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  #161  
Old 26.08.2020, 12:05
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Re: Do you think about your future/retirement etc?

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Assuming inflation of 2%, your capital growth would only need to be a very modest 4% per year for you to actually start making even more money in retirement.
4% then plus 1% for wealth tax and you're up to 5% already.

although you say 4% is modest. the only guaranteed return you get now in CHF is negative.

with the stock market you are then exposed to sequence of returns risk.

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Personally, I am planning for a drawdown rate of around 2.5% (corresponding to 4M here) - but to live in a cheaper country than Switzerland when im retired, so I need less than 4M. I would generally advise that the drawdown rate is no more than 4%, ideally no more than 3.5%.
same. i budget for 1.5% drawdown plus 1% wealth tax to give annual drawdown of 2.5%.
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  #162  
Old 26.08.2020, 12:15
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Re: Do you think about your future/retirement etc?

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4% then plus 1% for wealth tax and you're up to 5% already.

although you say 4% is modest. the only guaranteed return you get now in CHF is negative.

with the stock market you are then exposed to sequence of returns risk.



same. i budget for 1.5% drawdown plus 1% wealth tax to give annual drawdown of 2.5%.
If 40% of your drawdown is to pay wealth taxes, you need to move to a more tax friendly jurisdiction.
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  #163  
Old 26.08.2020, 12:17
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Re: Do you think about your future/retirement etc?

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If 40% of your drawdown is to pay wealth taxes, you need to move to a more tax friendly jurisdiction.
Laws a and tax regimes are changing all the time, and there is no guarantee that a place that is advantageous today will still be so further along in your retirement.
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  #164  
Old 26.08.2020, 12:25
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Re: Do you think about your future/retirement etc?

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Portugal I still like but with the UK leaving the EU that complicates matters
Get a second wife and lose the remaining wealth that you did not lose in the first divorce

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Money aside, a point to add to the mix is, traditionally the wife outlives the husband by a good few years.
A lot of couples moving to foreign climes only have each other, or a tiny handful of friends, for company.
Exactly same here for me so no big difference.
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  #165  
Old 26.08.2020, 12:36
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Re: Do you think about your future/retirement etc?

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If 40% of your drawdown is to pay wealth taxes, you need to move to a more tax friendly jurisdiction.
I had looked into it. The neighbouring canton 25 minutes away would cut it by 1/3 maybe.

Swiss property may also be a potential wealth tax shield.
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  #166  
Old 26.08.2020, 12:53
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Re: Do you think about your future/retirement etc?

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I had looked into it. The neighbouring canton 25 minutes away would cut it by 1/3 maybe.

Swiss property may also be a potential wealth tax shield.
It's clear why Swiss Bank numbered accounts existed
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  #167  
Old 26.08.2020, 12:56
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Re: Do you think about your future/retirement etc?

But do you really need to offset your drawdown? What is the benefit of dying and still having 4M in bank account? I would rather spend it all, just one problem - timing. How to get it right?

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If you get to 5M, 100k a year to cover your health insurance and living costs would only be a drawdown rate of 2%.

Assuming inflation of 2%, your capital growth would only need to be a very modest 4% per year for you to actually start making even more money in retirement.

If one was to retire on a more realistic 3M, and take the same 100K a year that would need 5.33% capital growth a year to maintain existing funds after inflation. Still very achievable in the stockmarket.

At 2M that's 7% - probably getting close to what you would expect from the stock market. A few bad years in a row and you might not recover and start eating your funds. If the first few years are good you would probably be ok. Broadly speaking getting into risky territory.

Personally, I am planning for a drawdown rate of around 2.5% (corresponding to 4M here) - but to live in a cheaper country than Switzerland when im retired, so I need less than 4M. I would generally advise that the drawdown rate is no more than 4%, ideally no more than 3.5%.
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  #168  
Old 26.08.2020, 13:11
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Re: Do you think about your future/retirement etc?

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Money aside, a point to add to the mix is, traditionally the wife outlives the husband by a good few years.
A lot of couples moving to foreign climes only have each other, or a tiny handful of friends, for company.
That is a really good point you raise.. I think making sure you are in the best health you can be as you approach retirement and beyond is important!

Agree money aside, there are many other things to consider.
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  #169  
Old 26.08.2020, 13:30
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Re: Do you think about your future/retirement etc?

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That is a really good point you raise.. I think making sure you are in the best health you can be as you approach retirement and beyond is important!

Agree money aside, there are many other things to consider.
Agreed, and the access to a good standard of medical care is one of the reasons that Crete is on my list. It has University of Crete – School of Medicine University Hospital which is a centre of excellence for Biomedical Sciences.
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  #170  
Old 27.08.2020, 09:26
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Re: Do you think about your future/retirement etc?

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it's true that you can deplete capital. however, you're unlikely to squeeze out more than 1% over taking the natural yield without running out of funds.
that's way too cautios. Even hardcore FIRE enthusiasts will calculate with a 3% withdrawal at least.

You just need to generate enough cash until regular retirement age kicks in (as in: wing it ) and just take the annuity from there. Also 2nd pillar can be taken short (58 in some cases) with a slight to moderate penalty to it.

and agree to not save capital. Either put it into property or just calculate to live a 100 years and deplete your capital until then.

Last edited by user137; 27.08.2020 at 09:37.
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  #171  
Old 27.08.2020, 09:41
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Re: Do you think about your future/retirement etc?

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that's way too cautios. Even hardcore FIRE enthusiasts will calculate with a 3% withdrawal at least.

You just need to generate enough cash (as in: wing it ) until regular retirement age kicks in and just take the annuity from there. Also 2nd pillar can be taken short (58 in some cases) with a slight to moderate penalty to it.
Phil was calculating 2.5% drawdown so adding 1% gives 3.5%

I worked with 4%, however actual investment returns less 10% gives roughly 8% drawdown since retiring 6 years ago.
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  #172  
Old 27.08.2020, 09:41
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Re: Do you think about your future/retirement etc?

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4% then plus 1% for wealth tax and you're up to 5% already.

although you say 4% is modest. the only guaranteed return you get now in CHF is negative.

with the stock market you are then exposed to sequence of returns risk.



same. i budget for 1.5% drawdown plus 1% wealth tax to give annual drawdown of 2.5%.
Do you really have to retire in Geneva? Most other cantons are at 0.5% (at 5M wealth) or even lower 0.25% for Zug.
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  #173  
Old 27.08.2020, 11:06
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Re: Do you think about your future/retirement etc?

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Either put it into property or just calculate to live a 100 years and deplete your capital until then.
my point is that depleting capital doesn't buy you as much extra as you think.

assuming a natural yield of 3% that will otherwise last forever. if you wanted to deplete over 60 years, then you would only be able to withdraw 3.6%

i'd rather build up a larger captial amount have it be there until i die and act as an emergeny fund instead of getting to old age watching the amounts dwindle and worry about whether it will last or not. (actually, i would prefer to build slightly more so that the amount grows throughout retirement).
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  #174  
Old 27.08.2020, 11:08
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Re: Do you think about your future/retirement etc?

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Do you really have to retire in Geneva? Most other cantons are at 0.5% (at 5M wealth) or even lower 0.25% for Zug.
i think the actual number was 0.75% for where i am in basel land. the thing is i am here now and whether it is worth the hassle of moving somewhere else.
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  #175  
Old 27.08.2020, 11:18
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Re: Do you think about your future/retirement etc?

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if you wanted to deplete over 60 years,
man you got some perspectives with your retirement! Into 110 years and beyond!
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Old 27.08.2020, 11:38
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Re: Do you think about your future/retirement etc?

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man you got some perspectives with your retirement! Into 110 years and beyond!
people live to 110 now. who knows what medical advances the next 60 years will bring...
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  #177  
Old 27.08.2020, 12:08
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Re: Do you think about your future/retirement etc?

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Do you really have to retire in Geneva? Most other cantons are at 0.5% (at 5M wealth) or even lower 0.25% for Zug.

Exactly, it is all a matter of location, location. location. And not just tax but also cost of housing, be it rentals or purchase. An apartment that would be 3000 in Geneva could be a 1/3 that at the foot of the Jura- or less. And houses which would be 3 mio in Geneva, could also be less than 1 mio. Combine a good tax location and cheaper housing, and there is no reason you shouldn't be able to retire in CH.
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Old 27.08.2020, 15:36
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Re: Do you think about your future/retirement etc?

I can't think of any canton where the wealth tax is 1%. In Ticino it starts at 1 per mille and goes up to 3 per mille. So on CHF 3 million the tax would be chf 9,000 and on CHF 1m CHF 1,000.

What I find so wrong about this tax, is that with current interest rates being -0.75% and the banks paying nothing, it actually depletes your capital! Anyway, that's perhaps for another thread!!
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  #179  
Old 27.08.2020, 15:46
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Re: Do you think about your future/retirement etc?

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I can't think of any canton where the wealth tax is 1%. In Ticino it starts at 1 per mille and goes up to 3 per mille. So on CHF 3 million the tax would be chf 9,000 and on CHF 1m CHF 1,000.

What I find so wrong about this tax, is that with current interest rates being -0.75% and the banks paying nothing, it actually depletes your capital! Anyway, that's perhaps for another thread!!
Probably cheaper than a 30% CGT
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  #180  
Old 27.08.2020, 16:48
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Re: Do you think about your future/retirement etc?

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Probably cheaper than a 30% CGT
Yes, but that's a tax on gains. The wealth tax is a tax on your capital - even if you make no gains!
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