Hi all. I thought that I’d share my situation. Hopefully wiser heads here on the forum will have thoughts or suggestions that can be helpful for me.
My wife and I, now in our 40s, moved to Switzerland a few years ago. We don’t have children. We’re currently on B permits, but can switch to C permits soon. We’re in the German-speaking part of the country at the moment. For now we’re here as we are earning very well (saving several hundred thousand per year), but at some point we’d like to move elsewhere. We’re not quite sure where, so for now (and especially until we have the C permits) we’re staying where we are, but we’re considering that maybe the culture in Ticino would be better. If not Ticino, then we would probably move to another country, probably in Europe.
Our current networth and how it’s invested:
Total NW: 3.5M
Riskier (68% total):
53% VT
4% VOO (I’m shifting this gradually to VT)
4% DRPF (residential)
6% Foreign pension account invested in equities
1% Pillar 3 pension account invested in equities
Safer (32% total):
13% CHF cash
11% CHCORP (Swiss corporate bonds)
8% Pillar 2 pension
We’re renting and have overall expenses of about 100k per year (accommodation 40%, healthcare 11%, vacations 10%, …). I expect that if we were to stop working then we’d also need to start paying AHV contributions of about 20k/year as well or something like that. I figure that with our current savings and expenses we could probably retire already now, barely. Expenses would likely be a little bit lower in Ticino, and quite a bit lower outside Switzerland, so in those places it’d be a bit safer.
In any case, the main thing we’re uncertain about at the moment is clearly where to go, so that’s what we need to figure out. Until then we’re earning well enough so we aren’t in any rush.
Any observations or thoughts that you may have would be appreciated.
With 23k per year in healthcare for a couple without children, there is another underlying issue going on. You may not have agency regarding it but it may affect how you view your future prospects.
Regarding finding a friendly area, I’d recommend taking recurring vacations in a place you expect to like. With time, some kind of relationship should develop with the locals. It should help assess if you’d feel welcome and happy there or not. There are some nice places in Western Switzerland too but I guess language would be the barrier?
I fully second that. Additionally, look at infrastructure in such new places, especially medical and other aids that help you move around once might need assistance or a wheelchair. These topics tend to get overlooked in Switzerland since they work really well and there’s no need for it in early age.
Re the healthcare expenses - I should’ve noticed that actually. We had some bad luck resulting in really high dental expenses, but that was very much out of the ordinary. Normally this would be lower. I’ve edited the original post to better reflect a more average year than last year specifically.
Re AHV contributions – thank you! I had calculated this before and got a ~20k number, but you’re right that that seems to have been way off. It’s great to have this corrected.
In your situation and with your savings rate, working a few more years can make a material difference to retirement levels. I realize that’s a trap for some as well and you may want to choose life first, but still - options could also be to ‘coast’ more and wait for a package.
Setting that aside, reflecting on what you wrotw i’d consider using the voluntary second pillar contributions a LOT more.
Also people comme on, getting all offended and acting as as if the zürichers were notorious for acting open and warm appearing disagreeable is their copyrighted brand image, ask any Zürich person
Look for a climate that both you tolerate well, local cuisine you like, reasonably good personal security and healthcare system and, preferably, a language you speak or’d be willing to learn.
I would just continue working for another couple of years, top up the 2nd pillar to the max (with your salaries and the current balance, you can probably put in a lot), pay basically no/very low income tax, reduce wealth tax. Then move all 2nd pillar into a vested benefit accounts (invested in market) and let it grow untaxed. And then indeed, plan the rest depending on where you want to move. There may be excellent opportunities to save, on fortune tax, on vested benefit accounts withdrawal, but you need to understand how your target canton / country operates in all related aspects.
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