Current proposal might not effect FIRE people if they fall in bucket you mentioned and they can still stagger their 3a withdrawals
However, I personally think, it would affect everyone because I believe following would also come soon . This is not said in current proposal but I think it would come
Speculation -: withdrawals from Pension assets would always be considered accumulative which means if in Yr 1 you withdraw 200K and 5 years later 1,000,000 CHF then the second tranche will have higher tax because the total withdrawal would always be accounted for.
Thatâs not what I said, knowing a handful of people who are 40 +/-5, push >=1mn in their brokerage accounts and are looking for early retirement, they do have fully-funded 3a/ISAs and most definitely decent chunks in their employer pensions. What I said was they donât consider these assets particularly interesting or to be relied upon, possibly because they are illiquid and out of reach for many years.
A friend fitting this profile has a 3a with a bank, earning 1% year. I asked how they missed putting it into an investment account and the response was âWell, I wonât see this money for ages anyway, I just put it there for the tax creditâ. For me itâs still puzzling because itâs potentially serious money left on the table, potential for tens of thousands of opportunity costs.
Of course itâs still anecdotal, over glasses of beer so to speak!
Edit to respond: it could well be substantial, back of the envelope exercise would put my example having ~350k in their 2nd pillar and ~150k in their 3a, but for the purposes of early retirement in a country costing 3-4x less than CH they just donât consider it. If one can live very decently with 30k/year, like one can in parts of the Balkans, Eastern Europe, or even goat villages in Greece then the 350k in a 2nd pillar seems very far away to really care/worry about! Letâs not forget that for EU people the second pillar remains illiquid until 59 years of age? Just remembered another person I know, very high earner, ZH IT (surprise?) and financially-literate. They donât even have a 3a, reasoning being for them the lack of liquidity outweighs the tax credit.
Edit 2: more broadly food for thought, maybe I need to read up on older threads on it, perhaps itâs interesting to examine the scenarios where maxing or even having a 3a isnât that good of a deal.
⊠or into the 2nd pillar if there is a chance/ risk of capital withdrawal later.
Is it just me or is the political message devastating. People were forced/ lured into contributing to a nest egg beyond AHV, with nice conversion rates for the 2nd pillar, low withdrawal taxes for capital, and tax deductions at the point of contributing. Now the resulting pot of funds seems too juicy for politics to ignore, so those same people are suddenly called ârichâ to justify doubling, tripling, or quadrupling taxation when those âtrappedâ funds are withdrawn?
/rant mode
A little early in the game, difficult to see such break of good faith is going to make it into law without attracting a referendum, and the wrath of the 3rd pillar industry though.
Odd also the idea to set taxation on capital that may have built over many decades so heavily based on income of a single year. If the calculator linked earlier is correct, a 1m withdrawal currently attracts 23k of federal taxes, tomorrow it will attract between 8k and 93k based on a single year of income!
Likely avoidance strategies and incentive settings -
if your income is high, and you can, withdraw before the law (assuming it is a law) takes effect (2027?)
Move to withdraw capital in years when your income is low
Avoid contributing to 2nd or 3rd pillier to the extent you can
Move to take more of your capital in pension form (where however lowered conversion rates and income taxation wait for you)
Withdraw once you left CH from a country with the âright typeâ of DTT
Obviously, Iâm against this increase in tax . I think the risk of a referendum is pretty high.
In any case, i donât understand the logic to use the income of a specific year to calculate a tax on something you have accumulated during decades.
Also using 5% is a bit of a joke, if a retire invests like a pension fund, the yearly return will be lower than that.
Donât worry, the current draft will never be implemented. Reason beeing is that it discriminates retirees born in a later monh of the year. If implemented, everyone that wanted to withdraw cash (at keastvin part)!would need to retire in January. The scary thing is not the current draft but the lack of professionalismn by the current federal administration. Looks like no-one spotted this flaw yet.
Lets wait for the final law and then decide. But highly likely, I seill stop contributing to 3a. Not because of the new law but because of a loss of trust in our government and their proficiency.
I find the direction of the federal council increasingly concerning. The increase in value-added tax (VAT), the reduction of the exemption threshold from CHF 300 to 150, and now the increase in taxes for 3a and pension funds.
Switzerland slowly becoming more socialist and the own responsibilities for personal finances and saving becoming obsolet
Itâs hyperbole, I am not saying they are about to forget hundreds of thousands gathered in the 2nd pillar, just saying itâs far enough for a person gearing for real FIRE (not at 55 but at 40) not to rely on it.
I have yet to find the actual calculation formula.
Does anyone have a link, or source? so far, i only found secondary literature providing qualitative indications.
in order to make up my mind, i need hard numbers^^
I consider delaying my monthly 3a contributions until i found out more
Durch das Lesen und die Teilnahme an diesem Forum bestÀtigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
