This is arguably the most important part of any persons financial planning. Every investment and every decision we make throughout our working life is with our retirement in mind. With this in mind it would make great sense for you to know exactly how much you need to save in order to be financially secure and retire when you want to.
Most of our clients assume that the pension system here in Switzerland will be more than enough to provide them with an income post retirement and therefore do not make any further provisions. While the Three Pillars provide a solid foundation for retirement, what happens if you want to retire earlier than 65? If you leave Switzerland before 65 and do not make all of your contributions?
A 40 year old with a normal retirement age of 65 has no current pension provisions except 50,000 Swiss Francs in savings and has recently moved to Switzerland and enjoys an income of 150,000 Swiss Francs.
Come retirement his 2nd pillar pension could be worth approximately 60,000 Swiss Francs per annum and his savings may have grown to 105,000 Swiss Francs which at a draw down of 5% would produce additional income of 5,287 per annum.
Current Income = 150,000
Projected Income = 65,287
Shortfall = 84,713
As you can see there is a substantial difference between what they earn today when compared to his projected income post retirement.
Even if you are in your thirties and think retirement is thirty plus years away, so you will address this later. The earlier you start to plan and invest in your future, the easier it will be for you to achieve your financial goals and objectives. You may even be able to retire earlier than expected, but the first step is to establish how much pension income you need and then what you already have in place today. Once you know your shortfall you can find tax efficient solutions to help reduce this gap.
Why not try our pension calculator by clicking on the image above or contact one of our advisors today.
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