New in Zurich - Looking for advice :)

Hello everyone,

I’ve been reading this forum recently and thought I could introduce myself as well as ask a couple of questions.

I am 23yo, from the EU, fresh graduate in the applied mathematics field. I will come to Zurich by the end of the summer to start a job there. Compared to most people on this forum, I am for from being frugal, and do not intend to become very frugal, as most of my expenses bring me happiness. However, I do enjoy optimizing things as much as possible, and with swiss salaries, it seems possible to save a lot while spending a lot. That brings me to my questions:

Where to live ? This question is mainly motivated by tax simulations I ran on comparis.ch. For context, my salary will be ~CHF160.000 (incl. Bonus) + ~USD30.000 RSU (I don’t know how these are taxed). Comparis says that I would save 16K by living in Freienbach, and 12K by living in Zug (I included RSUs as income). These numbers are huge enough to think about it.

The office of my company is in the center of Zurich (near a train station), and I’ll have to work from there 2/3 days a week. I am more of an outdoor person than a city person, and Zug even has a rugby club that I could join. However, there is a cost associated with the commute (3K a year for unlimited transports?), and inconvenience as well (for example, are trains working at night during week-ends ?). The time of the commute seems okay for me (I had a similar one daily in London and it did not bother me), and I am not a freelancer so the additional money I could earn if I wasn’t commuting is 0 :slight_smile:

Zurich:

  • bike/walk to commute.
  • near most activities for the evening / WEs.
  • rent are not cheaper.
  • taxes are a lot higher.

Zug:

  • bike commute possible 1/2 a week for exercise (I love road cycling).
  • taxes are cheaper.
  • still a decent size, so I expect to find things to do outside of work there.
  • train to go to Zurich during the WE / when the weather is bad.
  • far from most people; obstacle for socializing in the evening / WE…?

Freienbach:

  • Even more tax savings.
  • route to the office is completely flat, so I could bike there at least twice a week assuming a decent weather.
  • Very small, not much to do?
  • Same commuting problems as Zug.

I would appreciate any thoughts on the subject, as I am probably missing a lot of things!
I am not really considering Thalwil / Kilchberg as the tax savings are a lot smaller, but a commute is still necessary to go to the center.

Investments: I have no financial education whatsoever and I am a bit lost when it comes to investing. Right now I have approximately EUR100K from various internships, divided as follow:

  • 50K cash
  • 30K VT
  • 15K QQQ
  • 5K european ETFs
    And I don’t really know how to allocate it properly. Any good up-to-date resource on the subject?
    To give you an idea on my level of knowledge: I am clueless regarding what to do to hedge myself against inflation (are stocks enough?)…

2nd Pillar: Should I maximise or minimize my pillar2 contributions, given that I will most likely leave switzerland in the next 10 years and won’t buy a house here.

Learning german: I have some basis but would like to pick it up again, quite intensively. I think that it would be a good opportunity to meet people as well. Any recommendation regarding a school for german with in-person classes ? University maybe ? A huge plus if there are other young-ish people :slight_smile:

Thanks for reading!! Looking forward to coming to Zurich

3 Likes

First thing that I would clarify with HR is what kind of work permit you are getting and if it is possible (legally or practically) to change your canton of residence.

1 Like

It is not a problem luckily :slight_smile:

You might also get a cheap WG room, that you can leave easily, for a start and have a look around once you are here. You will be taxed according to your residence at the end of the year. And if you are only 3-4 months here, it won’t make much difference anyway. Probably it will be source income tax for you.

1 Like

Oh right taxes are calculated for a calendar year, I am still unfamiliar with the matter :sweat_smile:
Then it wouldn’t make a lot of difference for 2021 you’re right, thanks for the idea!!

In your age - clearly minimize. I am not sure if 3a is also good for you. Probably yes considering your salary, but not in 2021.

1 Like

As you approach the top bracket, might still make some sense (esp. if someone is uncomfortable with the equity volatility), the tax savings are big (and OP mentioned leaving in 10y so they’d get it back with a much lower tax in most cases).

Don’t underestimate the social component. If you’re used to large cities (e.g. London), you might not realize how small Zurich is (and therefore how much smaller the other cities are).

You mention you like outdoor things, so might still be fine, but it might definitely add to the challenge :slight_smile:

FWIW assuming you’re joining the company that’s easy to guess given the info you dropped, (office at HB/RSU, 3 day in office) you’ll be able to save way more through career progression than optimizing your taxes esp. as a new grad.

You can always optimize after one or two promotions, if you really want to, but finding a good balance for your life where you’re happy at work and outside will have a much bigger impact.

2 Likes

+1 to the WG (or just any cheap flat ) in Zurich for a start.
You need to see everything before you decide.

There are some interesting places very near the city of zurich. A nice possibility is to live in a place where you can bike to a Station and then take the S-bahn for an easy ride to the city center.

…and welcome to the forum and to Switzerland.

2 Likes

Why not simplify and go all VT as a start? QQQ doesn’t make a lot of sense if your employer is one of the top component, and can even cause compliance trouble. (with 30k RSU per year you already have more exposure through RSU than QQQ given how tech correlates).

3 Likes

Depends if you mean Zug City or any of the smaller towns. Zug and Rotkreuz for example are very well connected and you’ll have 1-2 trains going either to Lucerne or Zurich every hour including Night trains that run until 03:30 or so (and then service starting again at around 5:30). So public transport connectivity along the main routes is not really a problem.

Have a look at this:

You might get an idea on where to live. If you want a mix of nature/city you can live on the outskirts of Zurich. I think there are 2-3 places in Zurich that will allow you to live 5min from nature and city centre (with a train station).

1 Like

I would go for Freienbach or Zug as I would never voluntarily present 12-16K to the government per year (not even once). I have lived in all three places and from a nature perspective I liked Zug a bit more and there is also much more to do than in Freienbach. Also, in Zug there is quite a large international community (compared to Freienbach) because many trading / finance companies are located there. Of course, the international community is bigger in Zurich and there is much more to do, but for my taste Zurich is way too overcrowded especially on sunny weekends, and too expensive in every aspect. Health insurance is also much cheaper in Freienbach and Zug, than Zurich (at least 1000+ CHF savings per person per year).

Welcome to the forum. Impressive starter package you got and great analysis of tax/housing/commute matters! At your age, I would prioritize enjoying life and social aspects. Optimizing everything brings limited joy (at least in my opinion). Zurich seems like a very good choice for a young expat professional. After 1-2 years you will have a much better idea of where you need to live.

There are not many money mistakes you can make that cannot be undone the following year. Don’t sign up for any long-term obligations (e.g. 5y rental contracts, 40y saving & life insurance schemes, marriage) and don’t hesitate to pay for quality services. Ask back here when in doubt about imminent decisions, the forum members are quite clever :smiley:

2 Likes

On the other side rentalrates for homes are higher in places with lower income tax.
People from abroad working in Switzerland have tax deducted directly from their income (tax at source).
Take a look here
https://www.ch.ch/en/tax-source/

In the suburbs or agglomeration yes. But Zurich itself is at least as expensive, probably even more expensive in terms of rental rates than Freienbach or Zug (here it also depends where exactly), probably it also depends on the district or if you are able to get one of the subsidised flats but with that salary that’s going to be difficult I suppose :slight_smile:

I agree.

Zug has very few expat/foreigners’ activities. Freienbach is basically a remote suburb with nothing to offer in that respect at all. Both aren’t necessarily cheaper in terms of rent either.

Both are actually fine places to live when you’re settled and have your own social circle (especially if they’re also in that area), but not if you’re young, new to the country and working in Zürich.

Just get yourself a small place or nice WG in Zürich for at least the first year or so to “land” properly. The 1,000 CHF a month you’ll “save” on taxes are well worth it.

2 Likes

That makes sense. Thanks for the suggestion :slight_smile:
I am a bit afraid of the currency risk though, if all of my savings are in USD whereas I live with CHF. Are there good solutions for this ?

Most messages here seem to agree, and it was also my initial gut feeling. I’m therefore looking for the nicest WG I can find in zrh, it seems like the best solution to “land” and create a social circle :slight_smile:

Hmm that seems not ideal, even coming from the EU with a salary over 120k ?

Your savings are in equity, not in USD. Currency risk is mostly irrelevant there (check the archives there are many threads around that).

edit:

Yeah, doesn’t matter. With income > 120k you’ll be filing and paying your actual taxes. Btw just so you’re not surprised, if you live in Zurich city you’ll be under paying at source, so do expect to pay the difference when your tax bill arrives (iirc on the order of 5-10k for your kind of salary, also note that tax might take easily 1-2 years to be processed when you’re new).

2 Likes
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, vous confirmez avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/