Before You Start
- Understand your current annual spending in EUR (track at least 6 months of expenses).
- Know your country of residence and any potential destinations for early retirement.
- Familiarise yourself with basic investment platforms accessible in Europe (e.g., Trade Republic, DEGIRO, Scalable Capital).
- Have access to a spreadsheet tool (Excel, Google Sheets, or Numbers) for calculations.
- Be aware of your expected tax situation post-retirement (consult a tax advisor if uncertain).
Time needed: 60–90 minutes
What you'll need: Expense records, calculator or spreadsheet, access to European broker accounts
“How much to retire early Europe?” is the question at the core of every European FIRE (Financial Independence, Retire Early) journey. The answer isn’t one-size-fits-all—cost of living, taxes, healthcare, and your desired lifestyle all play a role. In this tutorial, you’ll learn how to calculate your real FIRE target for a European setting, using EUR figures and 2026 realities. We’ll use actionable steps and real-world scenarios for both solo and family retirees across several countries.
As we covered in our complete guide to F.I.R.E. in Europe, understanding your “FIRE number” is the foundation for all future planning. This deep dive will walk you through every calculation, assumption, and pitfall—so you can make your numbers work for your life.
Step 1: Calculate Your Target Annual Spending in EUR
What to do: List your expected annual expenses for your target retirement lifestyle, in EUR. Include the basics (housing, food, transport), plus extras (travel, hobbies, gifts).
- Housing: Rent or mortgage, utilities, maintenance, property tax (if applicable).
- Healthcare: Insurance premiums, out-of-pocket expenses, co-pays, dental and vision.
- Food: Groceries, occasional dining out.
- Transport: Car costs, public transport, travel abroad.
- Other: Entertainment, clothing, gifts, education, emergencies.
Why it matters: Your FIRE number is entirely driven by your spending. Underestimating expenses is the #1 cause of FIRE plan failure.
What can go wrong: Forgetting irregular but significant costs (e.g., replacing a car, major dental work, supporting family).
Pro Tip
Use Numbeo or Expatistan for up-to-date cost of living estimates in your target country.
Sample Budgets (2026, Monthly, in EUR)
| Country | Solo (Urban) | Couple (Urban) | Family of 4 (Urban) |
|---|---|---|---|
| Portugal | €1,600 | €2,400 | €3,400 |
| Germany | €2,200 | €3,100 | €4,400 |
| France | €2,100 | €3,000 | €4,200 |
| Poland | €1,200 | €1,900 | €2,600 |
| Spain | €1,700 | €2,600 | €3,600 |
Annualise by multiplying by 12. Example: Germany solo = €2,200 × 12 = €26,400/year.
Step 2: Add Taxes and Healthcare Premiums
What to do: Estimate the taxes you’ll pay on investment withdrawals and any mandatory healthcare premiums.
- Use your country’s tax rules for capital gains and dividends (after FIRE, you may be in a lower tax bracket).
- Check if you’ll need private health insurance (common if retiring before state pension age).
Why it matters: Taxes and healthcare are often underestimated. Failing to plan for them can create a shortfall of thousands per year.
What can go wrong: Assuming zero taxes (rare). Not accounting for future rule changes.
Pro Tip
Use Brokervergleich Tax Calculator for German investment taxes, or your national equivalent.
Example: Germany, Solo Retiree (2026)
- Annual spending: €26,400
- Healthcare (private): €350/month × 12 = €4,200
- Investment taxes: ~15% on dividends and capital gains (assuming use of Freibetrag/personal allowance)
Total needed before tax: €26,400 + €4,200 = €30,600
Amount needed after tax: €30,600 ÷ (1 – 0.15) ≈ €36,000/year
Step 3: Choose Your Safe Withdrawal Rate (SWR)
What to do: Decide what percentage of your portfolio you’ll withdraw each year. The classic rule is 4%, but many European FIRE seekers opt for 3.5% or lower due to taxes, fees, and market uncertainty.
Why it matters: The lower your SWR, the larger your required portfolio—but the safer your plan.
What can go wrong: Using an overly optimistic SWR (like 5%) can result in running out of money, especially with long retirements, high inflation, or market downturns.
Pro Tip
For most Europeans, 3.5% is a conservative but realistic SWR after taxes and fees. Use 3% if you want a greater safety margin or expect higher healthcare costs.
Step 4: Calculate Your FIRE Number (the Math)
What to do: Divide your required annual spending (after taxes and healthcare) by your chosen SWR.
- FIRE Number = Annual Spending ÷ SWR
Germany, Solo, 2026 Example
- Annual spending (after taxes and healthcare): €36,000
- SWR: 3.5% (0.035)
- FIRE Number = €36,000 ÷ 0.035 = €1,028,571
This is the portfolio you’d need, invested in a diversified mix (e.g., global equity ETFs), to safely withdraw €36,000/year indefinitely.
Portugal, Family of 4, 2026 Example
- Annual spending + healthcare + taxes: €3,400 × 12 = €40,800; add €3,000 for healthcare = €43,800; assume 10% tax = €48,667/year
- SWR: 3.5%
- FIRE Number = €48,667 ÷ 0.035 = €1,390,486
Step 5: Add a Safety Margin
What to do: Increase your FIRE number by at least 10–20% to account for unexpected costs, inflation spikes, or lower-than-expected returns.
Why it matters: A safety margin is your insurance against the unknown—health emergencies, policy changes, or market crashes.
What can go wrong: Not including a buffer. Many early retirees regret not having extra for flexibility or major life changes.
Pro Tip
Use a separate “emergency fund” (6–12 months of expenses in a high-yield savings account, e.g., N26 or Revolut) in addition to your investment portfolio.
Applying the Margin
- Germany, Solo: €1,028,571 × 1.15 = €1,182,857
- Portugal, Family: €1,390,486 × 1.15 = €1,599,059
Step 6: Model Different Scenarios
What to do: Run your numbers for multiple countries and living situations. Consider how moving to a lower-cost country or downsizing could impact your target.
Why it matters: Flexibility can make early retirement possible years sooner. Many Europeans achieve FIRE by geo-arbitrage—living in lower-cost regions with the same portfolio.
What can go wrong: Ignoring future lifestyle changes (children, caring for parents, returning to work part-time, etc.).
Scenario Table: FIRE Numbers by Country & Household (3.5% SWR, 15% buffer, 2026)
| Country | Solo | Couple | Family of 4 |
|---|---|---|---|
| Portugal | €634,286 | €951,429 | €1,599,059 |
| Germany | €1,182,857 | €1,636,286 | €2,324,571 |
| France | €1,128,000 | €1,611,429 | €2,258,286 |
| Poland | €362,571 | €574,286 | €785,143 |
| Spain | €670,714 | €1,025,143 | €1,418,286 |
Step 7: Choose Your Investment Platform and Asset Allocation
What to do: Select a European broker and choose diversified, low-cost investments—usually global equity ETFs.
- Popular brokers: Trade Republic, DEGIRO, Scalable Capital
- Popular ETFs: iShares Core MSCI World UCITS ETF (EUNL), Vanguard FTSE All-World UCITS ETF (VWCE)
Why it matters: Low fees and strong diversification are key to sustaining withdrawals over decades.
What can go wrong: Over-concentration (e.g., all in home country stocks), high-fee products, or using brokers not regulated in the EU.
Pro Tip
Set up monthly automated investments. In Trade Republic: Tap “Portfolio” → “Savings Plan” → “Select ETF” (e.g., VWCE) → Set amount and schedule. You should now see your first ETF purchase confirmed, with a value of approximately your chosen amount in EUR.
Step 8: Plan Your Withdrawal Strategy
What to do: Decide how you’ll generate income: sell ETF units, take dividends, or a mix—while managing taxes.
Why it matters: Poor withdrawal planning can trigger unnecessary taxes, penalties, or running out of money early.
What can go wrong: Withdrawing too much in a market downturn, or not optimising your withdrawals for tax efficiency.
For advanced withdrawal strategies tailored to Europe, see our ETF withdrawal strategies for FIRE in Europe guide.
Common Mistakes
- Underestimating healthcare or tax costs, especially when retiring before state pension age.
- Ignoring inflation—always update your numbers annually.
- Relying on a single income source (consider side hustles or part-time work; see top side hustles for FIRE).
- Not rebalancing your portfolio or checking broker fees regularly.
- Failing to account for children, family support, or major one-off expenses.
Next Steps
- Read our 2026 Guide to F.I.R.E. in Europe for broader strategies and investing principles.
- Automate your monthly investing and savings (see how to automate your FIRE journey).
- Explore FIRE-friendly multi-asset ETFs for hands-off investing.
- Optimise your pensions and private investments (see how to optimise EU pensions).
- Review your plan annually and adjust for market changes, inflation, and life events.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Always do your own research and consider consulting a qualified financial advisor before making investment decisions.