Go Back   English Forum Switzerland > Living in Switzerland > Business & entrepreneur
Reply
 
Thread Tools Display Modes
  #1  
Old 07.05.2015, 14:37
Junior Member
 
Join Date: Sep 2009
Location: Zurich
Posts: 72
Groaned at 0 Times in 0 Posts
Thanked 48 Times in 22 Posts
KayZoubi is considered knowledgeableKayZoubi is considered knowledgeableKayZoubi is considered knowledgeable
2nd and 3rd pillar in Switzerland versus buying property

While this is a very personal question and it depends on many different factors, here`s a question for any experts here on this topic :

What`s the best way to save your extra two cents in Switzerland if your planning to retire in Switzerland?

1) Top up your second pillar gap to the max? and always save the max amount on your third pillar?
2) Buy property ?
3) Buy gold bars
4) do a bit of all?
5) others ?

I would like to ask mid-age professionals working in Switzerland whats the best plan to save for the elderly days in this forever demanding society
Reply With Quote
  #2  
Old 07.05.2015, 14:48
newtoswitz's Avatar
Forum Veteran
 
Join Date: Jan 2010
Location: Rapperswil
Posts: 1,158
Groaned at 15 Times in 13 Posts
Thanked 1,310 Times in 596 Posts
newtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond repute
Re: 2nd and 3rd pillar in Switzerland versus buying property

My 2p...

1) Pillar 3a always makes sense for the tax advantages; Pillar 2 is a hard one, it's tax efficient but the returns suck - personally I'm not topping up my Pillar 2 for this reason.

2) To live in and save rent - almost certainly yes, at least with mortgage rates as they are now; to invest - could go either way, the property market is definitely over-inflated but looks likely to avoid a crash, but not my idea of a secure retirement investment.

3) No, you get no income and the price is all over the place; unless the vote to make the SNB buy a load goes through , in which case they could jump.

4) Yes, always spread your long-term bets no matter what you do.

5) Normal investments - stocks, bonds etc - normally called "Pillar 3" for some strange reason as it has nothing whatsoever with pensions!
Reply With Quote
The following 2 users would like to thank newtoswitz for this useful post:
  #3  
Old 07.05.2015, 14:55
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 13,782
Groaned at 209 Times in 181 Posts
Thanked 11,095 Times in 6,294 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: 2nd and 3rd pillar in Switzerland versus buying property

Quote:
View Post
While this is a very personal question and it depends on many different factors, here`s a question for any experts here on this topic :

What`s the best way to save your extra two cents in Switzerland if your planning to retire in Switzerland?

1) Top up your second pillar gap to the max? and always save the max amount on your third pillar?
2) Buy property ?
3) Buy gold bars
4) do a bit of all?
5) others ?

I would like to ask mid-age professionals working in Switzerland whats the best plan to save for the elderly days in this forever demanding society
Equities, if you want to retire early, there is no CGT in CH. I managed to retire at 52, I wish I had paid less into pensions which I can't even touch yet.

Pension funds are tax deferred & you pay tax on gains in the fund size have restrictions so I think on balance they are a bad deal.

A relatively low risk equity fund which I invest in is www.fundsmith.co.uk, been recommending it on the forum for 2.5 years. You can invest in Euro , or , if your very rich in CHF as well.
Reply With Quote
The following 6 users would like to thank fatmanfilms for this useful post:
  #4  
Old 07.05.2015, 18:52
Forum Legend
 
Join Date: Sep 2006
Location: SZ
Posts: 7,620
Groaned at 18 Times in 17 Posts
Thanked 15,927 Times in 5,234 Posts
meloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond repute
Re: 2nd and 3rd pillar in Switzerland versus buying property

Kay, your profile lists the US as one of your nationalities. As you consider your options do make sure you understand your US tax liability with Pillars 2 and 3.
Reply With Quote
The following 2 users would like to thank meloncollie for this useful post:
  #5  
Old 07.05.2015, 20:18
Medea Fleecestealer's Avatar
Forum Legend
 
Join Date: Jul 2011
Location: Misery-Courtion
Posts: 13,555
Groaned at 171 Times in 135 Posts
Thanked 9,676 Times in 5,522 Posts
Medea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond repute
Re: 2nd and 3rd pillar in Switzerland versus buying property

Note also that, as an American citizen, you're unlikely to be able to get either an investment or mortgage account here. Basic salary accounts are generally all that are available these days unless you're independently wealthy to start with.

I assume too that possibly any investments and certainly mortgage would need to be considered on the US tax side as well. Not sure what is exemptable, but start your research here:

http://www.irs.gov/Individuals/Inter...-Aliens-Abroad
Reply With Quote
  #6  
Old 18.05.2015, 19:07
Newbie
 
Join Date: May 2015
Location: Lausanne
Posts: 3
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
FinancialAdvisorCH has no particular reputation at present
Re: 2nd and 3rd pillar in Switzerland versus buying property

Hello, I am a Financial advisor in Switzerland and for the experience I have with many expats as well as with Swiss people and here's what I would say (I apologize already for my poor english):

1) Top up your second pillar gap to the max? and always save the max amount on your third pillar?

It depends on your age, if you are already at the maximum with your 3rd pillar and you do not have any other ways of lowering taxes (because you're an employee and not a freelance) the 2nd pillar is an excellent way of saving taxes. I am sorry but people that say that it's a poor investment I think they're wrong, because you might not have a 5% yield but, according to your "taux marginal d'imposition" (last taxation rate...?) that is linked to your income, you can have a ~30% "yield"/year!

Again, it is to use with caution, it depends on your age, your plans/goals and your pension statement and health. Nevertheless it's a great way to save from taxes.

2) Buy property ?

More than tax efficient, this can lower considerably your renting costs without having a huge impact on your Income taxes (the most expensive one). Now to do it you must consider the "Swiss system" for buying a property where the aim, to be tax-efficient is basically not reducing your debt. Too long to explain here, but that's the "key" switch that you have to turn on, compared to worldwide standard models.

3) Buy gold bars

Again, people who say it's a bad investment, they're wrong... is people who usually buy equities when everybody is buying and sell them when there's a bearish market to go buy some gold when its price is at the top...

For exemple, today bonds are much more dangerous in the mid term than gold...

The importance is not to put everything in to gold... but to have a good diversification.

4) do a bit of all?

This is the greatest point. DIVERSIFY your investments, do some equities, some bonds, some gold, some property, some 3rd pillar, etc.

Now, according to what your situation is and what's your short, mid and long term going to look like (plans, milestones...), things have to be wisely distributed and studied.

Of course, all of this can be discussed, not everything has to be taken exactly as I put it because every situation is different as every experience is (good/bad experiences with stocks, good/bad experiences with property, etc.)!

If you wish to have more information on a subject, please feel free to contact me... and above all, be careful with general advices because not everything suits every situation and be careful with insurers...
Reply With Quote
  #7  
Old 18.05.2015, 20:40
Phil_MCR's Avatar
Forum Legend
 
Join Date: Oct 2009
Location: Basel
Posts: 11,485
Groaned at 246 Times in 157 Posts
Thanked 13,338 Times in 5,682 Posts
Phil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond repute
Re: 2nd and 3rd pillar in Switzerland versus buying property

best is to earn a lot of money and then save most of it. start a business, sell it for millions/billions.

on the cost side, the main ones are: tax, housing, car, food, healthcare.

strangely, things nothing to do with retirement might yield the best 'return' e.g. doing sports, getting married etc.
Reply With Quote
  #8  
Old 18.05.2015, 20:56
Newbie
 
Join Date: May 2015
Location: Lausanne
Posts: 3
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
FinancialAdvisorCH has no particular reputation at present
Re: 2nd and 3rd pillar in Switzerland versus buying property

If you are a US-citizen in CH, it's sadly the only thing you can do! :-)
Reply With Quote
  #9  
Old 18.05.2015, 22:07
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 13,782
Groaned at 209 Times in 181 Posts
Thanked 11,095 Times in 6,294 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: 2nd and 3rd pillar in Switzerland versus buying property

Quote:
View Post
Hello, I am a Financial advisor in Switzerland and for the experience I have with many expats as well as with Swiss people and here's what I would say (I apologize already for my poor english):



1) Top up your second pillar gap to the max? and always save the max amount on your third pillar?



It depends on your age, if you are already at the maximum with your 3rd pillar and you do not have any other ways of lowering taxes (because you're an employee and not a freelance) the 2nd pillar is an excellent way of saving taxes. I am sorry but people that say that it's a poor investment I think they're wrong, because you might not have a 5% yield but, according to your "taux marginal d'imposition" (last taxation rate...?) that is linked to your income, you can have a ~30% "yield"/year!



Again, it is to use with caution, it depends on your age, your plans/goals and your pension statement and health. Nevertheless it's a great way to save from taxes.



2) Buy property ?



More than tax efficient, this can lower considerably your renting costs without having a huge impact on your Income taxes (the most expensive one). Now to do it you must consider the "Swiss system" for buying a property where the aim, to be tax-efficient is basically not reducing your debt. Too long to explain here, but that's the "key" switch that you have to turn on, compared to worldwide standard models.



3) Buy gold bars



Again, people who say it's a bad investment, they're wrong... is people who usually buy equities when everybody is buying and sell them when there's a bearish market to go buy some gold when its price is at the top...



For exemple, today bonds are much more dangerous in the mid term than gold...



The importance is not to put everything in to gold... but to have a good diversification.



4) do a bit of all?



This is the greatest point. DIVERSIFY your investments, do some equities, some bonds, some gold, some property, some 3rd pillar, etc.



Now, according to what your situation is and what's your short, mid and long term going to look like (plans, milestones...), things have to be wisely distributed and studied.



Of course, all of this can be discussed, not everything has to be taken exactly as I put it because every situation is different as every experience is (good/bad experiences with stocks, good/bad experiences with property, etc.)!



If you wish to have more information on a subject, please feel free to contact me... and above all, be careful with general advices because not everything suits every situation and be careful with insurers...

Be very careful with diversification as you will buy loads of junk you don't want. Businesses that will always be bad are airlines, car manufacturers, banks & any commodity business that sells to a price.

As you say bonds are a bad deal, gold does well in times of high inflation so good luck with that.
Reply With Quote
  #10  
Old 19.05.2015, 11:53
newtoswitz's Avatar
Forum Veteran
 
Join Date: Jan 2010
Location: Rapperswil
Posts: 1,158
Groaned at 15 Times in 13 Posts
Thanked 1,310 Times in 596 Posts
newtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond repute
Re: 2nd and 3rd pillar in Switzerland versus buying property

Quote:
View Post
you might not have a 5% yield but, according to your "taux marginal d'imposition" (last taxation rate...?) that is linked to your income, you can have a ~30% "yield"/year!
Can you explain this? You obviously get a one-off tax saving when you invest, but how does this give 30% yield per year?

Also, where does 30% come from, that sounds extremely high.
Reply With Quote
  #11  
Old 19.05.2015, 12:08
dodgyken's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Democratic Republic Kenistan
Posts: 9,840
Groaned at 340 Times in 276 Posts
Thanked 17,510 Times in 6,686 Posts
dodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond repute
Re: 2nd and 3rd pillar in Switzerland versus buying property

Quote:
View Post
Can you explain this? You obviously get a one-off tax saving when you invest, but how does this give 30% yield per year?

Also, where does 30% come from, that sounds extremely high.
They are a financial advisory - you can't expect them to be good with numbers.

A pension, as mentioned before, is a deferral of tax. The idea being you pay in when paying higher tax, and take out when paying lower tax. Whether paying into a pension is a good idea is entirely dependent on the individual, their age, their risk profile and their own personal circumstances. There is little point someone with muscular atrophy having a pension if their life expectancy is only 60 years old!!
Reply With Quote
  #12  
Old 19.05.2015, 12:11
newtoswitz's Avatar
Forum Veteran
 
Join Date: Jan 2010
Location: Rapperswil
Posts: 1,158
Groaned at 15 Times in 13 Posts
Thanked 1,310 Times in 596 Posts
newtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond repute
Re: 2nd and 3rd pillar in Switzerland versus buying property

Yeah I get that, just thought it worth challenging the few specific numbers given since they seem to be c**p.

If they're not wrong, I'll take that 30% per year and retire in five years
Reply With Quote
  #13  
Old 19.05.2015, 12:37
Forum Legend
 
Join Date: Oct 2014
Location: Ostschweiz
Posts: 3,059
Groaned at 99 Times in 79 Posts
Thanked 3,803 Times in 1,962 Posts
Urs Max has a reputation beyond reputeUrs Max has a reputation beyond reputeUrs Max has a reputation beyond reputeUrs Max has a reputation beyond reputeUrs Max has a reputation beyond reputeUrs Max has a reputation beyond repute
Re: 2nd and 3rd pillar in Switzerland versus buying property

That 30% p.a. is BS indeed.

Firstly it depends on a persons marginal tax rate, which is less in many cases. Secondly it's only deferred, so even though you pay less the net effect is less than marginal tax rate. And thirdly, it's not repeating so "annually" is not appropriate. Though you get the once-off tax deferment every year, albeit on different income.
Reply With Quote
Reply




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
US taxes on 2nd and 3rd pillar rwabel Finance/banking/taxation 0 24.06.2014 05:13
3rd pillar and buying own house... happyrobbie Finance/banking/taxation 19 21.11.2012 11:54
Pay into 2nd pillar whilst drawing on 3rd pillar jaudi Finance/banking/taxation 19 12.07.2011 10:05
2nd versus 3rd Pillar + some other questions defcon3 Finance/banking/taxation 0 26.02.2011 19:59
2nd pillar pension to puchase property in the UK Swissscot Finance/banking/taxation 4 19.05.2008 18:41


All times are GMT +2. The time now is 12:01.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2016, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0