# How much does the AVS/AI/APG costs/brings

Since the AVS is quite an important part of the retirement planning, I’m opening a thread just for it. I’m not sure in which section to put it, so don’t hesitate to move it

AVS tax:
It is mandatory to pay the AVS tax until the official retirement date(=65y). They will not remind you but come the retirement date they will ask the missing amounts + interest.
When retired before 65, you have to pay an amount which depends on the sum of your wealth + the income generated by insurances.

For instance if you have a fixed wealth of 2MChf, stop working at 50 and start to get an LPP of ~30KCHF/y at 60 you will have to pay:
50-60: 4 253chf / year
60-65: 6 098 chf / year

For couples, the wealth is split in two for the calculation. But if your spouse pays at least twice the minimum tax (=956 chf) you don’t have to pay it.

A table showing the amount to pay.

AVS income

It is possible to get the AVS income from 63y for an annual reduction of 13.6%, but you still have to pay the tax until 65.

If you have paid from 20 to 65y, you will get between 1175chf (for salaries below 14000) and 2350chf (for salaries above 84600) depending on the average annual salary of the whole period.

The max rent for a couple is lower = 3525 (this is why some people divorce at 65…)

When you have children, you can add 3x the minimal annual rent (=1175 x 3) on your calculated income for all years when one of your child was between 0 and 16 (so try to make children 16 years appart ).

For a mustachian, I suppose the 10-30 years pre-retirement would lower the average annual salary, meaning we probably cannot expect to be around the max. It would be interesting to have real life numbers

Source:
Retirement income: https://www.ahv-iv.ch/p/3.06.f
Increase of income due to children https://www.ahv-iv.ch/p/1.07.f

I want to dig more on what happens when we go live abroad. Apparently foreigner can get back the paid money (without interest).

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I want to dig more on what happens when we go live abroad. Apparently foreigner can get back the paid money (without interest). -> I would also be interested in more info

Switzerland allows you to have a status of “globetrotter” when living/traveling around the world. It means you live abroad, but you still pay your taxes and AVS in Switzerland (you don’t need to pay health insurance).

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I guess the main condition for AVS to be interesting is how long did you contribute before going into retirement.
I am not the most general case, but for someone like me, around 30 years old, who arrived in Switzerland last year and plan to retire in around 10 years, that is only ~10 years of contributions. So in the best case i would get 2350*10/45 (if the rent is proportional) = 522 CHF per month at retirement. And these will be in CHF of 2050, which will be worth a lot less than today’s CHF…

Plus, on the dark side, the first pillar is quite similar to french retirement system, which is VERY sensitive to demographics (i.e how many people are working vs how many are retired). Some people are even talking about a giant ponzi scheme on the national scale. With aging population, the french pension system is on its knees. I don’t see it ending well (currently the only solution they found out is to postpone legal retirement age to 67). Although the swiss first pillar system is not yet in such a bad condition, if the principles are the same I don’t see why in 35 years the problems wouldn’t be the same.

Regarding second pillar, once again it depends how long you contribute. In my case i calculated that i would have contributed ~80kCHF when i’ll be 40, and these 80kCHF will then compound until retirement age (at which rate, I don’t know. I just hope they are not invested in national bonds with negative rates). If i can get ~100k CHF when at 65, that’s nice and all but that is just a little bit more than 3 years of expenses. I wont’t go far with that if I live until 90 years.

Once again, it really depends on how much you contributed. For someone born and raised in Switzerland, who worked all his life in Switzerland and has now >20-25 years of contribution, of course that is something non-negligible!
But in my case, sorry but I prefer to not expect much of AVS…

EDIT : Sorry, I did not understand at the first time that it is not the amount of years you worked in Switzerland that counts, it is the amount of years during which you contributed to AVS. So in my case, there would be 10 years missing. However, if we take the average salary over the whole period, there won’t be much. So I guess I should expect 1175*35/45 = 913 CHF /month from the first pillar, which is already better.

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In your case it might make more sense to withdraw it when you leave the country and invest it yourself. If that’s possible.

I’ll look into the globetrotters status!

I have found info about leaving Switzerland and AVS.
If you quit Swtizerland and go in a country outside of EU/EFTA or which is not in the following list:
Australie Ex-Yougoslavie Saint-Marin
Chili Macédoine USA
Croatie Philippines

You are entitled to a refund of all cotisations paid (AVS is 8.4% of your net income) without interest.

German(page 14)

French (page 14)

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I love how they keep mentioning Croatia as being outside of EU (joined 2013).

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