FI(RE), pulling the trigger likely in 2020: ~50, male, married, one kid

Working for Hoolie in Zurich, Switzerland. Wife is slightly older, kid is slightly younger (mid-teenage).

Employer is piling on money, but fun factor at work has irreversibly become uncomfortably numb, I’m afraid. This is unlikely to change, even if I changed teams (hi Mr. RIP Sept 2019 …), so I plan to soon semi-retire (take a multi quarter break, then work part time opportunistically if possible / necessary) or “worst-case” remain unemployed. My wife plans to work (part-time) until ~2025.

Projected early 2020 asset figures:

Pillar 2 assets:

  • Mr: ~160k obligatorisch
  • Mr: ~560k überobligatorisch
  • Mrs: ~240k obligatorisch

Pillar 3a assets:

  • Total: ~220k

Marketable assets:

  • Total: ~3.2M
    • Liquidity: ~100k
    • ~3.1M:
      • ~40%: (slightly better return than) Money Market
      • Rest: Equity/Bonds: 60/40

Expenses without tax, buy-ins, etc: ~130k p.a.

Forward assumptions:

  • Non-cash asset return: 2%
  • Pillar 2 obligatorisch pension payout: 5% - 5.4%
  • Pillar 2 überogligatorisch pension payout: 3.6% - 4.8%
  • Pillar 2 Freizügigkeitskonto: 0.1% (return p.a.)
    • Pillar 2’s Freizügigkeitskonto can be split into 2 buckets for payout in two tax cycles.
  • Pillar 3a: ~0.3% (return p.a.)
  • Inflation for non-rent expenses: 1.5%
  • Rent inflation: 0.2%

Projected 2032 (Mr. is between 60 and 65) figures:

  • Marketable assets: ~2.7M
  • Total income: ~150k

Projected 2054 (Mr. is in mid 80s) figures:

  • Marketable assets: ~0.9M
  • Total income: ~120k

Numbers are only partially (tax) optimized for potential buy-ins into pillar 2 until retirement (but outcome change matters probably only really from an inheritance angle).

Further considerations:

  • Inflation assumptions both for housing (0.2%) and general expenses (1.5%) are low in historical context, but currently and for the forecastable future seem about adequate? Will readjust these numbers regularly.
  • Marketable asset return assumption (2%) is possibly on the low end – better safe than sorry?
  • Actual current expenses (housing, living) are ~120-130k, but forward calculations are run with 140k plus inflation, just to be on the safe side.
  • Expected pillar 2 pension payout percentages are mostly wet-thumb-in-the-air.
  • AHV numbers are based on currently available projections, including necessary buy-in if / when unemployed.
  • Projected pay for new job is between zero and (a possibly slightly pessimistic low assumption of) ~10k (p.a.) just for calculation purposes – I expect I’ll make more.
  • Freizügigkeitskonto returns are worst-case only; I plan to pay into a better return fund given my 10-15 year horizon until payout if I have to go down the road of unemployment.

Comments and questions are welcome though you might experience significant lag time in me responding.

10 Likes

I see that Hoolli is really a “place to be”, if you think about accumulating big net worth quickly ;). Congrats!

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Why not fully retire for few years in a Swiss hut in the mountains and then you can decide what to do forward? You also reduce massively the cost of living in there (so your net worth will grow by itself, doing nothing) and also be more relaxed in nature. You can choose a canton where you dont have to pay taxes on your “retirement” income…I think Graubunden has some nice numbers for that.
If you feel the need to work, you can start a business idea or take some interesting projects on upwork…
Well…just got my answer…just seen now your kid is mid-teenage…wont be easy to convince him to move :).

2 Likes

What company is this?

1 Like

Google…
hooli is an inside joke from one of the FI-bloggers…

Be careful with these assumptions. Do you intend to work until 58? (earliest retirement age). If not, you will not be eligible for pension annuities because you will leave your employer and therefore will have to transfer your pension capital on a (better 2) Freizügigkeitsstiftung.

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Yeah, good point @pwi – my worst case scenario is modeled with no further employment and having to park my pillar 2 money at a Freizügigkeitsstiftung, which I model with a return of 0.1% (see also my “forward assumptions” return section). Some are even at 0% these days. The only good news is that you can park your pillar 2 money into two different accounts at Freikügigkeitsstiftungen (to optimize for lower bracket tax at two different payout years).

I would hope to invest in a better vehicle than at a Freizügigkeitsstiftung, but this is what I base my worst case return scenario on for my pillar 2 savings.

2 Likes

Wow congrats mate!
I guess we need to have a lunch together this week or the following one to discuss “your next life” :slight_smile:

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