Just created my account after lurking for a while. This seems like a cool community; thank you to everyone who has contributed. I’ve particularly valued the deep dives into IBKR tax stuff and the various DA-1 things discussed here.
To introduce myself: I am currently FIREd and approaching 60. We are a Zurich-based family with young adults who are just about leaving the nest or who already have left.
Our Current Baseline:
Annual Spend: ~CHF 140k (living comfortably but mindfully).
Taxes: ~CHF 65k (the reality of Zurich city life).
No occupied or direct real estate; I prefer the liquidity of the markets and REITs.
Currently, we live almost entirely off the portfolio. We haven’t touched AHV yet, and my Pillar 2 is still pending. My plan is to take the capital payout and fold it into our income-generating assets, which should theoretically boost our passive cash flow by about 50%.
To be honest, we already cover our needs comfortably, so the extra “buffer” will likely just be allocated to higher-quality travel or perhaps a bit more “Luxus” in our retirement style.
I’m joining to exchange views with others in the “Post-FIRE” phase. Specifically, I’m interested in how you manage sequence of returns risk in a Swiss context and how you’ve structured your drawdowns once the 2nd and 3rd pillars come into play.
You´re stating that you have to pay 65k CHF on taxes - how come? As you have mentioned that Pillar 2 is pending, and AHV should only be a fraction, I wonder what´s missing in your text ( or my thought process )?
Ok, then I guess the portfolio has some bigger dividend payments, and the side job also has some part of it. I checked with the following numbers. 4.2m CHF in portfolio, with no dividend payments (which might be unrealistic, depending on the stocks/ETFs), married, Zürich: 18k CHF taxes.
Have you considered less-dividend-yield stocks (aka value) and more focus on capital appreciation (aka growth). For sufficient living-cash then need to sell some stocks, but taxwise more “optimal”?
Anyway not recommending it, it’s more meant as a question and your opinion to such a portfolio for a FIRE’d person.
Honestly, if you want dividends and tax benefits I’d consider Swiss direct REITs. Their expected return is probably a bit lower than “just equities”, but when FIREd, especially considering the extra AHV on wealth (which is on taxable wealth AFAIU, so REITs counting for ~nothing helps there), it can be a pretty decent deal IMO.
That said, I saw you already named REITs in the original post, so this probably didn’t need to be said.
I feel TOTALLY like you, but then I was told that dividend yield is all but guaranteed and since then I think I’ll sleep bad also if I were to rely on dividends alone.
No one was interested in improving it or commenting the utility of it so I gave up. I’m not that good in those things and Cubanpete left.
Edit: I might have deleted the post after 0 comments.
I have also just been lurking, I am more or less done with accumulating, and I did it mostly with Berkshire Hathaway (80%) since it’s kinda like a ETF, I pay zero tax in CH because no dividends, and the value investing strategy of the company. I might shift it more towards VT etc. in the future since there is always this cluster risk with just one big stock…
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