Retirement Orchestration

Hi there

There are lots of small puzzle pieces on retirement I am starting to think about. I read several posts here related to withdrawal of 2nd/3rd pillars but still the “orchestration” of the many steps is somewhat unclear.

Let’s say I plan on retiring at 60 years in a country outside EU/EFTA without income taxes (meaning I will fully leave Switzerland) and I am trying to find out what would be the best process (mainly regarding the 2nd pillar). I plan on cashing out the whole 2nd pillar.

  1. The first option is to just announce to my company/Pensionskasse that I quit my job. My 2nd pillar will then be transferred to a vested benefits account in Schwyz for instance. Then I leave Switzerland. Later I can cash out to a Swiss bank account (paying the Schwyz taxes).

  2. As an alternative I could announce to my company/Pensionskasse that I “retire early”. Probably at that stage I have to tell them what my plans are for the 2nd pillar withdrawal. I want to cash out all so the Bern taxes on capital withdrawal apply. Not sure, but I might have an option to remain somehow in the Pensionskasse until regular 65 (getting a Rente then at 65)!? Not something I initially thought of but is somehow an additional option.

→ Do these options make sense to you? Option #1 seems cheaper!?

Thanks
P.

Yes, both options are possible. I guess that for #1, you need to find the local regulations of your new country of residence and see how they will tax that money.
For #2, you cannot stay in the pension fund if you don’t work (well, unless you get fired, and even then, the conditions are not great)

Hi there

Thanks for answering.

Regarding #2:

  • As you correctly said quitting my job won’t work. I would need to get fired after 58 in order to remain in the pension fund (and get the Rente). Anyway that’s not my plan.
  • If I tell the pension fund that I am leaving Switzerland and want to cash out, the pension fund has to deduct a withholding tax.

So probably option #1 is better.

Cheers,
P.

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