Allow me to introduce myself: they call me cubanpete

Share your story
1

I like the song from the mask, therefor I chose that name.

I was born in Switzerland 63 years ago. I will not tell life stories, they are too weird for anybody to believe. Try to limit it to financials.

My first money I made at the world championship of crossbow 1973. My job was to “stamp” the results of the shooters on a piece of paper and then add them to the total. I was 11 years of age, but apparently had better math skills than some of the older club members. Made CHF 5 per hour which was a lot of money then.

With 15 years I started my first official job at a GM car shop. Made CHF 170 per month, but it was far away and I had to pay for train tickets and food. Usually I had to go to work the last 5-10 days of every month without a single cent in my pocket. With 16 years they deducted AHV what made the situation even worse.

With 18 years that changed, I started programming computers and made a shitton of money. With 20 years I stopped working for travel and learning languages the first time. Best investment of my whole life.

Started a company when I came back a few years later, mainly to rent myself out to the highest bidder. Made much money, but it peaked in the 90s. So I accepted a executive job at a Swiss bank and stayed there until 2014.

2014, with 51 years of age, I decided to cash out my 2nd and 3rd pillar (went to live in Latin America for 2 years) and invest the money myself. That was when I came up with my first mechanical investment strategy. A dividend stock investment to produce the cashflow I need for living. That worked out nice, so I started a second more risky strategy 5 years ago. I opened a thread “mechanical investments” where I wrote down every detail of the dividend strategy and some general points about mechanical investments in the stock market.

I was very lucky. I’m in the stock and bonds market for more than 4 decades and have seen a lot of bear markets. But now I am sure that I will make it, in 2 years I get my AHV.

20 Likes
2

:rofl: this conclusion made my day !

3 Likes
3

Given the description above, I was expecting that AHV would be irrelevant for you and investments is more than enough to fund your lifestyle?

1 Like
4

Actually yes, it is not relevant. I am already over the target I did set for myself when reaching 65… and still 2 years left.

Therefore I am thinking about getting AHV already now with a loss of 13.6%. At least one nice evening per month in Switzerland (just joking) and getting back some of the suffering of working without a cent in my pocket when I was young.

5

Which particular country did you chose and why ?

6

Yeah. I sometimes wonder whether it is better to take earlier and have the flexibility or defer it and have more ‘inflation adjusted’ income later in life.

7

Costa Rica, with some time spent in Nicaragua and Panama. 2014 there was no expat tax there, but now I think there is. Loved it, but my wife wanted to come back to Europe.

I’ve been to many countries in Latin America, but Costa Rica has by far the most peaceful people, they do not even have an army. Half of the country is natural park or protected. It is quite expensive for Latin America, but of course coming from Switzerland that does not matter too much.

Made a lot of friends there, good people. But in this forum I wanted to speak only about money. If you live off dividends you pay 30% instead of 15% withholding tax on U.S. dividends because there is no tax treaty. You may end up paying less tax in Switzerland… I think I do.

I am not sure if they finally did introduce the 40% expat tax that was announced, but in this case you’ll pay 70% on U.S. dividends because they still don’t have a double tax treaty. But I am sure nobody pays that, it is still Latin America.

6 Likes
8

And I did it.

Asked for early retirement from AHV. Nice people in my municipality did explain everything to me today and did provide the needed links. I just sent off the online application. I will be officially retired in October.

Once my wife that is younger retires, my pension will go down. Except a judge finds this against constitution until then. Or I get divorced. 33% more pension for a divorce, many people do that… I won’t.

After entering all data I got a prediction of CHF 1’829 per month. Way more than I expected and probably more than I can/want to spend in an evening. Except for the first payment maybe, Fiesta!

14 Likes
10

Congrats on retirement and on your life so far !

The people who do often only think of the now and don’t take into account that those 33% more come at the cost of the survivorship benefits when one of the partner comes to die. It’s very possible the 33% for the years both are alive trumps that but it isn’t a straight ‘divorced people get more’ either. That decision should be analyzed on a case by case basis.

4 Likes
11

I just divided what I paid to AHV in my whole life by the monthly pension and then by 13 (because soon there will be 13 monthly payments). That gives me the number of years until I get even, until I get back what I paid in. Then I added the lower pension number to 63 and the higher pension number to 65. The result was 74.5 for taking the pension with 63 and 74.94 for taking the pension with 65.

That means when taking it now I will get all my money back (without interest) when I reach 74 and a half years. When taking it with 65 I will get it all back almost half a year later. Add to that the risk of dying “young” and there you go.

Of course that numbers don’t take into consideration inflation, interest and so on. Started paying into that 48 years ago. The first pillar is about the young working for the old, not about saving for oneself. The second should be for that…

I voted no for the 13th AHV because it was and still is not clear who will pay for it and how. But now that it is voted, OK, why not, thank you.

5 Likes
12

The point that only one of both may work is important too. If you don’t work you will pay social security based on your assets. But if you are married and the spouse works you don’t pay but are still insured. I think that tops the 33% loss you have later.

Now if both work more or less the same time they pay a lot more tax, a lot more social security and still get 33% less.

1 Like
13

Which is a pity, because I feel you may have some super interesting things to share - like the details about Costa Rica. So please, share a bit more than money-related stuff, if you feel it might be of interest for others :pray:.

4 Likes
14

Of course I have tons of stories from and about Costa Rica. Love this country…

When deciding to live there I studied all the requirements. My Spanish is actually better than my English. On many web pages corruption was mentioned. I wanted to avoid corruption. I think I am the only European immigrant in Costa Rica that did not use corruption to get my permission… and it did not work.

The usual way is to take a immigration lawyer who pays off the needed people to “grease the screws”. I did everything by myself. That means days and days at different places, police, immigration office, and so on. There always were very very big queues and of course they sold food and drinks everywhere.

Once you enter the room, the whole room is full with seats. You take the seat at the back of a corner once it gets unoccupied. Then the complete room moves one seat when one gets free, until you reach the last seat.

The officers are not allowed to collect money, not in cash, not in credit card. So you have to leave the office and go to a bank to pay any fee, then come back and queue again.

I was seated with a family from Nicaragua. The man told me that Costa Rica is a paradise, he never imagined that he could make that much money. How much I asked. $10 every day he said. I said that I don’t think that is much and he said that is what he made in Nicaragua for the whole week, working 7 days…

Once I got everything done they told me that it will take 3 months to get a decision, but gave me a temporary permit to stay in Costa Rica. It took 30 months to get the decision, my residency was denied for “financial reasons”. I did not care because by then I was already living back in Switzerland.

Unfortunately one could not get a drivers licence with that temporary permission and a foreign drivers license is only valid for 6 months. So I had to leave the country like 3 times in the two years I was there. I went once to Spain, once to Nicaragua and once to Panama.

The temporary permit however allowed us to visit all the national parks and pay only the residents price.

I provided all the papers proving that I fulfill all financial requirements, but after 30 months they decided that dividends were not accepted as proof of income. I should have opened an account that then would pay me back in monthly rates during two years. Or, I should have paid a lawyer who then would pay the immigration officers. But I’m glad I didn’t. Corruption is a cancer that has spread all over latin America and probably all over the world…

The experience helped me to know the country and it’s people. But it did cost a lot of time and was an uphill battle; probably next time I would use an immigration lawyer. But there will be no next time, as the 40% expat tax is in discussion or is already in place. I think you can stay now 6 months in Costa Rica without a visa anyhow. And then this period starts over as soon as you leave and come back, even if it is the same day.

13 Likes
15

Just came here to say: thank you for sharing.

1 Like
16

I think it was a financial good decision to take early social security at the first moment this is possible. The deduction is 6.8% per year for a lifetime, but… I have to take out less from my broker account because some of my spending is covered by the AHV.

And my medium return in the stock market is way higher than 6.8%, so I end up actually with more money than I would when waiting for the normal retirement age. And the additional money is mainly tax free, except dividends.

17

A long-term return way higher than 6.8% in CHF… and it’d have to be quite low-risk since that’s what the AHV payments are.
I understand your investment experience spans 40 years, but still, aren’t you maybe “blinded” or at least “geblendet” by the last glorious 10-15y of the market?
Anyhow, ould you recommend for others approaching 60 in 2025? Although my friend will only be approaching his 60s in the 2030s.

Could one maybe say (roughly), take out your AHV early if there’s a long bear market, then you don’t have to sell low your investments to finance life. Postpone AHV if it’s a bull market (crazy overvalued bubble like now :wink:) and future returns are expected to be lower than long-term average?

So you took it in 2021 at 60.
Did you consider the future average market return expectations at the time, or or only consider your “own expected returns”, i.e. >>6.8%?

Err, what now? Do.you mean “AHV age”, that kind of way of saying “65”.

2 Likes
18

The point that I don’t need the AHV money is important. Therefore I can use a high-risk high-performance strategy as I don’t need to change my lifestyle for losing it.

I can not recommend anything, it depends on the individual situation. If you have much assets and are not married or if your spouse does not work, retiring early from AHV means you will have to pay AHV base on your assets until you reach 65. You may actually lose money.

I would not make the decision based on the state of the stock market. I have seen many bear markets and many bull markets. It is not important what will happen, it is important to know what to do when anything happens…

I took out 2nd and 3rd pillar when I was 51 by moving out of Europe. First pillar I take out this year at 63, which is the earliest one can take it out.

I made the decision after my first post in this thread. So yes, I meant that I reached my financial goals planned for 65 already now.

1 Like
19

Haha classic, Greece was like that all up to mid 2000s, in order to pay for anything in the public sector you needed to go to your local tax office and buy these stamps which said 50EUR, 10EUR, 0.5EUR etc on them and then physically stick them on the application for whatever you were asking for to show payment. Now this is done away with, but to pay for anything in the public sector you NEED a Greek bank account and phone number, which is annoying for us expats.

Nice story, congrats on your success!

20

Yeah, Spain had those stamps too. Even for getting my Spanish diploma I had to go to a tobacco shop (estanco) to buy stamps; they were only sold there.

I suppose it is to fight corruption, but doesn’t help much. As said, the lawyers pay the officers off-site. And I had no lawyer. And I did have to wait 30 months just to get my application denied…

21

Not to highjack your thread, I think it does limit corruption to an extent. I wonder if Costa Rica had the situation Greece had in the 50s to 90s, even early 2000s: outside public offices, town halls, banks, other relevant places where the public interacts with the state there were hawkers who would go stand in the queues for other people (for a fee), knew (=were paying) an employee inside so could get your job done faster, or who were selling (yes, selling) the numbers to be called. Imagine my annoyance the first time I had to go to a public office, I get a number from the machine, say it’s 53 and the number on the screen is 22…then a shady character approaches and says “Hey, bud, I have 25, do you want it?”. Effing third world!

Edit: thankfully a lot of these are now eliminated, the capital controls of 2015 and COVID catalysed the GR public sector becoming a lot more digital, still a looooong way to go, but moving towards the right direction.

1 Like