Hey Seeker of Retirement Bliss,
So, you’re living the life in Western Europe with a sweet €350k apartment, only 30k left on the mortgage. You’re eyeing that early retirement dream, aiming for the next 12 years to be the golden years, free from the shackles of work. But to really make it work, you gotta be able to keep the good times rolling for another 20 years without a job. Once that’s done, the government’s got your back with some pension action.
You’re ready to drop €1500 a month into something exciting and profitable, but what exactly? That’s the million-dollar (or euro) question.
You’ve got a few ideas floating around, like upgrading to a bigger pad, but the pesky extra income tax that comes with selling has got you second-guessing. Or maybe you’re thinking about diving into Dollar Cost Averaging with some fancy ETFs, but the 6% tax threshold over 100k seems a bit daunting. And hey, there’s always the option of building up a nice cash stash and waiting for the market to take a nosedive. But then again, inflation’s always lurking around the corner.
So, what’s a retiree-in-the-making like yourself to do? Any other bright ideas out there? Is your dream of early retirement actually doable? Let’s figure this out together.
Catch you on the flip side!
Seeking Retirement Chillaxation
Response from HELP ME RETIRE:
Hello There,
Congratulations on your diligent planning for retirement! It’s clear that you are thinking ahead and considering various options to secure your financial future. Given the details you shared, it seems like building a cash position may be a practical approach considering the current market conditions. While it’s true that cash can depreciate due to inflation, it also provides you with the flexibility to take advantage of potential market downturns. Timing the market perfectly is nearly impossible, but having cash on hand can position you to buy low when opportunities arise.
Regarding the concerns about income tax implications with selling a bigger house and the tax on savings and stocks exceeding 100k, it’s important to consult with a financial advisor or tax professional to fully understand the implications and explore potential strategies to minimize tax liabilities. As for Dollar Cost Averaging (DCA) into well-established ETFs, it can be a sound investment strategy over the long term, despite the 6% tax threshold after 100k. Diversifying your investments and spreading out purchases through DCA can help mitigate the impact of market volatility.
Considering your goal of sustaining 20 years of retirement without a job, it’s essential to have a well-thought-out plan that balances risk and return. You may also want to explore other investment options such as real estate crowdfunding, peer-to-peer lending, or rental properties to diversify your portfolio further. Keep in mind that achieving financial independence requires discipline, continuous monitoring, and adjusting your strategies as needed.
In conclusion, your goal of retiring early in 12 years is realistic with prudent financial planning and a clear investment strategy. Taking into account your current financial situation and risk tolerance, a balanced approach that combines building a cash position, DCA into ETFs, and exploring alternative investment options could help you achieve your retirement goals. Remember to seek professional advice to tailor a plan that aligns with your specific circumstances and aspirations.
Best of luck on your journey to retirement!
Warm regards,
HELP ME RETIRE
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