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-   -   How do people prepare for their pensions? (https://www.englishforum.ch/finance-banking-taxation/298500-how-do-people-prepare-their-pensions.html)

darkvater 07.06.2020 16:51

How do people prepare for their pensions?
 
Spin-off from this - https://www.englishforum.ch/3183618-post102.html - thread where there were quite a few comments on my pension choices (https://www.englishforum.ch/3183655-post110.html).

We save about 25% of our income into pillar 2 (mandatory and voluntary) and pillar 3. It might seem a lot but there is no real substantial pension anywhere else, nor do we own a house or other things. We chose this as the state pension in about 30 years looks woefully low and have no idea what else to do so that it is still feasible to stay in Switzerland after retirement.

What do other people do? Do you not worry about your pensions? Do you have a better way of putting money aside?

omtatsat 07.06.2020 17:20

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by darkvater (Post 3188789)
Spin-off from this - https://www.englishforum.ch/3183618-post102.html - thread where there were quite a few comments on my pension choices (https://www.englishforum.ch/3183655-post110.html).

We save about 25% of our income into pillar 2 (mandatory and voluntary) and pillar 3. It might seem a lot but there is no real substantial pension anywhere else, nor do we own a house or other things. We chose this as the state pension in about 30 years looks woefully low and have no idea what else to do so that it is still feasible to stay in Switzerland after retirement.

What do other people do? Do you not worry about your pensions? Do you have a better way of putting money aside?

Better to live for the day and let the future take care of itself

doropfiz 07.06.2020 17:36

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by omtatsat (Post 3188793)
Better to live for the day and let the future take care of itself

That kind of saying is typically spoken by those who are totally cushioned by being well-off in the first place, or by those who have someone they can count on to bail them out if ever they fall on hard times, or by those who are simply irresponsible.

Or... maybe that's just a lovely dream of how nice it would be, if life could only be like that, and still be safe.

Island Monkey 07.06.2020 17:37

Re: How do people prepare for their pensions?
 
Yep, I know a couple of people who saved and waited for retirement To do everything, then died just before. Live whilst you can!

Phil_MCR 07.06.2020 17:38

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by darkvater (Post 3188789)
What do other people do? Do you not worry about your pensions? Do you have a better way of putting money aside?

I put minimum into my pillar 2 as I don't like the inflexibility of having the money locked up for so long (and having limited investment options).

I've invested in property and also in taxable accounts.

fatmanfilms 07.06.2020 17:42

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by darkvater (Post 3188789)
Spin-off from this - https://www.englishforum.ch/3183618-post102.html - thread where there were quite a few comments on my pension choices (https://www.englishforum.ch/3183655-post110.html).

We save about 25% of our income into pillar 2 (mandatory and voluntary) and pillar 3. It might seem a lot but there is no real substantial pension anywhere else, nor do we own a house or other things. We chose this as the state pension in about 30 years looks woefully low and have no idea what else to do so that it is still feasible to stay in Switzerland after retirement.

What do other people do? Do you not worry about your pensions? Do you have a better way of putting money aside?

www.fundsmith.co.uk allowed me to retire early, Swiss pension returns are very poor. Since retiring 5.75 years ago & spending my capital I have roughly twice as much money as I had when I retired, this is lucky as I got married & my expenses have doubled. :msnnerd:

Island Monkey 07.06.2020 17:43

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by doropfiz (Post 3188795)
That kind of saying is typically spoken by those who are totally cushioned by being well-off in the first place, or by those who have someone they can count on to bail them out if ever they fall on hard times, or by those who are simply irresponsible.

Or those that don't have enough money. You can choose to do things now, or save all your money for a time that may never come.

fatmanfilms 07.06.2020 17:58

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by Island Monkey (Post 3188799)
Or those that don't have enough money. You can choose to do things now, or save all your money for a time that may never come.

You were not listening at school when compound interest was explained.

100 a month for 40 years growing at 12% gives 1,400,000, Fundsmith will likely return substantially more in the last 9.5 years including the recent crash it's compounded at over 18% in both or Euros.

Thats right under 5 Chf per work day will give you over 1 million

wantone 07.06.2020 18:14

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by fatmanfilms (Post 3188798)
www.fundsmith.co.uk allowed me to retire early, Swiss pension returns are very poor. Since retiring 5.75 years ago & spending my capital I have roughly twice as much money as I had when I retired, this is lucky as I got married & my expenses have doubled. :msnnerd:

I don't understand how you calculate that you have double money now. If you are talking about net worth it is not cash and could be illiquid especially real estate. Funds, stocks etc the valuation can change any day.

Can you please explain?

fatmanfilms 07.06.2020 18:35

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by wantone (Post 3188806)
I don't understand how you calculate that you have double money now. If you are talking about net worth it is not cash and could be illiquid especially real estate. Funds, stocks etc the valuation can change any day.

Can you please explain?

I had the majority of my net worth in the fund, now split with Smithson. The price has more than tripled since I first invested so my net worth has more than doubled since retiring after living costs. It’s been a great investment. At 31/12/19 property & cash represented less than 20% of my net worth, that will change as I bought another property in March but I have one to sell.

KiwiSteve 07.06.2020 19:24

Re: How do people prepare for their pensions?
 
You can have your cake and eat it (in Switzerland at least). Live for today, but cheaply.
The Swiss AHV has lost real value over the last 40 years and probably will continue to do so. It is no longer something that would afford you a basic retirement in Switzerland and comfortable retirement abroad. However the social net will pay the bills if you are short, you just do not get to decide where you live.
As to what are good investments; your children, teach them well. If you don't, they will teach you (Apologies to CS&N).

Medea Fleecestealer 07.06.2020 19:39

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by fatmanfilms (Post 3188798)
www.fundsmith.co.uk allowed me to retire early, Swiss pension returns are very poor. Since retiring 5.75 years ago & spending my capital I have roughly twice as much money as I had when I retired, this is lucky as I got married & my expenses have doubled. :msnnerd:

Which fund do you use: Fund class T Acc or Inc? And could I invest in the UK one, even though based in Switzerland? I have a UK bank account with money I could invest sitting doing nothing atm.

omtatsat 07.06.2020 19:51

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by doropfiz (Post 3188795)
That kind of saying is typically spoken by those who are totally cushioned by being well-off in the first place, or by those who have someone they can count on to bail them out if ever they fall on hard times, or by those who are simply irresponsible.

Or... maybe that's just a lovely dream of how nice it would be, if life could only be like that, and still be safe.

There are some people who spend there whole life in the pursuit of safety. They never really live

BasP72 07.06.2020 19:53

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by fatmanfilms (Post 3188798)
www.fundsmith.co.uk allowed me to retire early, Swiss pension returns are very poor. Since retiring 5.75 years ago & spending my capital I have roughly twice as much money as I had when I retired, this is lucky as I got married & my expenses have doubled. :msnnerd:

This looks like a cheesy non-trustworthy tell sell commercial...?

roegner 07.06.2020 20:04

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by BasP72 (Post 3188831)
This looks like a cheesy non-trustworthy tell sell commercial...?

Nah, I have Fundsmith as well and am stocking up 😀

doropfiz 07.06.2020 20:13

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by omtatsat (Post 3188830)
There are some people who spend there whole life in the pursuit of safety. They never really live

Yes, you're right about that, and it's tragic. Some folk simply have no other option, when each little corner of safety is hard won, against high opposition or dire circumstances.

Those who are in a better place than that, have the opportunity to plan. So they may as well do so wisely.

fatmanfilms 07.06.2020 21:06

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by Medea Fleecestealer (Post 3188825)
Which fund do you use: Fund class T Acc or Inc? And could I invest in the UK one, even though based in Switzerland? I have a UK bank account with money I could invest sitting doing nothing atm.

Phil_MCR has invested in the UK fund directly, I have also but only as a transfer of an old PEP/ISA from 25 years ago. As you can choose to reinvest the dividends it makes no difference, the dividend from accumulation units is in theory taxable in CH, however I never realised (I only held accumulation) & the tax office never noticed the error.

The majority of my UK holdings are held via Hargreaves Lansdown, this account was opened whilst Swiss resident. I also hold the Luxembourg fund directly.

Guest 07.06.2020 21:16

Re: How do people prepare for their pensions?
 
It all depends. We're not willing to cut down on our expenses to save up extra and have no problem with moving elsewhere if needed to lead a proper life.

It's easy when you come here when you're young and basically are able to do as the Swiss do, but if you already spend half your labour life elsewhere and are not in the position to set aside big bucks it likely will hurt to pension here, and many people leave the country when retiring since half a Swiss pension already gives a very decent life in many other places.

fatmanfilms 07.06.2020 21:18

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by BasP72 (Post 3188831)
This looks like a cheesy non-trustworthy tell sell commercial...?

People have been saying as much since 17/11/2012 when I first mentioned the Fund on the forum. https://www.englishforum.ch/1719119-post39.html

Closing price on 15/11/2012 1.2732 12.4649

Closing price 5/6/2020 491.97 42.19

in increased 3.86 times, in increased 3.385 times. You were a member back then, shame you did not join in on the ride

Urs Max 07.06.2020 23:07

Re: How do people prepare for their pensions?
 
Quote:

Originally Posted by fatmanfilms (Post 3188854)
People have been saying as much since 17/11/2012 when I first mentioned the Fund on the forum. https://www.englishforum.ch/1719119-post39.html

Closing price on 15/11/2012 1.2732 €12.4649

Closing price 5/6/2020 491.97 €42.19

in increased 3.86 times, in € increased 3.385 times. You were a member back then, shame you did not join in on the ride

To be fair, their track record a couple years ago (or today for that matter) is quite a bit different from 6-8-10 years ago. The far-from-great progress of FEET (managed by the same team, with the same investment approach, but invests in different world regions and markets) supports the notion that one should want a multi-year track record before getting tooo excited.

That said Fundsmith's track record speaks for itself, and looks like it will be very difficult to beat.
Quote:

Originally Posted by fatmanfilms (Post 3188849)
Phil_MCR has invested in the UK fund directly, I have also but only as a transfer of an old PEP/ISA from 25 years ago.

Same, paid in from IB(London). Still, took unexpectedly long to get my first T(acc), multiple back-and-forth. The top-ups went smoothly.


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