Retire in 2022 - maybe in France

[MikeyInMarin]

Not early retirement, I will be 64 then. I wish I had found this community 20 years ago. It has been the most useful forum I’ve ever found!

I’ve run the various retirement calculators (Fidelity, firecalc, Vanguard), so I don’t need help with that decision. I am single. I will get a $1100/month small pension at 65. I plan to take SS ($4k/month) at 70. So my $1M investments (mostly 401k & rollover and $160k Roth) would draw down until SS. I also have $100k+ in cash.

My income requirement varies depending upon where I live.

I have a paid-for home in San Rafael that I plan to keep. Even if I don’t move to France, I am restless to leave this area. But I don’t want to give up my property tax basis in case I want to come back to California. I plan to rent for a while before considering buying anything elsewhere. And, while I’m not looking forward to being a landlord, I will need the income from renting my home.

I fell in love with France the first time I went - back in 97. I have visited France and Europe many times since then. I quit my job in late 99 to tour Europe and maybe look for a job (in London, Ireland or Amsterdam). I got a couple offers at that time, but nothing that gelled. So back to California.

I speak a bit of “tourist” French but nowhere near well enough to live there. I am now taking regular and conversational classes at Alliance Francaise.

I had dreamt of living there, but thought the financial issues made it impossible (e.g., French taxes on my US retirement savings) - until I saw this thread last year:
https://www.early-retirement.org/forums/f46/retiring-abroad-109921-4.html

I was very pleasantly surprised to see that W (Bush 43) and Sarkozy signed a tax treaty that solved my problem. That thread changed my life.

That thread answered many questions, but of course brought up more things I need to figure out:

• How to establish a virtual presence in the US.
• Issues around applying for the long term visa.
• I see information (in the immigration website) that Long term residents are eligible for PUMA, but other info says I need international health insurance. I am confused.
• How to handle filing US and French taxes.

I assume that I should post those questions on “post FIRE” forum.

 

[timo007]

Hi MikeyInMarin,

We are also going to retire in France, but have French passports as well, so unfortunately I cannot help you on the immigration questions.

French taxes are usually very simple, with everything filled out and an online website to complete the necessary. There is no Turbotax in France as it is not needed.

Where in France are you planning to live as the country is big and prices vary widely from one part to the other; but generally retirement can be cheaper in France.

You will definitely need to learn French to manage day to day life and the French administrative processes.

Feel free to PM me if there are any specific questions I can help with.

Cheers,

Timo007

 

[Physics Guy]

I'll be following this with interest. France is an interesting retirement destination. As you indicate there is a lot less clear information available (at least in English).

 

[timo007]

I'll be following this with interest. France is an interesting retirement destination. As you indicate there is a lot less clear information available (at least in English).

There is a very large community of Americans who have retired in France. I wish I could help more on the information, but being French it is a bit different in my circumstances. If there is something I can help with more generally, don't hesitate.

Cheers,

Timo007

 

[Physics Guy]

Thank you for the offer of information.

Mostly my interest is theoretical right now. At one point I had seriously considered retiring to a short list of European countries (Portugal, Spain, France mostly) but as I actually reach my summer 2022 retirement date I have to admit that it is unlikely to ever happen. Aging parents and disrupted travel due to Covid make an immediate international move less likely.

 

[Bamaman]

You might want to delve deeper into the Schengen Agreement and how difficult it is to get a Visa to live in France. One of my best friends in Paris had difficulties, but he had a company paid attorney handle it. He couldn't rent an apartment without documentation. And he ended up in Lugano.

We travel to Europe usually 2x per year and have returned to France in recent years. There are just other countries that suit our lifestyle better. I was surprised that the cost of living in Spain was so reasonable, for example. Our niece (living outside London) had a modern condo in the Algarve west of Faro, Portugal, and it's a very nice place to live.

 

[Alex The Great]

[*]How to establish a virtual presence in the US.

There is a topic about virtual mailbox in US:
https://www.early-retirement.org/forums/f28/virtual-mail-box-for-expats-112540.html

 

[MikeyInMarin]

Timo, I forgot to say where I want to retire: Nice.

Why there:
The weather (most like where I spent most of my life in coastal California)
Well connected transportation hub (airport and TGV)
Largish city where I can live car free
Fairly reasonable cost of housing

Re taxes, my retirement income would be generated and taxed in the US, I understand that residents have to file French tax returns.

I forgot to mention that I also need to clarify how the French wealth tax would treat my home in the US.

 

[qwerty3656]

I worked with a guy who joked if our stock did well, he was going to retire to the south of France (the company actually went bankrupt a few years later). Based on his comments, I was always under the impression that retiring to France was very expensive.

 

[Irishgirlyc58]

Not early retirement, I will be 64 then. I wish I had found this community 20 years ago. It has been the most useful forum I’ve ever found!

I’ve run the various retirement calculators (Fidelity, firecalc, Vanguard), so I don’t need help with that decision. I am single. I will get a $1100/month small pension at 65. I plan to take SS ($4k/month) at 70. So my $1M investments (mostly 401k & rollover and $160k Roth) would draw down until SS. I also have $100k+ in cash.

My income requirement varies depending upon where I live.

I have a paid-for home in San Rafael that I plan to keep. Even if I don’t move to France, I am restless to leave this area. But I don’t want to give up my property tax basis in case I want to come back to California. I plan to rent for a while before considering buying anything elsewhere. And, while I’m not looking forward to being a landlord, I will need the income from renting my home.

I fell in love with France the first time I went - back in 97. I have visited France and Europe many times since then. I quit my job in late 99 to tour Europe and maybe look for a job (in London, Ireland or Amsterdam). I got a couple offers at that time, but nothing that gelled. So back to California.

I speak a bit of “tourist” French but nowhere near well enough to live there. I am now taking regular and conversational classes at Alliance Francaise.

I had dreamt of living there, but thought the financial issues made it impossible (e.g., French taxes on my US retirement savings) - until I saw this thread last year:
https://www.early-retirement.org/forums/f46/retiring-abroad-109921-4.html

I was very pleasantly surprised to see that W (Bush 43) and Sarkozy signed a tax treaty that solved my problem. That thread changed my life.

That thread answered many questions, but of course brought up more things I need to figure out:

• How to establish a virtual presence in the US.
• Issues around applying for the long term visa.
• I see information (in the immigration website) that Long term residents are eligible for PUMA, but other info says I need international health insurance. I am confused.
• How to handle filing US and French taxes.

I assume that I should post those questions on “post FIRE” forum.

Do you retain the prop 13 property tax protection if it is no longer your residence but is a rental?

 

[Jim59]

Not to be negative, but I am sure you can only stay in France, or any EU country for 90 days max in any 180 days. (Schengen Agreement). The ability to get a passport of an EU country will render the foregoing not applicable.

It has scuppered my plan to either move to Portugal or tour for greater than 3 months in a Campervan. I’m looking at possibilities of an Irish passport.

 

[Out-to-Lunch]

Portuguese Golden Visa?

 

[marko]

We lived in France (Paris) for many years. As non-legal residents it was extremely difficult to get a bank account or even a land-line phone. This was 20 years ago so things may have changed. There is also a form required to show that you are not going to be taking a job from a French national.

We were fortunate that my company was able to pay our rent for us (IIRC we couldn't rent the place on our own), supply us with phones and a petty cash checking account. In essence, while we lived there for a long time, we were 'visitors' who had to leave the country every 90 (or 180...I forget) days. That was not a problem because we got back to the US regularly.

We were able to withdraw all the cash we needed from an ATM from our US bank account however.

Mostly at the ground level, the whole regulations/visa/legal thing can be a minor PITA but well worth it! I would just avoid trying to gain citizenship as the French paper mill can be daunting.

 

[Lagniappe]

Not to be negative, but I am sure you can only stay in France, or any EU country for 90 days max in any 180 days. (Schengen Agreement). The ability to get a passport of an EU country will render the foregoing not applicable.

It has scuppered my plan to either move to Portugal or tour for greater than 3 months in a Campervan. I’m looking at possibilities of an Irish passport.

Jim,

You can live in Portugal with any number of visas. Most retirees choose a D-7 visa, which only requires that you can support yourself (and a lot of paperwork). The support requirements are less than $1000 per month.

The Golden Visa (Residency by Investment) is another option, but more expensive and bureaucratic.

 

[Jim59]

Jim,

You can live in Portugal with any number of visas. Most retirees choose a D-7 visa, which only requires that you can support yourself (and a lot of paperwork). The support requirements are less than $1000 per month.

The Golden Visa (Residency by Investment) is another option, but more expensive and bureaucratic.

Yes, I can see short stay or temporary visa requirements. Now that a Campervan seems to be the choice, we are less likely to want to retire there.

 

[timo007]

I forgot to mention that I also need to clarify how the French wealth tax would treat my home in the US.

The French Wealth Tax now only applies to real estate holdings. So it should not be a major issue unless you have more than $1 million euros of real estate.

 

[martyp]

I am 66 and also retired overseas from the Bay Area, El Cerrito -> Bangkok in 2017. I keep a US address with my sister in Pleasant Hill. I would think you could maintain an address through your rental property? If not then do it through family or friends. At this point I don’t get much actual mail.

I have an ATT US phone number that is the second number on my phone. I got the lowest cost plan but the monthly fee is just part of the cost of moving abroad. I have not tried a virtual address yet but if you do research it carefully with all your financial institutions.

Make sure you CA drivers license and passport have the maximum expiration date you can get. It is one less thing to worry about. You shouldn’t need an international drivers license but it doesn’t hurt to get it (I don’t have one).

Research the cost and process of transferring money from the US to France with each of your financial institutions.

I am sure you have already researched immigration requirements and moving issues.

 

[oiseux]

Hi there, congratulations on your pending retirement.

We are not yet retired yet (stuck in OMY) but live in NorCal and bought in Nice in advance (we go three or four times per year already, except in 2020). We also take french classes and are members of AF. There is a lively and active expat community. The costs in Nice are less than Northern California. Feel free to ask any more specific questions.

To answer your questions:

France has a non-active visa for long term stays. You can get a renewable 12 month visa with proof of sufficient income (you have it), a medical exam, 3 months of health insurance, and a lease or title on a residence. You just have to attest you will not seek work. Bridge insurance needs to meet certain requirements and some younger folks just get the minimum. You initially apply while in the US, and everything can be handled via the SF consolate.

Yes, the tax treaty has been modified and is more advantageous than the other EU countries, for Americans. France basically waves all US sourced pensions and equivalents (including SS, 401K, IRA, Roth), interest, dividends, etc Most people will not pay more than what they pay in US tax, as long a they don't have french-sourced income or certain equivalents, or real estate-based CG. The biggest gotcha is the inheritance tax and procedures. Here is a link to the French version of the tax treaty, a consolidated version with all the amendments and technical protocols included: LINK

No special immigration or tax schemes are necessary.

You become eligible for PUMA after 3 months, but getting coverage can be delayed. Originally, those receiving a pension were exempt from charges for this. This was changed to be "conforming pensions" so many are prepared for some level of charges (CSM) based on the current structure on passive income (6.5% over 20.4KE per person; SS, 401K, pensions, etc are excluded but net rental income is not).

Wealth tax kicks in on real estate worldwide valued at 1.3M E and above (but reaches back to 800KE). There is a five year exclusion period. There is also an exclusion amount on the primary residence and for qualifying people, on rental property. The rate however is comparable to a property tax (caps out at 1.5%), and actual property taxes are pretty low.

ETA: We have an accountant in the US and one in France (because we rent our apartment when we are not there). Everything is handled via softcopy online. The French portion can also be done for free with help from official bureaucrats (by appointment) and is filed in an online system.

 

[Optionality]

Interesting choice, I decided to go the other direction (EU citizen planning to retire in the US), due to the wealth tax in my country of origin.



I'll throw a small tip out there: you are going to have to convert dollars to euros. If you do this via a US bank, you will get ripped off hugely. The cheapest I have found is Interactive Brokers, which is a broker that caters to professional traders. They allow you to trade currencies on the international spot market, at basically inter-bank rates. Buying $400 K for our US house cost less than a McDonalds meal in fees .


There is one more gotcha: having a mortgage on French real estate in euros can generate annoying tax problems.


Maybe one final warning is that the quality of EU health care is a bit lower than that of US health care.

 

[timo007]

Interesting choice, I decided to go the other direction (EU citizen planning to retire in the US), due to the wealth tax in my country of origin.



I'll throw a small tip out there: you are going to have to convert dollars to euros. If you do this via a US bank, you will get ripped off hugely. The cheapest I have found is Interactive Brokers, which is a broker that caters to professional traders. They allow you to trade currencies on the international spot market, at basically inter-bank rates. Buying $400 K for our US house cost less than a McDonalds meal in fees .


There is one more gotcha: having a mortgage on French real estate in euros can generate annoying tax problems.


Maybe one final warning is that the quality of EU health care is a bit lower than that of US health care.

Thanks for the tip on the conversion. I used Fidelity when I moved Euros to Dollars at 0.3%; it was better than wise or others; but not as good as inter-active brokers.

I disagree on the health care aspect, at least compared to France. In France, the primary care doctors and specialists are great and it is easy to get an appointment. In Houston, it can take 3-4 months to get an appointment with a specialist. In Houston, you need to worry about who is in-network and what is cover and not covered; versus France which is much simpler to understand. The hospitals in France are not as fancy and don't have the same comforts as the United States, but I have always found French health care to be world-class.

The wealth tax over 1.3 million euros in real estate can be challenging for some; but the cost of living in France I find to be much lower (Restaurants, Mobile Phone Plans, Fruits & Vegetables, property tax, etc.).

Salaries are much lower in France than the United States; so that plays a part into why the cost of living is lower. An engineer in France might make half of an engineer in the United States; but with more vacation and a better pension in France than the United States.

Having lived in both countries for nearly a decade, I am happy to provide any advice I can via this thread or via PM.

Cheers,

Timo

 

[Letj]

The French Wealth Tax now only applies to real estate holdings. So it should not be a major issue unless you have more than $1 million euros of real estate.

Is that just for residential real estate or does that include investment real estate as well?

 

[oiseux]

Is that just for residential real estate or does that include investment real estate as well?

It includes all types of real estate, including land and shares/companies/other financial instruments focused on real estate. There are exemptions for property held for commercial activity (i.e, you are a doctor and it is your sole practice) but not unfurnished rentals (and furnished rentals where it is not deemed a qualifying, registered professional activity). There are reductions in place for primary residences and unfurnished rentals. And there is a cap as well, and certain structures that still benefit from exemptions.



Link: Official French Explanation and continuing here
Link: High Level Overview in English from Notaires site

 

[Letj]

Thanks for the info and link. France was on my radar but since a good chunk of my assets are in real estate, it’s definitely something to think about.

 

[Optionality]

In addition to the "general" French tax, you should probably check the US/French tax treaty, as it might be that the real estate (I assume it is in the US?) is only taxed in the US. I have no idea if this applies here, but we used US real estate to "optimize" the Dutch wealth tax, the US real estate was exempt.

 

[timo007]

Hi All,

I did not check US Real Estate; but I now EU Real Estate and REIT type investments are subject to the French wealth tax on real estate (IFI).

It only applies to real estate above 1.3 million euros and you can deduct ~30% of your primary residence. Don't quote me on the 30%; but this was I believe the amount last I checked.

Cheers,

Timo