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> So let's say your target is €2M for a €60K/yr income until you die > Most software engineers in Europe probably don't even make €50K/yr These two statements

> So let's say your target is €2M for a €60K/yr income until you die > Most software engineers in Europe probably don't even make €50K/yr These two statements do not mix well together, if someone doesn't make 50k/yr it's unrealistic to expect to retire with 60k/year. Let's see more realistic numbers. You make 50k/yr, getting 35k after taxes. COL is around 25k, but that varies wildly; with a partner and each one's COL is lower, but with kids and it's higher. Of those 25k/yr, 15k are for rent. You save 830/month, which gives you 630k after 25y, or 25k/yr at a safe 4% withdrawal rate (gross, so not enough). But also let's say instead of paying rent you get a mortgage at that price, so when you own the place that is reduced drastically. Suddenly you find yourself with a COL of 12-15k/yr net, making 25k/yr gross from what you've saved previously. Sure it's tight, but these numbers are without extreme sacrifice that you mention. Get lucky and make 60-70k/yr, or find a cheaper place, or inherit something (a lot more common in EU that USA I'd think), and it now seems possible.

nly 5y ago
Yes, I realise those two statements are in conflict. However, it's still possible for someone earning €200K to not be able to afford to give up €50K a year of gross income to reach the 25 year target I described. High tax, high CoL, a non-working partner and kids can level your chances. And some costs are just fixed for everyone, so there's a lower limit to consider The bottom line really is the balance between CoL and earnings rather than absolute earnings. To achieve a given fraction, R, of your career salary in retirement you need to give up a fraction, S, now. My claim is that most people won't be willing to give up S to achieve the R they feel they need for early retirement (at say 50). Personally I feel that unless you're 20-25 and have hit it out of the park with a great career starting salary you may as well forget about it and look to retire later... maybe start investing for your kids instead. Give them the 20 year headstart they can't give themselves. Investing for a decade or two longer is the magic sauce
- franciscop 5y ago
  Sure, and I know someone who got like 80k inheritance and he bought a jet ski and a car, crashed the car and sold the jet ski within a year. Not all developers can retire within 25, but what I'm trying to say is that a significant fraction of EU developers can, if they learn and are smart about their money, either retire very lavishly at the normal retirement age or retire 10-20 years earlier with a bit of luck/extra effort.
temporaryi3 5y ago
It's more reasonable to expect them to make 35-45K pre taxes, 20-25k after taxes. With a COL of a working class person around 17.5-20k. Most people in software, or any tech field, are barely middle class let alone retiring aged 50.

nly 5y ago

Yes, I realise those two statements are in conflict. However, it's still possible for someone earning €200K to not be able to afford to give up €50K a year of gross income to reach the 25 year target I described. High tax, high CoL, a non-working partner and kids can level your chances. And some costs are just fixed for everyone, so there's a lower limit to consider The bottom line really is the balance between CoL and earnings rather than absolute earnings. To achieve a given fraction, R, of your career salary in retirement you need to give up a fraction, S, now. My claim is that most people won't be willing to give up S to achieve the R they feel they need for early retirement (at say 50). Personally I feel that unless you're 20-25 and have hit it out of the park with a great career starting salary you may as well forget about it and look to retire later... maybe start investing for your kids instead. Give them the 20 year headstart they can't give themselves. Investing for a decade or two longer is the magic sauce

franciscop 5y ago
Sure, and I know someone who got like 80k inheritance and he bought a jet ski and a car, crashed the car and sold the jet ski within a year. Not all developers can retire within 25, but what I'm trying to say is that a significant fraction of EU developers can, if they learn and are smart about their money, either retire very lavishly at the normal retirement age or retire 10-20 years earlier with a bit of luck/extra effort.

temporaryi3 5y ago

It's more reasonable to expect them to make 35-45K pre taxes, 20-25k after taxes. With a COL of a working class person around 17.5-20k. Most people in software, or any tech field, are barely middle class let alone retiring aged 50.