Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #1  
Old 27.03.2020, 19:25
Forum Veteran
 
Join Date: Feb 2009
Location: Geneva
Posts: 776
Groaned at 28 Times in 13 Posts
Thanked 688 Times in 315 Posts
Marsalforn has a reputation beyond reputeMarsalforn has a reputation beyond reputeMarsalforn has a reputation beyond reputeMarsalforn has a reputation beyond repute
Retirement dilemma

I reach retirement age in 14 months. However, by that time its likely for my 2nd pillar that the conversion rate will have been lowered to pay for the present crisis, and that the fund will be worth even less than it is now due to low interest rates

I have a 3 month notice period. I'm wondering whether I shouldn't hand in my notice immediately and retire 10 months early.

Any opinions would be gratefully received.
Reply With Quote
This user would like to thank Marsalforn for this useful post:
  #2  
Old 27.03.2020, 19:37
Forum Legend
 
Join Date: Oct 2014
Location: Nyon
Posts: 5,202
Groaned at 292 Times in 206 Posts
Thanked 7,108 Times in 3,345 Posts
bowlie has a reputation beyond reputebowlie has a reputation beyond reputebowlie has a reputation beyond reputebowlie has a reputation beyond reputebowlie has a reputation beyond reputebowlie has a reputation beyond repute
Re: Retirement dilemma

Can you not simply retire early? You get less per month, but you collect it for 14 additional months?
Reply With Quote
The following 2 users would like to thank bowlie for this useful post:
  #3  
Old 27.03.2020, 19:47
Ardmore's Avatar
Newbie 1st class
 
Join Date: Aug 2016
Location: Zürich
Posts: 11
Groaned at 1 Time in 1 Post
Thanked 9 Times in 6 Posts
Ardmore has no particular reputation at present
Re: Retirement dilemma

perhaps you could take your pension in cash, conversion rates are anyway appalling
Reply With Quote
This user would like to thank Ardmore for this useful post:
  #4  
Old 27.03.2020, 19:50
HIAO's Avatar
Forum Veteran
 
Join Date: Jun 2011
Location: Bellevue
Posts: 1,337
Groaned at 8 Times in 7 Posts
Thanked 3,435 Times in 959 Posts
HIAO has a reputation beyond reputeHIAO has a reputation beyond reputeHIAO has a reputation beyond reputeHIAO has a reputation beyond reputeHIAO has a reputation beyond reputeHIAO has a reputation beyond repute
Re: Retirement dilemma

Quote:
View Post
I reach retirement age in 14 months. However, by that time its likely for my 2nd pillar that the conversion rate will have been lowered to pay for the present crisis, and that the fund will be worth even less than it is now due to low interest rates

I have a 3 month notice period. I'm wondering whether I shouldn't hand in my notice immediately and retire 10 months early.

Any opinions would be gratefully received.
I’m a trustee of my employers pension plan; we reduced the conversion rate, and will almost certainly do this again in the future.

We recognized the impact for staff closer to retirement age and phased the implementation of the reduction over 30 months.

Would it be better if your employer terminated your employment? You’d remain eligible for chômage and even better if your employer offered a severance payment. And, then, no need to early retire.
Reply With Quote
The following 4 users would like to thank HIAO for this useful post:
  #5  
Old 27.03.2020, 21:52
me.anon's Avatar
Forum Veteran
 
Join Date: Jan 2012
Location: thun
Posts: 2,165
Groaned at 49 Times in 33 Posts
Thanked 2,861 Times in 1,387 Posts
me.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond repute
Re: Retirement dilemma

Quote:
View Post
I reach retirement age in 14 months. However, by that time its likely for my 2nd pillar that the conversion rate will have been lowered to pay for the present crisis, and that the fund will be worth even less than it is now due to low interest rates

I have a 3 month notice period. I'm wondering whether I shouldn't hand in my notice immediately and retire 10 months early.

Any opinions would be gratefully received.
Does your current pension scheme allow you to retire early and immediately draw a (reduced) benefit ? Some pension schemes allow you to retire at 58 and even encourage you to go with assistance to cover the period until you can get your regular old age pension (AHV). If you don't know, it definitely worth speaking to them.

If you are below retirement age and are not working, you have to pay higher AHV contributions depending on your income and wealth. I have to pay this also for my wife. It is painful but not quite as bad as having to work.

My personal opinion: If you can afford to go now, then give it serious consideration.

The present crisis, if you are referring to the Corona virus, may actually help pension funds if it weeds out their older beneficiaries !
__________________
If you have difficulties with a post which contains a link to a site in one of the Swiss languages, use Google Translate or your own favourite translating browser.
Reply With Quote
The following 3 users would like to thank me.anon for this useful post:
  #6  
Old 27.03.2020, 22:17
Forum Veteran
 
Join Date: Feb 2009
Location: Geneva
Posts: 776
Groaned at 28 Times in 13 Posts
Thanked 688 Times in 315 Posts
Marsalforn has a reputation beyond reputeMarsalforn has a reputation beyond reputeMarsalforn has a reputation beyond reputeMarsalforn has a reputation beyond repute
Re: Retirement dilemma

My problem is the following. If I retire now, interest rates are so low I will get very little. If I retire later, the conversion rate will doubtless be lowered, to pay for what has been spent during virus times.
Reply With Quote
  #7  
Old 27.03.2020, 22:21
Guest
 
Posts: n/a
Re: Retirement dilemma

Just wondering, do you intend to stay in Switzerland or go and live somewhere where your CHF pension will go a lot further?
Reply With Quote
This user would like to thank for this useful post:
  #8  
Old 28.03.2020, 11:20
Forum Veteran
 
Join Date: Feb 2009
Location: Geneva
Posts: 776
Groaned at 28 Times in 13 Posts
Thanked 688 Times in 315 Posts
Marsalforn has a reputation beyond reputeMarsalforn has a reputation beyond reputeMarsalforn has a reputation beyond reputeMarsalforn has a reputation beyond repute
Re: Retirement dilemma

Quote:
Just wondering, do you intend to stay in Switzerland or go and live somewhere where your CHF pension will go a lot further?
I would like to retire here if financially possible.
Reply With Quote
This user would like to thank Marsalforn for this useful post:
  #9  
Old 28.03.2020, 12:45
Guest
 
Posts: n/a
Re: Retirement dilemma

Quote:
View Post
I would like to retire here if financially possible.
Retiring in Switzerland should be possible for most on a Swiss pension- the question is where. Some regions have much much lower costs, but higher taxes- so just depends on your personal situation and if prepared to re-locate.
Reply With Quote
This user would like to thank for this useful post:
  #10  
Old 27.03.2020, 22:56
me.anon's Avatar
Forum Veteran
 
Join Date: Jan 2012
Location: thun
Posts: 2,165
Groaned at 49 Times in 33 Posts
Thanked 2,861 Times in 1,387 Posts
me.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond reputeme.anon has a reputation beyond repute
Re: Retirement dilemma

Quote:
View Post
My problem is the following. If I retire now, interest rates are so low I will get very little. If I retire later, the conversion rate will doubtless be lowered, to pay for what has been spent during virus times.
I doubt if 10 months makes much difference.

If your pension fund offers early retirement, there will be a clearly defined conversion rate (Umwandlungssatz) depending on your age at the time of leaving (years and months). You can almost certainly ask for estimate of what that means for you if you opt to take a monthly income. Also compare that with an estimate of what you will get if you wait until the regular retirement age. If you take a full lump sum, then it is irrelevant. In any case, you can surely ask for the rules of the pension fund and work it out for your self.

The pension fund is also not that free to alter the conversion rate, it is fixed by law, although it gets complicated here because some of the money in your fund may not be protected by the law, which could include any extra (non-mandatory) contributions you made.

Depending on your pension fund rules, if you go before a certain age, they may give you only a full lump sum, transferred into a blocked account. However, as you are so close to a regular retirement, you'd probably not be treated so harshly and you may still be given a choice.

If you are worried that your pension fund is in such bad shape that it needs a "Sanierung" (partial liquidation) then going now may not help because they will attempt to ensure that early leavers don't escape having to make a contribution to sorting it out.

Are you incidentally going to take a lump sum or a regular income or a combination of both or are you not sure ?
__________________
If you have difficulties with a post which contains a link to a site in one of the Swiss languages, use Google Translate or your own favourite translating browser.
Reply With Quote
This user would like to thank me.anon for this useful post:
  #11  
Old 27.03.2020, 23:13
Pachyderm's Avatar
Forum Veteran
 
Join Date: Feb 2012
Location: Zurich
Posts: 1,516
Groaned at 74 Times in 53 Posts
Thanked 3,314 Times in 1,131 Posts
Pachyderm has a reputation beyond reputePachyderm has a reputation beyond reputePachyderm has a reputation beyond reputePachyderm has a reputation beyond reputePachyderm has a reputation beyond reputePachyderm has a reputation beyond repute
Re: Retirement dilemma

Why not ask for redundancy?
  • You'll probably get a severance payment
  • You can sign up with the RAV and get 70-80% of your income for the next 14 months
  • You'll get all your Pillar 2 contributions refunded which you can invest while the stock market is low. Yes, it might go lower, but it should eventually rise again
  • Or if you're planning to retire to another country, keep it in cash because, along with your severance payment and other savings, your money is probably suddenly worth a lot more.
  • Depending on your job, you may well be stuck at home in any case for a few months. Why not be done with it?
  • Your employer might appreciate a voluntary departure if things remain bad.
Reply With Quote
This user would like to thank Pachyderm for this useful post:
  #12  
Old 28.03.2020, 09:06
Senior Member
 
Join Date: Jul 2016
Location: GR
Posts: 452
Groaned at 21 Times in 17 Posts
Thanked 147 Times in 125 Posts
wantone has no particular reputation at present
Re: Retirement dilemma

Quote:
View Post
Why not ask for redundancy?
  • You'll probably get a severance payment
  • You can sign up with the RAV and get 70-80% of your income for the next 14 months
  • You'll get all your Pillar 2 contributions refunded which you can invest while the stock market is low. Yes, it might go lower, but it should eventually rise again
  • Or if you're planning to retire to another country, keep it in cash because, along with your severance payment and other savings, your money is probably suddenly worth a lot more.
  • Depending on your job, you may well be stuck at home in any case for a few months. Why not be done with it?
  • Your employer might appreciate a voluntary departure if things remain bad.
Why an employer is this shitty situation will give packages? I doubt they will.
Reply With Quote
The following 2 users would like to thank wantone for this useful post:
  #13  
Old 27.03.2020, 22:37
Jack of all trades.'s Avatar
Forum Veteran
 
Join Date: Jun 2009
Location: Basel
Posts: 813
Groaned at 21 Times in 14 Posts
Thanked 665 Times in 323 Posts
Jack of all trades. has a reputation beyond reputeJack of all trades. has a reputation beyond reputeJack of all trades. has a reputation beyond reputeJack of all trades. has a reputation beyond repute
Re: Retirement dilemma

This one is balancing 10 months with whatever.

Who cares about whatever when 10 months are at stake.

10 months is, well not major if you have already considered throwing it down the toilet.

I say hang in there with will power and have a horror time for 10 months and then you will feel much better afterwards.

Think of all the stuff that lasted for more than 10 months that you got through with nothing but will power. Heaps. And your 10,000 year old mind (that is still running through the forests etc) will do the rest to convince you that you are the guru.
__________________
England and America are two countries separated by a common language. George Shaw 1856-1950
Reply With Quote
This user would like to thank Jack of all trades. for this useful post:
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
Present dilemma. sam ali Other/general 16 03.05.2015 14:13
Dilemma k_and_e General off-topic 4 30.03.2013 07:49
Need Help with Car / MFK dilemma abrsive Transportation/driving 11 30.11.2012 16:37
Help - Insurance dilemma Stuart Halford Insurance 4 25.07.2012 10:01
Car Dilemma Commissioner Gordon Transportation/driving 7 14.06.2011 09:12


All times are GMT +2. The time now is 13:32.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0