A lot of occupational pension funds are very conservative and have a low bond-like rate of return to ensure being able to pay out 5-6% pension income. Yet if you retire very early, you will likely be kicked out of the pension fund and never benefit form this 5-6% rate that you suffered the growth penalty for.
However, some newer providers such as VIAC offer high equity strategies for the non-mandatory portion of your pension.
As you reach your early retirement target, your pension pot might grow big enough that the opportunity cost of staying at work and missing out on the equity gains might be substantial.
So I was thinking what options might be available:
Stuff your pension as full as possible and then retire early. Move pension pot to high equity strategy to benefit from better returns. But how do you survive until you access your pension?
As per #1 but split your pension pots with 2 providers by mandatory and non-mandatory portion. Then get a job again and bring back only the mandatory portion into the new occupational scheme leaving your non-mandatory amounts with the VB account growing nicely
For the career paths that allow for it: become self-employed, work as a consultant and keep doing what you were doing as your job with your previous 2nd pillar savings in a vested benefits solution and increased maximal 3a contributions.
Another alternative is to earn a ton and join a company that offers, or convince your company to offer, the option of using “1e plans”. That’s for people earning more than CHF 132 300 and allows you to drive your own asset allocation with elective/above-obligatory BVG funds.
True, although options might still be a little limited and the part below 130k is still sub-optimal.
Say you earn a whopping 264’300 CHF. So half your pension contribution goes into the 1e. If the 1e offers a 40% equity option, then your overall pension is still only a meagre 20% equity and that’s with a massive salary!
you can setup the plan so that a lower percentage is saved in the classic pk below 132k and a higher percentage is saved in 1e. so total savings of salary are for example 20% of salary, 25% savings on 1e party and 15% on classic pk.
in 1e you select the asset allocation individually, with finpension you can go up to 80% stocks, 20% bonds.