From great food, to beautiful scenery, to a good healthcare system with affordable cost of living, France is a fantastic country for early retirement. Beyond the straightforward reasons, it is critical to understand the system underneath the nice picture.
This post is part of a series about France:
- Part 1: Ultimate Reasons to consider early retirement in France
- Part 2: Best FIRE places in France
- Part 3: How to successfully settle for FIRE in France?
- Part 4: How to secure the perfect rental property in France?
France is a beautiful and lovely country with lots of appeal. However, it can remain challenging to navigate the daily life routine (especially in the countryside) if you don’t master the language of Rousseau.
All else equal, most people would prefer a place where the weather is nice. In our search, we have drawn a horizontal line across France and looked only at cities south of the midline. Sorry Paris.
In 2020, we went on a journey to visit cities and schools clockwise from Annecy, to Aix-en-Provence, to Nice, to Montpellier, to Toulouse and up to Bordeaux. Across all those cities we visited the city centers, major landmarks, and international schools. We also tried to project ourselves in the environment with one question in mind: Would we be happy living here?
Why France can be a good destination?
This is a very difficult question to answer. I perceive most things as Ying and Yang. What may be a positive characteristic for one, might be a negative one for someone else. I tend to take all recommendation like “Best place to retire…” with a grain of salt. Everyone wants to get a quick answer before doing proper homework (or due diligence in a professional setting). Our approach is to first share with you what the overall system of the country is, from education, to healthcare, to property market and to taxes, and then to look at more local perspectives of each city. It will then be up to you to decide which package is more appealing to you and your family. So, let’s first dive into the macro of France!
The French systems
I know that dealing with systems sounds scary, but here we are as we walk our FireCrackers’Journey. We encourage you to understand the system in which you operate, so that you can Crack your way through FIRE. So please, bear with me a little and see if France would be a fit for you.
The education system in France
I am still not sure how France ranks #2 in the number of Fields medals (the Nobel prize recognition for Mathematics). Education might have played a crucial role though likely it is more on a higher education level.
Nevertheless, public education is free and mandatory from 3 years old until 16 years old. You usually start by registering at the city hall, which will assign you a school based on the location of your home. Good schools tend to be in good/wealthy neighbourhoods and large cities. The range of subjects taught in school is broad. However, the study of foreign languages starts too late in my opinion. Indeed, you start learning English or another foreign language when you reach “collège” (roughly 11 years old).
Learning a language seems so natural for young kids, and so difficult for teens or adults. Therefore, our family preference is to start earlier. This means your only option is to enrol your children in a private institution. International private schools are not ubiquitous in France, but you usually find them in mid-to-large size cities. You may find some bilingual school in Biarritz or Nantes, but read the fine prints. They are bilingual with the local language “Basque” and “Breton”.
For most international private schools we examined, the average yearly cost ranges from €5,000 to €9,000 per child. There are always some outliers where costs can reach €40,000! But you can still get a very good education for the bracket I just provided. According to French standards, it is a significant amount of money because les français are so used to having all sort of government services provided free of charge. However, if you are coming from other countries where private education carries a huge price tag, you may understand why it could still be a great deal.
The healthcare system in France
People who complain about the healthcare system in France never experienced healthcare overseas. It is true that you might have to wait some time to get an appointment with a specialist doctor, but you will jump the queue in time of an emergency. General Practitioners are numerous, and it is very easy to get an appointment. Covid accelerated the digital transformation in healthcare too. Home-grown platforms such as Doctolib has revolutionized this space. It is THE platform to find your doctor, set up your medical appointment (face to face, or via video), and get your prescriptions. The mere fact such platform is available is absolutely fantastic.
Healthcare is provided almost free of charge to residents. And I mean residents, not only citizens. If you live and work, you can access the healthcare services for a minimal fee (a few Euros for a GP). You can always self-insure yourself and pay out-of-pocket for your healthcare needs. As the government is the biggest sponsor of French health, it negotiates prices of most doctor appointments and prescribed drugs. This is one of the main contributor in keeping prices in check. And if you decide to be treated at a private hospital or “clinique”, prices have no limit, and then, you might literally experience a heart attack when presented with the bill.
I still recall my first few weeks when I returned to France when I was going to see the doctor. The doctor would ask me for the Carte Vitale, before paying ~€22 for a consultation. Don’t worry it will be automatically reimbursed by the “Securite Sociale” in a few weeks minus €1 or €2 as a contribution. I was more surprised to not have to pay for most of the drugs when I was going to the pharmacy. With two then three young kids, we were grateful our regular trips to the GP and the pharmacy would not cost us too much.
If you are looking for an extra coverage, you can always sign-up for a “mutuelle”. It is usually provided by your employer if you are part of a large organization. Else, you can top it up yourself. We paid ~€130 per month for a family of 5 for such mutuelle. There is some co-payment, but you can easily compare the offer / coverage of medical insurances because they must follow a template. Kudos to such official guidelines which let consumers compare various options effortlessly.
The property market in France
Real Estate is relatively affordable in France. However, the bigger issue is that supply is rather limited. One major reason is the pro-tenant laws in place which overly protect tenants’ rights, causing landlords to worry about their own as bad tenants can easily abuse the system. It might take months or even years to expel a tenant who fails to pay rent. And even if you have the right to expel, you cannot do it during the winter season. This is totally absurd in my opinion. While the government is planning to implement changes which give more rights to the rightful owners, these are the rules of the game as of now. The consequence is that many landlords are overly cautious in choosing their tenants to avoid encountering a bad one.
If you are a foreigner coming to France without stable job, good luck in finding a place to rent. Landlords prefer people with a CDI (“Contrat à Durée Indéterminée”) because the person has a job, a steady income and will still be able to collect unemployment benefits in case the person lose his job. If you are FIRE without a job, landlords or agents would look at you suspiciously. How can you pay the rent if you don’t have an income? The fact that you had savings just wouldn’t hit home. For us, we just went with the story that was making the landlord more at ease. Yes, we have a job, we are self-employed, and here are our incomes…
If the search isn’t fruitful, you might need the help of a garant, who agree to become responsible for your rental payments if you miss your obligations. The person is usually a parent or a friend, basically who is willing to take up this BIG responsibility legally. As renting in France is notoriously difficult, insurance-like companies have entered into this area lately, which allow to-be-tenants to buy their very own rental non-payment insurance with beneficiary being the landlord. One such companies is Garantme. They assess your income and also your assets, and charge you roughly 3.5% p.a. for an insurance covering of your rental non-payments. The insurance does not come cheap, but it is still better to pay for a solution, then to have no home at all. You will find more details on this in the last post of the series: How to settle in France?
The tax system in France
There is no free lunch. All the great services provided mostly for free, such as education and healthcare, need to be paid for one way or another. This is what taxes are for. I do not hate taxes per se if they are well designed. But I dislike wastage, and politicians who take the shortcut to increase taxes rather than fixing the issues at stake.
To put is simply, everything is taxed in France, from the moment you earn money from your job (income tax) or from your investments (capital gain tax, dividend tax, interest tax), to when you pay for services (VAT tax), to when you live in a place (“taxe habitation” is fading progressively), to when you own a home (“taxe fonciere”), to when you own lots of assets (wealth tax), to when you leave the country (Exit tax), to when you give (gift tax) till you die (inheritance tax). I would really recommend you find a great tax advisor or accountant, or even better to conduct your own due diligence with regard to tax. In my opinion, French tax code is as convoluted and complicated as it can get.
Although there are many taxes, there are also many tools to minimize your tax burden. You can rent to avoid property tax (but in an efficient market, you would pay it indirectly). You can use a tax advantageous scheme such as PEA to avoid dividend tax and decrease capital gain tax. Accumulating ETFs enables reinvestment of your dividends tax-free. You can also use an Assurance Vie to benefit from lower capital gain taxes and to transfer tax-free up to ~€150K per person when you pass away. Gifts are tax-exempt every 15 years with a cap allowance depending on your relationship to the person who receives the gift…
As a conclusion, there are many taxes and also many ways to reduce them. So, you should engineer your finances before coming to France if you want to avoid unpleasant surprises. In a future post, we will review different ways to optimize your taxes, so subscribe to receive notification of all our upcoming posts!
The Cost of Living in France
It really depends on where you live and your lifestyle. You shouldn’t be surprised that life will be more expensive in the mega cities like Paris and Nice, and much lower in smaller cities and towns. At least, France has the full spectrum of choices from very affordable to ultra-luxurious. You should be able to find a home and a lifestyle that matches your budget. While in most countries, you pay a lot for private education and healthcare, in France your children can learn French for free in a public school, and your family can enjoy a decent and affordable healthcare. All these can be done without compromising (too much) on your lifestyle.
In the next post of the series “Best FIRE places in France”, we will review several cities in more details.
What are your reasons to consider France? Now that you are here, have your reasons evolved? Please share your experience (positive and negative) to help build a full picture for our community. Happy Fire Cracking!
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