Early Retirement and AHV contributions

[Marius]

Hello,

regardless, if you decide to stop working (retire) before 65 in CH, and not fill in for unemployment benefits (RAV), you are still obliged to pay BVG/AHV. The difference is that, instead of charging your (non-existing) salary at source, the gov wants to charge your ENTIRE net worth - this can go up to ca. CHF 25'700 p.a. (roughly, an equivalent of a CHF400k salary)
I'd like to ask you guys - how do you manage it while being early retirees? Do you simply pay, or get self-employed, etc.?

Cheers,
Marius

 

[Baptiste Wicht]

Hi

I personally plan to simply pay it. I do not see good ways around it. Having a small job just above the threshold could be enough to save money.

Now, it's true that you can pay up to 25k, but for that, you would need a huge net worth (more than 8M CHF). If you have more than 8M CHF, you should not care about 25K per year.

I plan to retire with about 3M CHF. For that, I will pay about 7500 CHF per year. I will take this amount into account in my expenses in retirement and adapt my retirement planning.

 

[Marius]

Thanks for your comments - does the contribution double for early retired married couples (2x25k)?

 

[Baptiste Wicht]

I don't believe it does. Because if one of the spouses pays enough, the other spouse is exempted. So, in theory, you would only need one of the spouse to keep working in order to "avoid" the fee.

 

[Badomb]

Hello,

regardless, if you decide to stop working (retire) before 65 in CH, and not fill in for unemployment benefits (RAV), you are still obliged to pay BVG/AHV. The difference is that, instead of charging your (non-existing) salary at source, the gov wants to charge your ENTIRE net worth - this can go up to ca. CHF 25'700 p.a. (roughly, an equivalent of a CHF400k salary)
I'd like to ask you guys - how do you manage it while being early retirees? Do you simply pay, or get self-employed, etc.?

Cheers,
Marius

Very interesting. Where I can read more about how this works? I am often per-project or interim, so not always have stable income source to deduct to BVG (it is good but irregular contributions with breaks once per 1 or 2 years in between).

 

[ducatona]

Hi

I personally plan to simply pay it. I do not see good ways around it. Having a small job just above the threshold could be enough to save money.

Now, it's true that you can pay up to 25k, but for that, you would need a huge net worth (more than 8M CHF). If you have more than 8M CHF, you should not care about 25K per year.

I plan to retire with about 3M CHF. For that, I will pay about 7500 CHF per year. I will take this amount into account in my expenses in retirement and adapt my retirement planning.

Is this amount the same in all Switzerland, or does it depend on the canton you reside?

 

[Baptiste Wicht]

Is this amount the same in all Switzerland, or does it depend on the canton you reside?

The first pillar is the same everywhere, no optimization to change canton.

 

[Marius]

Very interesting. Where I can read more about how this works? I am often per-project or interim, so not always have stable income source to deduct to BVG (it is good but irregular contributions with breaks once per 1 or 2 years in between).

Badomp,

look here: https://www.ahv-iv.ch/p/2.03.e esp. the. table on page 8.

Marius

 

[Marius]

Hi

I personally plan to simply pay it. I do not see good ways around it. Having a small job just above the threshold could be enough to save money.

Now, it's true that you can pay up to 25k, but for that, you would need a huge net worth (more than 8M CHF). If you have more than 8M CHF, you should not care about 25K per year.

I plan to retire with about 3M CHF. For that, I will pay about 7500 CHF per year. I will take this amount into account in my expenses in retirement and adapt my retirement planning.

Hello there,

@Baptiste: thank you for your reply - well, I do care for the 25k - 'optimising' expenses is why I have this problem in the first place. Nevertheless, it's a good problem to have

On a broader topic of this thread: I am exploring various alternatives, including an ad hoc consulting/contracting. It would be therefore interesting to hear some practical experience stories about this.
Another (crazy?) idea, which many expats may have, is to move the wealth abroad, e.g. give it to your mother in a country with no wealth tax or social contribution based on your wealth (according to WIKI, only France, Norway, Spain and Switzerland have the wealth tax).

Cheers,
Marius

 

[The Roving Rodent]

Hello there,

@Baptiste: thank you for your reply - well, I do care for the 25k - 'optimising' expenses is why I have this problem in the first place. Nevertheless, it's a good problem to have

On a broader topic of this thread: I am exploring various alternatives, including an ad hoc consulting/contracting. It would be therefore interesting to hear some practical experience stories about this.
Another (crazy?) idea, which many expats may have, is to move the wealth abroad, e.g. give it to your mother in a country with no wealth tax or social contribution based on your wealth (according to WIKI, only France, Norway, Spain and Switzerland have the wealth tax).

Cheers,
Marius

Giving the wealth to your mother is certainly an option and one that will doubtless be highly appreciated . Just make sure that she isn't living a country with gift tax. The problem comes at the point when you want that money back for yourself; you don't want to commit, or even worse, be caught for tax evasion and large jumps in your declared net worth might attract the attention of the authorities. If anything unfortunate were to happen to your mother, you might also find inheritance a tricky matter.