And why you should do it anyway!
Good: you don’t need a car!
I HATE driving. Moving to a city where I could easily get around by walking, biking, or taking a train was a huge motivator for me to move out of the US. Germany has a 49 Euro per month transit ticket that works on every train, bus, or tram (except the high-speed trains). No parking fees, car insurance, or car payments!
Bad: Higher taxes
It’s no secret that taxes are way higher in Europe in general. However, I was surprised that overall my taxes weren’t that much higher than what I was paying in San Francisco as a tech worker. In particular, I do account for the much-less-favorable capital gains and dividend taxes in my FIRE calculations. But I get the impression that my taxes are going more towards helping people and maintaining infrastructure. So that’s nice!
Good: so. much. vacation.
It is normal to get 30 days of vacation per year, not to mention another 10-12 state holidays depending which state you live in. Some people even take the entire month of August off!
Not to mention the other types of leave! Germany has 6 weeks of fully paid sick leave, generous parental leaves, carer’s leave, bereavement leave, and probably others that I missed. Sometimes, the work day ends early because it is too hot outside. Amazing!
Bad: health insurance prices
Wait, I thought health insurance was cheap in Europe?!? I never paid anywhere near this much for health insurance in the US! I was flabbergasted when I saw the prices (here is a handy calculator). Generally, if you are employed, you pay half and your employer pays half. However, if you aren’t employed or are self-employed you need to pay the entire price which can be quite steep for public insurance. That being said, there are no deductibles and you will not go bankrupt if you get seriously injured or ill. Worth it? Maybe…
Good: workers rights!
Germany has a strong and active culture of workers rights. When my international company wanted to do layoffs, US employees woke up to a termination notice. In Germany, they have to get agreement with our Works Council (similar to a union) which resulted in voluntary leaves with generous severance packages. Not to mention that the Works Council can help with unfair performance ratings, pay inequality, excessive working hours, and all sorts of other protections that I didn’t know I needed.
Bad: doing foreign taxes in a foreign language
Moving to a foreign country is like learning how to be an adult again but in a language you barely understand. Also, as a US citizen you are always required to file taxes in the US even if you did not step foot in the country. The US keeps a very close eye on foreign bank accounts, for good reason, but it leaves lots of opportunity to make a mistake.
My tax situation is too complicated to do by myself. I hired great tax advisors who charge a fairly steep fee, but I suspect they are saving me money and headaches.
Good: groceries and alcohol are cheap and delicious
There are so many great, cheap grocery stores in Germany! Lidl, Aldi, or Edeka if you are feeling a bit more fancy. I was surprised how much my grocery bill dropped when I moved. Also, German beer is famously delicious and pretty cheap! Not to mention wines readily imported from Rhineland, France, Spain, and Italy. Yum!
Bad: less access to US tax-advantaged accounts
Goodbye 401k matches. Boo. Technically you can contribute to your 401k while living abroad, but it will likely make your tax situation more complicated and may not provide much of a benefit anyway (you should consult a professional tax advisor first! This is not tax or investment advice).
Good: strong economy and international commerce
Germany has one of the strongest economies in Europe and the world. There is a massive presence of international business including European offices of large American companies, an ever-growing start up scene in Berlin, and of course, the famous German car industry.
Bad: costs more to go home to visit family and friends
These days, I try to visit my family in the US during low season rather than trying to make it back for Christmas every year. Sometimes I tack on a family visit to an overseas business trip. Flight alerts will become your best friend!
Good: easily accessible top-notch vacation spots within Europe
On the flip side, Europe has sooo many wonderful, diverse, accessible places to visit! From the beaches of Croatia, to some of the best skiing in the world in the Alps, to world-famous cities like London and Paris, it can be so easy and cheap to fill up your many vacation days 🙂
Bad: people don’t really understand FIRE in Europe
In my experience, people in Europe have a much harder time understanding FIRE than their American counterparts. I’m sure there are many reasons why, but I suspect the main one is that work is just generally less miserable here so people don’t see the need. There is also much more of a sense of duty to fellow citizens and early retirement can be seen as selfish because you are supposed to pay in to the social security system until it is your turn to retire.
Good: expanding your view of the world and other cultures
Last but not least, living in another country has changed me in ways I never would have expected. I feel so much more sympathy for people immigrating to a new place, especially those who are not from another country in the West where the culture is relatively similar and visa applications are more favorable. Learning a new language from scratch has been scary at times but ultimately rewarding. People have challenged ingrained assumptions I never even knew I had and pushed me to see the world in a different light.
Conclusion
Moving to Germany certainly has implications on FIRE, sometimes for the better, sometimes for the worse. Honestly, it might be faster and easier to achieve FIRE living in a low-tax, high-income country like the US. But life in Germany can be more sustainable and enjoyable in a variety of ways. At the end of the day, that is what FIRE is truly about: living the good life! Prost!