FIRE in Europe – the US playbook doesn’t work here. The maths does.
No 401(k), no Roth, no US ETFs. Here’s what financial independence looks like under European rules, plus the savings rate table.
The US playbook, in one paragraph#
Most FIRE content is written by Americans for Americans. Fill your 401(k), where the employee limit is $24,500 in 2026. Add a Roth IRA. Buy a cheap US index fund. Retire on the 4% rule and sort out health insurance somehow.
Great. Now try that from Munich or Tallinn.
FIRE stands for financial independence, retire early. I care mostly about the first half: work becomes a choice. The idea travels well. The instructions don’t.
What stays the same: the maths#
You’re financially independent when your portfolio can pay for your life. How fast do you get there? That depends on one variable more than any other: the share of your net income that you save.
A high savings rate works twice. You invest more. And you need less, because you’ve learned to live on less.
Guess first
At a return of 5% a year after inflation, which is my assumption for the model. Your income doesn’t matter for this, only the savings rate does.
| Savings rate | Years to 25× spending | Years to 30× spending |
|---|---|---|
| 10% | 50.9 | 54.4 |
| 20% | 36.3 | 39.5 |
| 30% | 27.6 | 30.5 |
| 40% | 21.3 | 23.8 |
| 50% | 16.4 | 18.5 |
| 60% | 12.2 | 14.0 |
| 70% | 8.6 | 10.0 |
Assumptions: you start at zero, your savings rate stays constant and the portfolio returns 5% a year after inflation. That return is my assumption for the model, not a forecast. Historical returns are not promises.
Why 25 or 30 times spending? That’s the 4% rule and its careful cousin. I explain both in how much you need.
No 401(k), no Roth#
There is no European 401(k). Every country has its own pension wrappers with its own rules, and most of them lock your money away until pension age. Not much use if you want out at 50.
So in practice, the European FIRE portfolio sits in a normal, taxable brokerage account. Less elegant, more flexible: no contribution limits, no penalty for early access. Nobody tells you when you may touch your own money.
Employees also pay into the state system, whether they like it or not. In Germany that’s 18.6% of gross pay in 2026, shared with the employer. Any private company that forced you to buy and changed the terms afterwards would have a problem with the prosecutor. Here it’s called the generational contract. What you get for it comes further down.
UCITS instead of US ETFs#
The famous US tickers are not on the menu. EU rules (the PRIIPs regulation) require a standardized key information document, at most three pages, for packaged investment products sold to retail investors. US fund companies generally don’t produce one for their US-domiciled ETFs, so EU brokers don’t offer these funds to retail clients. Three missing pages, and Brussels has protected you from the cheapest funds on the planet.
You’re not missing much, though. The same indices are available as UCITS funds, the European fund standard, mostly domiciled in Ireland or Luxembourg.
There’s even an upside. If you don’t live in the US and are not a US citizen, your heirs may have to file a US estate tax return once your US-situated assets exceed $60,000. Shares of US companies count. Tax treaties can soften this. A UCITS fund is not a US company.
How to pick one: investing in Europe and accumulating vs distributing.
Health insurance: cheaper than in the US, not free#
In the US, health insurance before 65 is the classic FIRE problem. In Europe you can usually stay in the public system when you stop working. But you pay for it, and the rules are national.
Take Germany. Without a job you’re usually a voluntary member of statutory health insurance. And then the contribution is based on all your income, including capital income and rent. Yes, your dividends too.
Guess first
The insurer assumes a minimum income of €1,318.33 a month and takes 21.1% of it. With a high capital income the bill goes up to about €1,226.
Put this line into your budget before you hand in your notice. Not after. Not in Germany? Ask your public insurer two things: what you pay without a job, and which income counts.
Your tax bill depends on your address#
Guess first
That’s the rate on share income above DKK 79,400. Below that it’s 27%. Same fund, same gain, different address.
The US has one federal system. Europe has a different one in every country. Two examples I checked for 2026:
| Country | Tax on gains from shares and funds |
|---|---|
| Germany | 25% plus 5.5% solidarity surcharge on the tax, together 26.375%. €1,000 allowance per person. For equity funds, 30% of the gain is tax-free. |
| Denmark | 27% on share income up to DKK 79,400, 42% above. Thresholds double for married couples. |
Other countries tax by holding period, by wealth or by progressive rates. If your plan depends on selling fund units for 40 years, this matters as much as fund fees. Look at the Danish top rate again and tell me your address doesn’t matter. The German details are in ETF tax in Germany.
What happens to your state pension#
Stopping at 45 doesn’t delete your pension claims. Take Germany again, the system I know best. Five years of contributions are enough to qualify for the standard old-age pension. Your earnings points stay on your account and keep rising with the pension value.
Three things change:
- Fewer points. 20 years at average pay are 20 points. At the pension value of €42.52 (since July 2026) that is €850 gross a month, not the €1,913 of the 45-year model pensioner.
- No early start. The pension begins at the standard age, which is 67 for everyone born in 1964 or later. Starting at 63 requires 35 insurance years and costs 0.3% per month.
- The system itself. The level is under pressure for our generation, and I wouldn’t bet on politicians fixing that. See the pension maths, with figures for seven countries.
Elsewhere the questions are the same: how many years you need for any pension at all, what happens to your claim once you stop paying in, and at what age it starts.
Worked in several EU countries? Then each country pays its own part once you reach its pension age, as long as you were insured there for at least a year. Periods from other EU countries count towards the minimum periods.
So your plan has two phases. First the bridge years, funded completely by the portfolio. Then a phase where the pension covers part of the bill.
Geographic arbitrage inside the EU#
Americans move to cheaper states. Europeans have 27 countries and free movement. One of the few things the EU got properly right. Use it.
Eurostat compares price levels for household consumption, with the EU average set to 100. For 2025:
| Country | Price level |
|---|---|
| Denmark | 140 |
| Ireland | 136 |
| Luxembourg | 132 |
| Poland | 73 |
| Romania | 65 |
| Bulgaria | 63 |
A basket that costs €30,000 at EU-average prices costs about €42,000 in Denmark and about €18,900 in Bulgaria. At 25 times spending, that’s a target of €1,050,000 or €472,500. Same life, half the number. These are national averages, so capital cities and your own habits will differ.
Change the spending and watch your own number move.
Your state pension follows you: inside the EU it’s paid wherever you live. The German one, my example, is paid in full in the EU, Iceland, Liechtenstein, Norway and Switzerland.
What also follows you is paperwork. A move changes your tax residence, your health insurance and sometimes the tax on gains you built up before. That’s where a calculator stops and an adviser starts.
My short version#
- Copy the maths from the US playbook, not the account types.
- Use UCITS funds in a plain brokerage account.
- Budget health insurance and taxes as fixed costs of freedom.
- Treat the state pension as a late, small bonus level.
- Decide where you want to live before you calculate your number.
The course takes you through this step by step, from the first budget to the exit plan.
This article is education, not investment, tax or legal advice.
Sources#
- IRS: 401(k) limit increases to $24,500 for 2026
- IRS: Some nonresidents with U.S. assets must file estate tax returns
- European Commission: Key information documents for PRIIPs
- Bundesgesundheitsministerium: Beiträge der gesetzlichen Krankenversicherung
- Deutsche Rentenversicherung: Rentenversicherung in Zahlen 2026
- Deutsche Rentenversicherung: Die reguläre Altersrente
- Deutsche Rentenversicherung: Renten für langjährig Versicherte
- Deutsche Rentenversicherung: Rente im Ausland
- Your Europe: State pensions abroad
- Einkommensteuergesetz § 32d: tax rate on capital income
- Einkommensteuergesetz § 20: saver’s allowance
- Solidaritätszuschlaggesetz § 4: surcharge rate
- Investmentsteuergesetz § 20: partial exemption for equity funds
- Skattestyrelsen (skat.dk): Buying and selling shares and securities
- Eurostat: Household consumption price levels across the EU in 2025
Education, not advice. I don’t know your situation, and past returns promise nothing. Check my numbers, then make your own call. You’re a grown-up.