So, I hope it won’t be “yet another post about the 3rd pillar scam” I’ve read several threads but I’m still a bit confused.
I implemented a classic mustachian setup, nothing new… 3 months of emergency fund, saving roughly 45-50% of pay, using VIAC 3a and investing in the usual cheap ETFs via the usual cheap broker, no gaps in 2nd pillar, no fancy cars, no Vuitton bags etc etc (just a passion for vintage motorbikes, but it’s under control )
But I have a very anti-mustachian tool as well… the 3B pillar at the insurance.
At the time I thought it was not that bad because it’s deductible in Geneva (I don’t put more than what I can deduct) and it’s invested 40% in equities (through the Pictet LPP 40 fund: Bloomberg - Are you a robot?).
Doing a very quick calculation, if I exclude their “average” or “good” scenarios, and I will get the minimum amount they are promising at 65y… I will lose roughly 9k CHF in 40 years, ~225 CHF per year (the contract is 2018-2058)
I also hope Pictet will manage to do something better than the worst-case-scenario
But at the same time, with a standard life insurance I won’t get anything at all. I can cancel the insurance whenever I want, but I don’t get any money back.
The only advantage, might be a higher premium if I die or get unable to work… but is it really worth it?
Or the thing is that I could invest all this money more efficiently in ETF and just waste as less as possible for a cheap but decent life insurance, if needed?
For me it’s clear why we should stay away from 3A with life insurance.
But when it comes to a deductible 3B with at least some exposure to equities, is it still that bad in your opinion? Sorry for the n00b doubt, I know that for a comprehensive answer we would need to check the policy and read all the contract… but I’m wondering if it’s always a stupid choice to have this solution in place.
To be completely honest, I don’t think I’m going to cancel it so soon. I’ve been recently diagnosticated with an health issue that likely won’t allow me to get another life insurance for a while, so since I’m married I think it’s wiser to keep something “just in case” (yep, I know, “safety is an expensive illusion” )
But I still would like to understand and eventually change in the future, if there are better choices.