Is FIRE only possible in the USA?

[FLOW]

In the USA salaries are high and due to the huge area youbcan find very cheap houses.
In my country it's the opposite, salaries are lower than the USA and because of a very small territory, housing is very expensive.
Average cost of a new house : 1 million dollars.
I wish I lived in the USA.
Then I could earn much more, subsequently save much more and buy a cheap house.

So move to the USA then.  Even on minimum wage, it's possible to get the money to move to the USA.  Work for a shipping company and jump ship when you land in the USA. 

[pmac]

4) here in Italy, there is no property tax on a primary place of residence (first home)
5) food and alcohol are a lot cheaper here than in the US
6) cheap travel on Ryanair and other budget airlines around Europe

There are probably more but I can't think of them right now.

Had no idea about #4 with Italy. That's awesome!

What about Italy income taxes, last time I checked, taxes on a $60,000/year salary are almost 50%.

[Paul der Krake]

In the USA salaries are high and due to the huge area youbcan find very cheap houses.
In my country it's the opposite, salaries are lower than the USA and because of a very small territory, housing is very expensive.
Average cost of a new house : 1 million dollars.
I wish I lived in the USA.
Then I could earn much more, subsequently save much more and buy a cheap house.

So move to the USA then.  Even on minimum wage, it's possible to get the money to move to the USA.  Work for a shipping company and jump ship when you land in the USA.

You know immigration laws are a thing right?

[Hula Hoop]

4) here in Italy, there is no property tax on a primary place of residence (first home)
5) food and alcohol are a lot cheaper here than in the US
6) cheap travel on Ryanair and other budget airlines around Europe

There are probably more but I can't think of them right now.

Had no idea about #4 with Italy. That's awesome!

What about Italy income taxes, last time I checked, taxes on a $60,000/year salary are almost 50%.

That's the catch.  Income taxes are crazy high and salaries are low.  But the lack of property tax on a first home is nice.

[six-car-habit]

Six, they pool their resources and make it work.  I find it sad.

 I agree , they are not living the "american dream".  I do find it fascinating, and commendable, that none of them are wasting money on a cell phone.
  It is good that they have the church congregation with the roof assistance. I am not a religious person, but man helping his neighbor is certainly one of the best tenents of the christian [ and other] religions.
  And probably this is a good arrangement, for the reitrees - not for space and comfort - but for having extended family right there with them.

[Cassie]

The daughter sleeps in the garage with a space heater and it gets cold here. Someone would be dead if I had to live in that small a space with that many people:))

[skip207]

On the flip side I am in the UK and our health care system is basically free if you are not working. 

On top of that if you have worked or collected benefits you get a state pension if you are over 67 of around $10k a year.  So a couple would get $20k.   And free health care.

Its much easier to FIRE, IMHO, if you know should things get screwed up your later years are looked after.

I wont quite have the full 35 years NI conts for my State Pension when I FIRE so will have to make some payments up but its good to know if I get to a FIRE failure situation that I have that extra income later in life. 

[thriftyc]

I am in Canada - FIRE is starting this year for me - and thats with 3 kids to support!  Universal health care is a big plus.

[flipboard]

On the flip side I am in the UK and our health care system is basically free if you are not working. 

On top of that if you have worked or collected benefits you get a state pension if you are over 67 of around $10k a year.  So a couple would get $20k.   And free health care.

Its much easier to FIRE, IMHO, if you know should things get screwed up your later years are looked after.

I wont quite have the full 35 years NI conts for my State Pension when I FIRE so will have to make some payments up but its good to know if I get to a FIRE failure situation that I have that extra income later in life.

These kinds of systems do indeed make it much easier to fire. Where I live, I'd get support payments if I were unable to work even before retirement age, which again reduces the risks of FIRE (compared to the US where you generally end up on the street and die if you run out of money and no one wants to hire you anymore). It might not be a luxurious life, but at least you have housing, healthcare, and food. Taxes here aren't any higher than the US, so you don't even need to have an expensive government just to provide for people - but I guess that's a country-by-country thing. (Most people do prefer to work, and there's a strong work ethic - if that changed, I imagine they'd have to cut down on the amount of supporting pauments, but that isn't threatening to be an issue anytime soon.)

I'm actually surprised that  so many people in the US are so bad at managing their money given the risks of running out of money there (homelessness, no healthcare, ending with death). But I can see how the societal factors make it more likely for sensible people in the US to want to be able to FIRE , since they're then protected against many of those risks unique to their country - compared to most other developed countries where you can generally expect to live with some basic standard of living even if you become unable to work (including becoming undesirable for employers). There's a lot less reason to FIRE when working hours are controlled (meaning you have guaranteed free time to use as you wish) and you can be sure of having your basic needs covered even without work.

[ctuser1]

On the flip side I am in the UK and our health care system is basically free if you are not working. 

On top of that if you have worked or collected benefits you get a state pension if you are over 67 of around $10k a year.  So a couple would get $20k.   And free health care.

Its much easier to FIRE, IMHO, if you know should things get screwed up your later years are looked after.

I wont quite have the full 35 years NI conts for my State Pension when I FIRE so will have to make some payments up but its good to know if I get to a FIRE failure situation that I have that extra income later in life.

These kinds of systems do indeed make it much easier to fire. Where I live, I'd get support payments if I were unable to work even before retirement age, which again reduces the risks of FIRE (compared to the US where you generally end up on the street and die if you run out of money and no one wants to hire you anymore). It might not be a luxurious life, but at least you have housing, healthcare, and food. Taxes here aren't any higher than the US, so you don't even need to have an expensive government just to provide for people - but I guess that's a country-by-country thing. (Most people do prefer to work, and there's a strong work ethic - if that changed, I imagine they'd have to cut down on the amount of supporting pauments, but that isn't threatening to be an issue anytime soon.)

I'm actually surprised that  so many people in the US are so bad at managing their money given the risks of running out of money there (homelessness, no healthcare, ending with death). But I can see how the societal factors make it more likely for sensible people in the US to want to be able to FIRE , since they're then protected against many of those risks unique to their country - compared to most other developed countries where you can generally expect to live with some basic standard of living even if you become unable to work (including becoming undesirable for employers). There's a lot less reason to FIRE when working hours are controlled (meaning you have guaranteed free time to use as you wish) and you can be sure of having your basic needs covered even without work.

You won't quite die even in the US if you are unable to work for some genuine reason(s) like disability etc.

I live in Connecticut. Out here, if you have no income and no assets:
1. you can get on SSI @ approx $700/month.
2. Medicaid (low income health insurance) would also become available. Obamacare on exchanges is also available for almost nothing after subsidy if you make < $18k or so. In some states, these insurances are really bad and no doctor/hospital wants to take it, e.g. NY State (from what I hear). CT is one of the good ones.
3. SNAP (i.e. food stamps) for a few hundred dollars (not sure of the exact amount, I think $300 or so).
4. Section 8 housing may be available, although waiting lists are long and even the waiting lists are closed most of the time.
5. There are many non-profits (some faith-based and some non-faith-based) that offer targeted help.

Government programs exist even in the US. The issue is the complexity of navigating the bureaucratic maze to access all of them. This complexity keeps many genuinely poor people out if they are not good at navigating this, while allowing some unscrupulous rich people to take advantage of the system.

[rob in cal]

  Basically any place where lots of people have a fair amount of disposable income seems to me like a good sign that theres lots of opportunity for FIRE. If people have so much disposable income that theres lots of leisure travel, lots of eating out a restaurants, lots of buying tickets to sporting events, movies etc, and at high prices that's got to tell you something about the opportunities out there to make money that could be used to save instead of use for fun stuff.

[Hula Hoop]

Government programs for those unable to work (or unable to find a job) are actually a lot more generous  in the US than they are in many parts of Europe like where I live here in Italy, although we had a very short stint (a few months only) of "universal basic income" after the populist 5 star party came to power recently.  This provided a few hundred euros a month to the unemployed but the program is now being ended after the most recent elections so hardly anyone was able to benefit from it for the few months that it existed.

We pay an enormous amount of income tax even on very low incomes here in Italy and we don't get much to show for it.  The infrastructure in the city where I live is terrible - parks full of garbage and grafitti, roads full of potholes, few bike lanes and the ones that exist are full of parked cars, and bad public transport compared to most European cities.  We have universal public health care which can work well but can also be very corrupt (this is not a criticism of universal single payer health care - just the reality of a place like Italy with corruption, the mafia etc.) Unemployment benefits are meagre and only last a short period of time (and there is huge unemployment here), there are no food stamp programs as there are in the US and the equivalent of Section 8 housing is almost impossible to get into.  Most unemployed, disabled or elderly people have to rely on their family to support them. Disability benefits are also much less than in the US.  The only really generous public program here is retirement benefits and that's where a huge portion of us working people's taxes go - however, due to the low birth rate and too generous retirement benefits us working age people are unlikely to get much in the way of retirement when it's our turn.

IMO the idea the US public benefits are meagre (except perhaps for healthcare) is a bit of a myth here in Europe.  Italian friends who have gone to live in the US are amazed at things like disability payments, food stamps, medicaid, medicare, public universities etc. 

[Paul der Krake]

IMO the idea the US public benefits are meagre (except perhaps for healthcare) is a bit of a myth here in Europe.  Italian friends who have gone to live in the US are amazed at things like disability payments, food stamps, medicaid, medicare, public universities etc.

Agreed. There is this belief that everybody is out to fend for themselves, because they are exposed to the worst excesses of the US system through the internet. For every dude who gets slapped with a 50k hospital bill there are thousands who get their Social Security check every month, but that doesn't make headlines.

[Cassie]

As a former social worker waiting lists for housing can be years long and they close them when it happens. SSI is difficult to get and many people only receive between 300-500/month. 

[FIREstache]

IMO the idea the US public benefits are meagre (except perhaps for healthcare) is a bit of a myth here in Europe.  Italian friends who have gone to live in the US are amazed at things like disability payments, food stamps, medicaid, medicare, public universities etc.

Not sure I would put Medicare on that list.  It's a separate tax that people pay into all of their careers, they don't qualify to receive it until age 65, and adequate coverage with Medicare parts/supplementals still ends up costing up to $500/mo per person, so $1000/mo for a couple.  My FIRE budget 10 years into the future skyrockets due to expected Medicare costs.

[FIREstache]

For every dude who gets slapped with a 50k hospital bill there are thousands who get their Social Security check every month, but that doesn't make headlines.

Not sure I would put Social Security on that list, either.  It's a separate tax that people pay into all of their careers, they don't qualify to receive the full SS benefit until age 67, it's not really sufficient to live off of, which is then taxed up to 85% (more so every year due to the tax thresholds not being indexed to inflation), and the net SS benefit usually decreases every year, not just due to higher taxes, but also due to increases in Medicare premiums taken from the SS check.

[Paul der Krake]

For every dude who gets slapped with a 50k hospital bill there are thousands who get their Social Security check every month, but that doesn't make headlines.

Not sure I would put Social Security on that list, either.  It's a separate tax that people pay into all of their careers, they don't qualify to receive the full SS benefit until age 67, it's not really sufficient to live off of, which is then taxed up to 85% (more so every year due to the tax thresholds not being indexed to inflation), and the net SS benefit usually decreases every year, not just due to higher taxes, but also due to increases in Medicare premiums taken from the SS check.

Hey you're describing every state pension system!

[Cassie]

Our biggest expense in old age is Medicare and out of pocket. Between 10-12 /year for 2.

[ctuser1]

Not sure I would put Social Security on that list, either.  It's a separate tax that people pay into all of their careers, they don't qualify to receive the full SS benefit until age 67, it's not really sufficient to live off of, which is then taxed up to 85% (more so every year due to the tax thresholds not being indexed to inflation), and the net SS benefit usually decreases every year, not just due to higher taxes, but also due to increases in Medicare premiums taken from the SS check.

Do you say this before you think Social Security is not a welfare system?

Social Security is a Welfare System! You don't have to take my word for it, just look up speeches by FDR supporting it, Hoover denouncing it, and Eisenhower reluctantly embracing it as a necessary compromise.

There are many arguments for or against it, but there was zero doubt in the minds of it's champions, detractors and reluctantly neutral actors during it's enactment that it IS and WILL be a welfare!! The current mythology, especially popular among people of a certain political ideology, that they "pay into" their social security is just that, a mythology!

You pay for the welfare of the current generation of recipients, with the hope that the next generation of taxpayers will extend the same courtesy to us!! We, millenials and Gen-Xers pay for the welfare of the Baby Boomers with the hope there will be sufficient workers behind us to pay for ours!!

Same is the case with medicare!!

I'd also question "it's not really sufficient to live off of".
I have a PIA of $3000+, assuming I continue working till 67 and earning what I do. DW does not have a long enough work history (10 years) to have a PIA. Her's should be a little less than mine, but she is also in the same field as mine and hence will also likely have a similar PIA as mine when she is of retirement age.

The fun thing is, even if I stop working at 50 or so (I am not sure I want to, but might) instead of working till 67, the PIA will only be impacted by $100 or $200.

The SS check is expected to decrease by 25% by the time we retire. This gives us $2250 for each of us, i.e. $4500/month total.

This would be quite sufficient for us!!

When retired, I fully expect to be able to live 100% on government welfare if we are in a crunch, e.g. we have a severe market downturn like 2008!!

[FIREstache]

For every dude who gets slapped with a 50k hospital bill there are thousands who get their Social Security check every month, but that doesn't make headlines.

Not sure I would put Social Security on that list, either.  It's a separate tax that people pay into all of their careers, they don't qualify to receive the full SS benefit until age 67, it's not really sufficient to live off of, which is then taxed up to 85% (more so every year due to the tax thresholds not being indexed to inflation), and the net SS benefit usually decreases every year, not just due to higher taxes, but also due to increases in Medicare premiums taken from the SS check.

Hey you're describing every state pension system!

Similar, but in my state, the payout starts for people retiring in their 50's and at a much higher ratio vs. what they paid in than SS.  So the pension is a much sweeter deal, and even though the pension system is bankrupting the state, they are raising taxes and fees so that pensions can still be paid at 100%.  Hopefully the same thing happens for SS recipients, that they will get 100%.

[FIREstache]

Not sure I would put Social Security on that list, either.  It's a separate tax that people pay into all of their careers, they don't qualify to receive the full SS benefit until age 67, it's not really sufficient to live off of, which is then taxed up to 85% (more so every year due to the tax thresholds not being indexed to inflation), and the net SS benefit usually decreases every year, not just due to higher taxes, but also due to increases in Medicare premiums taken from the SS check.

Do you say this before you think Social Security is not a welfare system?

Social Security is a Welfare System!

I get it, you came here to troll the forum.  You are not the first.  You used the word "before", as if I will someday I will think SS is a welfare system, but that is not the case, and I will never think such a ridiculous notion because I understand how it works.  You really should read this thread and learn something:
https://forum.mrmoneymustache.com/welcome-to-the-forum/social-security-will-not-be-bankrupt/

As I stated, you have to pay into SS during your career over 40 quarters to qualify for any payout.  If I could have put my and my employer's share of my SS taxes into the S&P 500 during my career, I would get a better payout at 67 than I'll get with SS.  So, SS is the opposite of welfare income.  I'm actually giving up income I would otherwise have had coming if I could have invested those dollars myself.  But due to the way SS works, everybody needs to keep contributing their FICA taxes, and they receive the SS benefit down the road.  Those who didn't contribute for 40 quarters will get nothing.  It's very different from welfare.  I think of it more like my investments - I invest for years and get a payout in the long run, although with SS, the payout is much less.

There most likely will NOT be a 25% cut to benefits.  I fully expect the SS tax cap to be removed and for FICA taxes to be increased as needed to prevent cuts to SS benefits for our struggling elderly who are having a hard time getting by as it is.

Your anecdotal feedback about your personal expected benefit if you work until age 67 is irrelevant in the grand scheme of things.  The average SS benefit is close to $1400/mo, and that's before expensive Medicare premiums are taken out.  Subtract state taxes and federal taxes (where applicable, more so in future years due to static tax thresholds), and that doesn't leave much to live on when rent alone is $1000+/mo.  And no. Medicare is not a free benefit to get adequate healthcare coverage.  Figure on spending close to $1000/mo, $12,000/yr for a couple for Medicare parts/supplement.  Welfare??  LOL  Hardly.

[ctuser1]

I get it, you came here to troll the forum.  You are not the first.  You used the word "before", as if I will someday I will think SS is a welfare system, but that is not the case, and I will never think such a ridiculous notion because I understand how it works.  You really should read this thread and learn something:
https://forum.mrmoneymustache.com/welcome-to-the-forum/social-security-will-not-be-bankrupt/

"before" was a typo, should have been "because".
It should read "Do you say this because you think Social Security is not a welfare system?"

As I stated, you have to pay into SS during your career over 40 quarters to qualify for any payout.  If I could have put my and my employer's share of my SS taxes into the S&P 500 during my career, I would get a better payout at 67 than I'll get with SS.

Apples and oranges!!
Compare it with an annuity if you must!! Cash flow guaranteed by the US government is an entirely different beast than S&P 500.
Sure, you would have a lot more if you put it in bitcoin in 2011 - but that is not relevant!!

So, SS is the opposite of welfare income.  I'm actually giving up income I would otherwise have had coming if I could have invested those dollars myself.  But due to the way SS works, everybody needs to keep contributing their FICA taxes, and they receive the SS benefit down the road.  Those who didn't contribute for 40 quarters will get nothing.  It's very different from welfare.  I think of it more like my investments - I invest for years and get a payout in the long run, although with SS, the payout is much less.

Everyone pays for their own social security??
Huh, who do you think paid for the first social security checks issued to Ms. Ida M. Fuller on 1940?
https://www.ssa.gov/history/idapayroll.html

Again, read up on history.  It was always intended to be a welfare, or "social insurance".

There most likely will NOT be a 25% cut to benefits.  I fully expect the SS tax cap to be removed and for FICA taxes to be increased as needed to prevent cuts to SS benefits for our struggling elderly who are having a hard time getting by as it is.

I hope so, but won't recommend anyone to plan on it.

Your anecdotal feedback about your personal expected benefit if you work until age 67 is irrelevant in the grand scheme of things.  The average SS benefit is close to $1400/mo, and that's before expensive Medicare premiums are taken out.  Subtract state taxes and federal taxes (where applicable, more so in future years due to static tax thresholds), and that doesn't leave much to live on when rent alone is $1000+/mo.  And no. Medicare is not a free benefit to get adequate healthcare coverage.  Figure on spending close to $1000/mo, $12,000/yr for a couple for Medicare parts/supplement.  Welfare??  LOL  Hardly.

I don't argue it is NOT incredibly hard to live just on welfare (which includes social security and medicare). I have, however, known people who have claimed to be doing so and had no reason to lie to me. (long story - I had some dealings with a community college, and it's students, including many seniors some time ago). It's hard, but seems possible. At some of asset + income threshold, all the state programs like medicaid, food stamps etc. kick in. Where I live (in CT), there is also an alphabet soup of government and non-government programs available targeted at (destitute) seniors.

Coming back to myself, and other typical users in this forum - I have a 401k and other savings, and expect never to qualify for any welfare except for straight up social security + medicare with it's rather high income based premium. However, I am grateful for the fact that they exist in case I do fall on hard times unexpectedly. So they do provide "insurance" value to me.

Why do you push back against the word "welfare" so much? Does it ruffle you in some way? Are you too good to use welfare someday, perhaps? Do you think welfare users, even the vast majority of genuine cases, are somehow inferior to you?

<edited to fix another typo + some clarification>

[ctuser1]

In the USA salaries are high and due to the huge area youbcan find very cheap houses.
In my country it's the opposite, salaries are lower than the USA and because of a very small territory, housing is very expensive.
Average cost of a new house : 1 million dollars.
I wish I lived in the USA.
Then I could earn much more, subsequently save much more and buy a cheap house.

Coming back to the topic - shouldn't FIRE should be easier where you have single payer healthcare?

Yes, salaries are high in the US. But you are only one health issue away from racking up millions in healthcare bills. I'd argue FIRE only became possible in the US due to Obamacare!! Even so, how useful and usable the Obamacare insurance is a scattershot and depends entirely on which state you live in. e.g. between NY and CT, people say NY plans are poor and unusable if you get into any serious health trouble (e.g. Sloan Kettering is not in network for any of the plans, and that is the place you want to go if you have cancer). People using the CT plans talk highly of it, as do the MA folks!! So you have to make sure you live in the right state in the US if you want to FIRE, and this too can change from one year to the next.

Some of the states with those cheap houses you speak of has absolutely horrible Obamacare plans (I don't know by experience, repeating what I have heard with no data).