we have kids so extra expense
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u/tronquinhos 9d ago
4% sustainable withdrawal rate might be too close for FIRE (it has some assumptions that you might want to investigate: 30 year horizon, asset allocation,...)
A paid-off house and €600k is a solid starting point, but your portfolio setup has IMO three major flaws for a 40+ year retirement at age 45:
Covered call trap (60%): You are sacrificing long-term growth and risking capital decay. These funds look great for cash flow right now, but they miss big market rallies and still take the hit during crashes.
Lack of growth (15% VWCE): At 45, you need your money to outpace inflation for decades. Relying mostly on high-yield income instead of global equity compounding leaves your purchasing power vulnerable long-term.
Eventual Tax drag: Heavy yearly payouts from covered call ETFs trigger immediate taxes in most European countries, shrinking your net monthly budget faster than you think.
So, I think you are cutting it close. If you tighten spending to €1,500 during bad market years, it might work, but you need more growth and less complex dividend-chasing to make FIRE truly safe.
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u/m4573rj 11d ago
600000*0.04/12=2000, so yes, you can FIRE. Congratz and enjoy!
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u/rmagere 11d ago
However, the 4% figure assumes a 30-year horizon. At age 45, it is reasonable to plan for a 50-year retirement, so a rate of 3.25%–3.5% is likely more appropriate. Furthermore, the 2,000 per month is a gross figure, whereas expenses are net, so I think he still needs a bit more capital.
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u/Difficult-Bend1844 11d ago
🤣🤣.. if it was that simple.. ever heard of Inflation? So add 2-3% to it.. €2k in 10 years time buys you €1k-€1.5k. Oh, what about crises years with negative roi?.. another 1-2% to cover..
At 45.. you have a long way ahead if your Health is ok. I would say a larger pot of money to cover the years would be safer.. + as the country is not known, do you get state pension? That may help also.
+ don’t know what €2k/ month covers.. is this including reserving for periodic country visits/ holidays? Or only eat,drink, free Daily Walk in town and stay on your balcony? If this, I would not call it fire but surviving.6
u/m4573rj 11d ago
ever heard of investing? 7% yield on average, 4% withdrawal rate, 3% covers inflation, so you keep having the same amount of money in today's currency.
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u/Difficult-Bend1844 11d ago
7% May be the Average long term expected Roi but is Not guaranteed. In real life averages dont help you when periodically cash expenses need to be covered.
Averages reflect the whole Investment Community.. which means investors with bad luck and good luck.. How do you know in which team you are when you need every month a certain pile of cash?12
u/xroni 10d ago
This is a FIRE subreddit, why don't you learn a bit about the concept first, then you don't need to ask these kinds of questions.
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u/Difficult-Bend1844 10d ago
What makes you think I don’t understand the concept of FIRE?
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u/xroni 10d ago
Oh just a few things you said that kind of give it away, like "ever heard of Inflation", "what about crises years", "do you get state pension? That may help also", "don’t know what €2k/ month covers", "is this including reserving for periodic country visits/ holidays", "% May be the Average long term expected Roi but is Not guaranteed", "In real life averages dont help you", "investors with bad luck and good luck".
These basic concepts are always the same ones questioned by people not familiar with the concepts of FIRE.
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u/Difficult-Bend1844 10d ago
Ah I see.
Well OP mentioned monthly expenses were €2k/ month without mentioning what it included. Retiring early is something different than financially surviving each month over a long period. Just want to ensure all expected expenses are covered in the mentioned €2k.
And then €2k today is €4K in 10 years.
‘’Heard of Inflation’ was just a comment to make clear that it doesn’t stop with todays €2k expenses in Computing for FIRE ready.
If OP asks if the savings/ Investments are sufficient for fire, I Highlight items to consider/ help if the savings/ investment is ready for Fire at the age of 45.
Which I think is not, but opinions can differ.
But rest assured I am well informed about the concept of FIRE.1
u/Strazdas1 3d ago
Every comment of yours prove you dont understand it.
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u/Difficult-Bend1844 4h ago
Yes sure.. on the contrary your comment shows you are financial illiterate if you think my comments are off point.
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u/NotStompy 10d ago
Irrelevant since the size of his account is large enough that he can easily keep 4-5 years worth of living expenses in a cash-like bond instrument that keeps up with inflation give or take while keeping the rest invested which won't hurt his compounding too much while also allowing him to survive very long bear markets, and honestly if it goes past 5 years pick up half-time work for a bit, cut down expenses, etc; not an issue at all in any reasonable mind.
Also, what you're saying about averages makes no sense, the average is more like 8-9% long term but even conservatively 7% is certainly a conservative estimate of average CAGR across many decades if looking at index funds, which is the standard point of comparison so why would you look at the people who "bad luck and good luck" as you say when he's not stock picking...?
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u/Difficult-Bend1844 10d ago
Look, 7-8% doesn’t make a difference. It is about cashflow.
The 7-8% is a combination of direct (Dividends) and indirect (Capital gains). Periodic OP needs a pile of cash.
24k/annum in 10 years —> €50k/ annum.
So OP needs to free up this cash.
On €600k Portfolio, of which 60% are in covered calls on ETF’s (ie €360k) the dividends (if any from etf)are nowhere near the 24k/ or in 10 years €50k to cover the cash needs. so periodic selling may be needed. That’s where I see an issue.Markets have a wave pattern..highs and lows on Average every 10-15 years there is a big correction .. the latest 2007/2008 (credit crisis), 2020 (corona period) where markets easily loose 50% of their value..
This kind of Bumps need time to recover from.
One market bump, and your portfolio goes down with 50%.. your expenses continue to increase and cash is needed.. OP may be forced to sell more of his Portfolio in a down market to cover Cash expenses.. as the annual dividend yield is not enough to cover the periodic cash expenses.. and there you go. Into the spiral.
€600k to cover safely 35-40 years (Life expectation 80-85 for m-f) is a bit risky for Fire imo. It will bring you far.. but Not entirely carefree at late age. And there is the vulnerability, as at late age you cannot roll up your sleeves to earn income.
Continue for another 10 years.. save/ invest the additional income.. and that is a much better Position than squeezing your financial but cheecks at age of 70 and further..1
u/NotStompy 10d ago
And? I did say I think it can be a logical option to stash away 4-5 years worth of cash for longer bear markets and keep the rest invested as to keep the compounding going and not fail over time BUT that he should be open to the idea of working half time or cutting down on expenses in a worst case scenario if 4-5 years is not enough. I think this can be a reasonable compromise; also a lot of people realize being entirely retired for half your life is boring af, and then return to work half time or less or start a business of some kind/freelance.
I am not a fan of these options strategies in a zero sum market (options). Well, negative some, technically.
Also, I do think 600k is a borderline number.
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u/Difficult-Bend1844 10d ago
Yes, that is why I think €600k for FiRE at 45 is risky. It is a long way to cover. But opinions and expectations can differ.
I prefer to have a bit more flesh on the bone for FIRE. Better have it and not need it than need it and not have it.
The time factor (45) is also a risk. FIRE, Lets say the ‘RE’ part. If things look tight in 10’ years time, at 55 it is more difficult to re enter the job market with 10 years retirement as your most recent experience.
Working half time can be an Option and I think even better. It combines keeping the door open to re enter full time if things unexpected go south while experiencing some degree of Freedom.
Anyway.. hope our Exchanges are helpfull for OP to have a view on his FIRE plans. Thanks.1
u/bunsy1505 10d ago
Thank you for your comment. My calculations are based on 25 years horizon because in 20 years my pension kicks in and also rent from one apartment I own. Totaling cca 1200€ in todays money
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u/Difficult-Bend1844 10d ago
Ah ok.. that helps a lot.
As that was one of the open items.
With ‘only’ 20 years to cover and from then you have additional cashflow from pension/ rent covering 60% of your current cashflow makes it less vulnerable for a market crash.
As you are investing I am expect you are aware we are on our way to a blow off top followed by years of pain. That is why I am hammering on ‘market crash proof’ in your FIRE portfolio in the next years when it happens.If there is a crash on the Markets.. your PJs may not go down big. You can use this part by Selling bit by bit for what ever you need to cover the cash expenses while waiting the market to recover (ie no need to sell the ETf’s in a downmarket and it is ‘Only’ paper loss. Then your pension/ rent income kicks in to help.
To make the picture complete: What kind of etf’s is your 60% in (Wide index like SP500 or more volatile Like the nasdaq) and what is in % the periodic cashflow from the covered calls? 360k and covered calls may help a big chunk to cover the current cash outflow. For zero sum you need approx 7% cashflow. Not sure if your country tax this type of income, if taxed you may need a bit more for zero Sum.
As covered calls etf’s are cashflow wise a blessing, it is also a ‘curse’ (ie your fund is Not growing and subject to Inflation.2
u/Sassewere 10d ago
You’re clueless, read the wiki
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u/Difficult-Bend1844 10d ago
If have to turn to wiki for Investment Knowledge that will be the day.. thanks but no thanks.
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u/Artistic_Skin7350 11d ago
I think you can. I Am assuming you are single and plan to be that way. If things change you can also go back or just be a barista
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u/Strazdas1 3d ago
Sell all nonsense gambling, put all in VWCE and leave 2 year cash reserve. You can now live on 2k a month.
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u/SubstantialUse3884 11d ago
Idk which capital gains / income tax you have in your country. Even with 0%, the expected returns would be too tight for me for a full fire
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u/bunsy1505 11d ago
For dividends/distributions is 12%. For selling etf/stock which you hold for more then 2 years, its 0%
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u/Willing-Outside4798 Fresh Account 10d ago
You can probably LeanFIRE, but I wouldn’t call it financially bulletproof yet. At €600k your €24k spending is a 4% initial withdrawal rate at age 45, and your portfolio is unusually dependent on covered-call funds. I’d either work a few more years toward €750–800k, keep some ability to earn income, or restructure toward a simpler globally diversified portfolio. €600k is enough to make work optional. It isn’t quite enough to make money irrelevant
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u/Fantastic_Tree_9748 10d ago
Assuming that youhave a job, do you have 1 or 2 years of unemployment benefits? If so, those are two years of "income"
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u/RealPMGuru 10d ago
Why do you have 60% covered call etfs?
Do you understand how they work? Have you check previous history, how they behave in a different economic situations?
4% rule was based on passive index, predominantly for 60/40 strategy, but back tested for 100/0, 75/25, 60/40 and the 4% to some extend is workable, 3,5% is more reliable (considering the current high levels of the us market even recommended) however covered call etfs are not checked/back tested for retirement portfolio.
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u/AstroFire88 11d ago edited 11d ago
You have exactly my FIRE number + paid off apartment target. 2 years left for me, S-E Europe here as well. If you have some doubts you can keep spending lean in the first years of early retirement to limit sequence of returns risks. Check out the concept of Mullet FIRE. The only thing is your allocation which I think you might need to amend.