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Old 20.05.2021, 14:56
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AHV calculation question

I was trying to understand how AHV is calculated. I know you need 44 full contribution years and there is a minimum AHV and a maximum capped AHV received depending on how much your average salary is.

My question is how the average is calculated and how it is capped. In an extreme example, if you earned $100 million in year one and for the remaining years had only a small salary and paid the minimum AHV, would your final entitlement be the maximum AHV because the salary averaged out over 44 years would be large, or would the year 1 be capped so that you get somewhere near the minimum AHV entitlement?
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Last edited by Phil_MCR; 20.05.2021 at 15:08.
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Old 20.05.2021, 15:12
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Re: AHV calculation question

Average - so yes in this case you would get a maximum pension. Actually you'd only need to earn about 3m in one year and the minimum in the other 43 for that to work.

https://www.credit-suisse.com/ch/en/...an-201803.html
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Old 20.05.2021, 15:19
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Re: AHV calculation question

AHV pension depends on these two parameters:

1) average salary/income on which you paid AHV during your years of contributions to AHV system. It's capped at 84600 CHF - if you've made at least that much on average (making $3.8M+ in any single year and contributing bare minimum in others will suffice) you're in principle entitled to the maximum AHV pension, 2390 CHF per month currently.

2) number of full years of AHV contributions. You're supposed to contribute for 44 years to get that maximum pension. If you contributed less, your pension gets pro-rated: 2390*(#years)/44 per month.


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would the year 1 be capped so that you get somewhere near the minimum AHV entitlement?
For 1 year of contributions in total, even if you took $100M salary, you can get at most 2390/44 = 54 Fr per month pension from the state. You would still be expected to contribute $100M * 5.3% * 2 on that $100M salary - the salary cap is only on payouts, but not on pay-ins! They call it solidarity...

Last edited by spark; 20.05.2021 at 15:32.
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Old 20.05.2021, 15:32
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Re: AHV calculation question

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I was trying to understand how AHV is calculated. I know you need 44 full contribution years and there is a minimum AHV and a maximum capped AHV received depending on how much your average salary is.

My question is how the average is calculated and how it is capped. In an extreme example, if you earned $100 million in year one and for the remaining years had only a small salary and paid the minimum AHV, would your final entitlement be the maximum AHV because the salary averaged out over 44 years would be large, or would the year 1 be capped so that you get somewhere near the minimum AHV entitlement?
There is an AHV website where you can put in earnings for every year if you have ever fell below the approx 85k max that AHV is calculated on, and also play about with early / late retirement.
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Old 20.05.2021, 15:39
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Re: AHV calculation question

here is the AHV pension estimate calculator

From the AHV website
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Old 20.05.2021, 15:42
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Re: AHV calculation question

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There is an AHV website where you can put in earnings for every year if you have ever fell below the approx 85k max that AHV is calculated on, and also play about with early / late retirement.
thanks. i played with that which does suggest you get the full ahv in my scenario, but i wasn't just going to trust that blindly!
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