This transcript summarizes the financial and psychological shifts experienced by an American living and working in France since 2018, challenging five deeply ingrained American financial assumptions that do not hold true in the French system.
5 Financial Assumptions That Don’t Apply in France
The speaker, an American resident in Dijon, France, explains that the French social system fundamentally changes the financial landscape, leading to significantly reduced anxiety and financial pressure compared to the US.
1. You Need Millions to Retire Comfortably
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American Assumption: A comfortable retirement requires a multi-million dollar nest egg due to high fixed costs and the need to “self-insure” against catastrophic events.1
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French Reality: The required retirement savings are generally much lower because fixed costs are less burdensome. Housing and transportation are more reasonable, and essential safety nets are provided by the state.
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Healthcare: Medical expenses won’t wipe out savings (see point 2).
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Long-Term Care: While still a cost to plan for, the scale is different. The French health system (APA, or allocation personnalisée d’autonomie) helps cover dependency care, and medical care in retirement homes (EHPADs) is covered by the National Healthcare System, shielding families from total financial ruin.
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2. Healthcare Can Bankrupt You
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American Assumption: Healthcare is a primary source of financial anxiety, with serious illness potentially costing tens of thousands of dollars, and insurance often trapping people in unhappy jobs.
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French Reality: Healthcare will not bankrupt you.
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Access: Access to decent healthcare is guaranteed regardless of employment status.2
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Costs: Routine doctor’s visits cost about €25, most of which is reimbursed. Mutuals (supplemental insurance) are non-profit entities that reinvest surpluses.
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Emergencies: Ambulance rides and emergency procedures (like gallbladder removal) do not result in massive out-of-pocket costs. The fear of a medical emergency wiping out savings is eliminated, creating a significant mental burden lifted for the speaker.
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Note on Capital Income: Individuals living off substantial investment income without a French pension must pay a PUMA tax (a 9.2% charge on capital income above about €22,000/year) to cover their healthcare, making continued part-time employment a strategic choice for early retirees.
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3. You Must Own a Car for Freedom and Quality of Life
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American Assumption: A car is necessary for freedom and mobility, especially considering the lack of public transit. The average US car costs over $10,000 per year.3
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French Reality: Owning a car is often optional, especially in French cities like Dijon.
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Infrastructure: Cities are walkable, and public transportation is reliable.4 Bike lanes and car-sharing services are available.
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True Freedom: The speaker argues that not having to drive everywhere, be stuck in traffic, search for parking, or worry about expensive maintenance is the true definition of freedom.
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4. A High Income is the Only Path to a Good Quality of Life
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American Assumption: A comfortable life requires a six-figure salary to afford basics, housing, healthcare, and savings.
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French Reality: A good quality of life is accessible on a modest income (e.g., a teacher’s salary of around €1,800/month).
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Social Coverage: Because social systems cover the basics (healthcare, etc.), income can go toward living and enjoying life (culture, food quality, safety, work-life balance) rather than just surviving.
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Poverty: While poverty exists (8% below the poverty line vs. 17% in the US), France’s expansive social protection spending (31.2% of GDP vs. 18.6% in the US) provides a much greater safety net.
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5. You Have to Sacrifice Everything to Send Your Kids to College
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American Assumption: College requires years of saving, high debt for parents and students, and possible second mortgages. The average public university costs over $100,000 for a four-year degree.
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French Reality: Public universities charge only a couple hundred euros per year in enrollment fees for French and EU students.5 The burden on parents is significantly reduced, and the education quality is high. Financial stretch is limited to housing in another city or private school fees, not the tuition itself.
The speaker concludes that while the French system is not perfect and its long-term sustainability is a subject of debate, the financial realities and trade-offs are drastically different, offering a perspective that challenges core American financial beliefs.
Provient de : Économie éthique