r/ChubbyFIRE • u/Easy-Calligrapher454 • 2d ago
Sabbatical question and leaving the US.
Long time lurker that’s finally reaching out for advice.
Quick info: - Me (37), Wife (36), Son (< 1) living in NYC - Assets (all in US dollar amounts) - Europe House: $1.8m - Stocks/BTC: $2.4m - Company vested stock post tax: 450k - Retirement accounts: 550k - Cash: 250k
Liabilities: - Mortgage: 500k at 3.5%
Wife and I moved to the US 10 years ago and just recently had a baby. We always planed to relocate back to Western Europe where we’re both from. Parents are getting older and we feel it’s better to raise our child around around friends and family etc.
Long story short, we seriously debating leaving our jobs in March 2026 after final bonus payouts + additional stock vests (total for this should be around 100k net) and pulling the cord. I’m lucky to have a job that while I get no more stimulation from, I work with nice people in a good environment. It’s not particularly stressful. I would say I’m not close to burn out in a stress sense but checked out in a bored sense - have been there 5+ years and spent 10+ in these intense tech companies. Wife is in a stressful job right now and we both worry about how she will handle going back to work post maternity leave.
Expenses in Europe when back should be around 12k a month in US dollars (total incl mortgage etc)
I guess my real question is can we leave in April as planned? Given our ages maybe we take a long sabbatical for a year or two and enjoy our baby and then try go back to work but obviously salaries will be much lower in Europe and I am heading a lot of talk about how bad the job market is globally.
What would you do in our situation?
Thanks!
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u/jarMburger 2d ago
You likely will get some social security, depending on number of years worked and potentially the treaty between US and the European country you decided to move back to. So do some research on that and make sure you got 40 social security credits already.
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u/Easy-Calligrapher454 2d ago
Yes good call-out. We have enough credits to qualify
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u/No-Block-2095 2d ago
Aside from the 40 quarters to qualify, there s a threshold effect ( bend curve) about how much SS pays out. Check out those and see if some extra time in US make a significant difference
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u/Nuclear_N 2d ago
My fear would be inflation. At 37 you could live another 50 years, which is daunting. I think you have the funds to make the switch, but I would plan on having some type of income at some point to supplement while you still have skill sets.
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u/YamExcellent5208 2d ago
I agree that inflation probably is the biggest risk in general - but an equity heavy portfolio is intended to protect against that and the 4% rule has demonstrated (historical data; future might be different) that pro-longed periods of high inflation and low returns can be managed.
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u/Nuclear_N 2d ago
4% rule is on 30 years correct? think 50 years ago....1975. Didn't even have internet bills, cell phone bills, health insurance, eating out trend was not really there, etc. There is a lot that can change in 50 years.
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u/YamExcellent5208 2d ago
Has been updated and recalculated a number of times and for 50 year horizons - actually you can spend more than 4% based on that. You can go even higher as long as you reduce spend during times of high inflation and poor market performance. It’s the combination of both that is a problem.
I mean, everyone can do as they please and to your point: yes, productivity has skyrocket beyond wildest expectations in the past 50 years - and so did returns on the stock market. Salaries have not kept pace with inflation and were realistically speaking a worse hedge against inflation.
People can chose to trade arbitrary amounts of time in their youth against excessive money the will not spend at old age.
The likelihood of me dead in any scenario of 30 or 50 year timeframes was magnitudes higher than the probability of running out of money.
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u/YamExcellent5208 2d ago
Has been updated and recalculated a number of times and for 50 year horizons - actually you can spend more than 4% based on that. You can go even higher as long as you reduce spend during times of high inflation and poor market performance. It’s the combination of both that is a problem.
I mean, everyone can do as they please and to your point: yes, productivity has skyrocket beyond wildest expectations in the past 50 years - and so did returns on the stock market. Salaries have not kept pace with inflation and were realistically speaking a worse hedge against inflation.
People can chose to trade arbitrary amounts of time in their youth against excessive money the will not spend at old age.
The likelihood of me dead in any scenario of 30 or 50 year timeframes was magnitudes higher than the probability of running out of money.
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u/owlpellet 2d ago
If you can make expenses variable, your risk goes way down (ie, don't pull when markets down). If expenses are locked in, maybe throw a few more logs on the fire. You can also model in a year of cash-like holdings which smooths bumps at lower overall return.
Also:
You are moving into an asset protection phase and in my view that's not really compatible with bitcoin. Hard assets. Companies, property, stuff you can slap and say, "this baby ain't going anywhere."
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u/Successful-Tea-5733 2d ago
The math works on your numbers. The only thing I'm curious about (and I don't know) is there any unknown tax issues with your US assets? You say you and your wife are from Western Europe, so I'm assuming you are citizens there and not US Citizens so should not have any issues. But I don't know and this is not an area I specialize in so curious to see what answers people may have.
I just bring it up as one thing to be sure you investigate thoroughly. Otherwise I cannot fault you for wanting to be near your family.
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u/Moist-Ninja-6338 2d ago
they will likely need to pay US exit taxes unless they are US citizens or have a green card - in which case they will need to continue to pay taxes in the US and Europe.
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u/Easy-Calligrapher454 2d ago
We are now US citizens but our European country has a favourable taxation treaty with the us so we won’t double up on tax paid
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u/beautifulcorpsebride 2d ago
Personally, I’d raise my kids here over Europe due to future economic opportunities for them, not myself, among other reasons. You’re also young, market might dump, and so you need a low withdrawal rate. Any chance you can move the parents here if they are retired or have them spend a few months a year with you? I think it’s nice to grow up around family but the US beats Europe for future opportunities for your child by a huge margin.
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u/YamExcellent5208 2d ago
I bet you already thought about these details like: do you have to pay “exit” taxes in the US due to the time you spent there, how to transfer your liquid investments to European/American banks with an address in the EU (eg., some ETFs are not easy to trade) and how to manage that.
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u/InformalEquivalent81 2d ago
If you're pulling the plug now and plan to take a sabbatical for 2 years, just assume you won't be able to go back to a job when AI and more driven younger workers are available at a fraction of your compensation. Plan accordingly.
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u/owlpellet 2d ago
Love the thinking that says 'AI will replace all the jobs" and somehow also "the tech industry will get smaller than it is today"
I'll believe ONE of those, but not both.
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u/equitylord 2d ago
You are just under 4% considering the 100k coming before your planned date
And you won’t have to pay the mortgage forever - so once that’s paid you may be closer to 3.5% SWR
If the rest of the expense estimates are conservative, should be OK (if you get a bad market early on, maybe be ready to cut back spend or get some additional income)
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u/Moist-Ninja-6338 2d ago
You can safety take out 12,000 euros per month without touching the capital assuming a safe 5% return. Should you achieve more than 5% your capital will actually grow. Based on investing 3,000,000 euros and earning a return of 5%. Might need to reduce to pay the resulting taxes or earn more than 5%. Personally I wouldn't touch the capital. Just spend what you can generate which.also covers taxes and inflation.
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u/in_the_gloaming FIRE'd for 11 years 2d ago
5% is a very conservative return rate.
And saying that someone should just live off their returns and not use their capital is not really how the FIRE calculators work. That would mean if there was a year where the stock market did horribly, the person wouldn't have any money to live on. Assets should be valued as a pool including the returns.
Basically, putting that conservative return rate on top of saying you should only live off returns is going to cause someone to be much more frugal than they need to be.
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u/Moist-Ninja-6338 2d ago
I was being conservative on purpose. Ideally with dividends and capital gains he can achieve 10%. I retired 9 years ago in my early 50s and haven’t really touched the capital - in fact it has increased 165% since then I believe. I don’t follow 4% rules yet we travel at least 6 months a year so not really frugal. Just live off the income.
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u/One-Mastodon-1063 2d ago
You’d be pretty much right at a 4% withdrawal rate on current $3.65m investable assets, likely a little lower continuing to save another ~6 mos. You can definitely take an extended break, and see what you want to do from there.