You’re talking about contributions. The 4702 I mentioned is not a contribution. It’s the minimal yearly salary added to your total income sum if you have no income. I had it for a few years when I was a student. Also listed in the AHV extract.
https://www.akow.ch/produkte/ahv/beitragspflicht/nichterwerbstaetige/
But someone with 2 million in taxable net worth will pay 4250 chf per year that counts as 41500 chf income for the final rent calculation.
The 480 or so chf are for when you have less than 300’000 in taxable net worth and it counts as 4700 chf of income.
Personally, I wouldn’t recommend classifying politically-vulnerable insurance schemes (aka AHV/ALV) as assets. Politically-controlled insurance schemes like AHV may diversify your portfolio, but they can change at any time. It is important to note that the AHV is a social insurance scheme and not a fund. As I see it, I have to participate whether I like it or not. IF I actually get that pension, it will be a nice extra, but I certainly don’t count on it. I simply can’t accurately predict what may happen politically and economically in the next 30 years.
The exception is, of course, if you are from a country which does not have a social security agreement with Switzerland, in which case you can cash out your AHV benefits early as a lump sum by making a quick move to your homeland.
Occupational pension funds are a different matter, because it is relatively easy to cash out your benefits. Personally, I count occupational pension fund benefits as assets.
Heyall,
i am sorry not to have the time to dig into it right now, but i was always convinced that the AHV rent is solely based on the number of years that you contribute.
when you dont work, a yearly payment of 440 CHF makes the year count towards your pension (that’s what expats should always do when they come to switzerland for the previous 5 years). The income-dependent rent is a thing of billar 2, no? am i utterly wrong here?
No it’s not. AHV is a combination of years and avg. salary.
As @Cortana correctly says, AHV is a combination of years and average salary.
If you have paid the minimum AHV amount for a total of 44 years until your retirement at 64/65, then you are eligible for a full pension. “Full” in this sense means that you get between the minimum and the maximum pension, depending on your average salary over those 44 years. If your average gross salary was 85’320 CHF (per year, i.e. a total of ca 3,7 Mio CHF over all the 44 years), then you get the maximum pension of 2370 CHF/month. With a lower average income, the pension gets less, as well, until there is a minimal amount of 1185 CHF/month.
So if you have at least 44 years of contribution, your AHV will be somewhere between 1185 and 2370 CHF per month.
If you have less than 43 years of contribution, your pension will be cut by 2.3% for every year missing.
This is, of course, the state of the current year. The further away you are from 65, the less I would take the exact numbers in your calculations. But I can promise you that AHV will be around in 30 years. It might be like 30% less, but there definitely will be some pension, since a majority of the population is counting on it. The fire folks on reddit have the same discussion regarding Social Security in the US and most of them expect like 60-70 of today SS level as the minimum.
We are talking about Switzerland. One of the most secure and most stable countries in the world.
I fully expect to get the AHV rent. The only question is how much.
The AHV (as well as Pillar 2) faces the same problem as every social security system of developed countries: old Promises of governments that are usually unsustainably high, unfavourable demographic developments and the lack of political will to reform those systems (announcing pension cuts to the people = political suicide). The star of the swiss system is currently fading.
Imbalances in AHV you can always compensate by raising taxes (VAT). Imbalances in the property-driven Pillar 2 of currently ~25% (influx vs. payments) are becoming a very nasty thing to deal with 
Just looked into this pension stats by the *Melbourne Mercer Global Pension Index (MMGPI). Number one ranked are the Netherlands, where the pension age is being gradually pushed back by the Dutch government. They have a site, where you can type in your age and see when you are eligible for a pension. For me it would be 68…
Maybe this is unstoppable process, but would love to see other alternatives than work until close to 70. Especially in an environment were you are technically “old” over 45 and face challenges in a hiring process. A friend of mine in Madrid was in an interview in a big Spanish Bank and they told him that they don’t hire employees over 45 of age for normal banking jobs. I do see similar activities here in Switzerland too.
Complete joke. You have to work till 65+ but will barely find a job after turning 50.
Would I try to hire somebody +50, I would need to jump over many hurdles to get this done.
An extremely simplified example:
assume you (the average citizen) live until 80
assume you work (=generate income) during 45 years
assume your expenses are constant over 80 years
we ignore inflation, interest, income from spendings, taxes, social welfare, pensions.
Result: you need to save 43% of your income during working period to pay off your non-working lifetime. If you save 20% (closer to the reality of average citizen), you must work 64 out of 80 years to cover expenses.
Now not all assumptions are conservative, but this is the simplistic approach of the “law of conversation of money”
Alternatives include: make peple pay only a fractin of their lifetime expenses, by letting companies pay the rest. Or you create money, but this wont be sustainable for the masses.
As you write correctly, we old are getting older and we have to find solutions to solve that. Below you see the stats about live expectancy for women and men in the past 38 years in Switzerland (Bundesamt für Statistik) and it shows that in average we are getting older 2 month every year. Do assume that to push up the retirement age in small steps (3 months every year), will be probably the way we have to go. But for me I do not count on the AHV money for my retirement calculation someday, but only for the PK and personal savings.
Stats:
I wish I had your confidence. Maybe my having lived in 2 countries in which the government/social security pension systems collapsed has impacted my fairness of judgement. Government/social security pensions provide a unique tool with which to speculate on politcial and economic changes. But I wouldn’t recommend anyone counting on these if their retirement is more than 20 years away. That’s just my opinion.
The debate reminds us all of the importance of having competent and independent advice on your approach to retirement: e.g. pension Vs capital withdraw. for those who do not trust banks for that, is VermögensZentrum reliable and competent enough? any direct experience welcome - thank you
If you get retired with 50 you’ll not get 1’600 AHV with 65… Did you calculate it right? For the full AHV rent you need to work 44 years and each year with a average income of about 85K per year. So if you get retired with 50 you do not have 44 years payend into the AHV (15 years missing). This missing years will be cuted from your rent (will be much lower with 65).
With 50 you can not withdraw your pension - only when you leave the Swiss country into a NON EU/EFTA Country an live there.
Based on that i guess you will have 2 Millions when you are 50? (or 65)?
You will have to live with your saved money from 50 until 65. Only when your are 65 you’ll get the AVH rent. Some pensions have the possibility to retire earlyer than 65 (with cutting of the rent). Based on your montly need of money (example if you need 5’000 CHF per month) you need 60K per year x 15 years = 900’000 CHF until 65.
Be careful - you have to pay the AHV from 50 to 65 in order that you do have the full years of 44 years - but you do not get the full rent because you do not have an active income of at least 85’000 per year (paying only to fill up the 44 years in total).
Pension you can only pay out the “over-obligatory” amount - the legal amount you can not pay out anmyore (unless you move to a “NON”-EU/EFTA country).
May it looks like you have some issues in the rules of “AHV” and the “Pension”-rules which you have to solve first and make clear how your situation will looks like?
You still need to pay AHV if you don‘t have a job. Then you‘ll pay it based on your wealth. Therefore there‘s not necessarily a big reduction on AHV.
Nope… for the “full AHV-rental amount” you need to pay 44 years in averadge 85’000 income (see governance documents on AHV). When you are 50 and not work anymore - you can pay the “minimum”-amount to the AVH (some 100 francs per year i guess 200/300 p.a.) to make sure you do not loose the “years”. But the calculation of full rent amount is based on what you payed AHV over 44 years - you’ll get only the full rent (highes yount) if you payed AHV rent with a averadge income over 44 years of 85’000.
So a lot of people meaning to “close” the year gap only by buying the “minimum” amount the get the full top AHV amount … but this is not true. Only a view % of all workers get the full amount (may 5% max). that mostly the “Top”-Worker who earns a lot more thant 85K over a long period of time (max. 30 until 65).
You are responding to a conversation which is more than 2 years old… beside this, did you read the entire thread ? @Cortana made a clear reference to skala30 which is not the full AHV rent. He also posted the link to the relevant document
Additional: