Nowadays there are more choices open to you than ever before when it comes to your retirement. This means there are more things you need to consider and have a plan for, like how to manage your finances to provide the income you’ll need to live on, how you’ll transition into full retirement and what lifestyle you want to enjoy in your later years.
One of the biggest mistakes people can make is not saving enough for retirement. Our top 10 considerations in retirement are aimed at ensuring you have the ability to take control of your financial future. Knowing your destination helps you plan the best route to get there.
Make a plan!
When do you want to retire?
Are there any ways you can reduce your tax liability?
Can you continue working?
Do you need to downsize?
Have you planned for your long-term care needs?
How much will you need to fund essential and non-essential spending in retirement?
How much are you saving?
When can you access your state benefits and how much will you receive?
Have you taken the opportunity to receive trusted financial advice?
Planning is vital, and there is never a better time than the present. Work out what you spend each year now, when do you want to retire, how much of your spending is essential and how much is non-essential, and what lifestyle you wish to have in retirement. As a rule of thumb, it is often the case that people spend more in the earlier years of their retirement, and their spending reduces over time. It is important to take as many relevant factors as you can into account.
In Switzerland, the pension system is split into 3 pillars. The 1st pillar is your state pension, the 2nd pillar is your occupational (workplace) pension, whilst the 3rd pillar is your private pension(s). The purpose of the Pillar 1 state pension is to provide you with a source of revenue to cover your basic financial needs.
Contributions are deducted from your gross salary as a percentage and are compulsory until you retire. Should you remain in Switzerland, you will receive the Pillar 1 pension as an annuity and does not have a transfer value (therefore, cannot be taken as a lump-sum). The amount you are paid is dependent mainly upon your years contributed, earnings, and the total value in your account. For the maximum allowance, you can contribute for 44 years.
We’re all leading busy lives and so it’s understandable if retirement plans have been placed on the back burner. If you are keen to revisit your plans and get them back on track so you can relax and fully enjoy your retirement years, there is never a better time than today.
Please note that all content within this article has been prepared for information purposes only. This article does not constitute financial, legal or tax advice.