Retirement Retiring with 1.5 million francs - is that enough?
A sum of CHF 1.5 million initially sounds like an impressive fortune. However, according to a recent study, this is only the average amount of assets that a middle-class couple from the baby boomer generation will have when they retire.
27.09.2024, 06:56
SDA
That should be enough for a nice retirement - right? The VZ Wealth Center addressed this question and examined the pension situation of around 2,200 households in Switzerland. The group of middle-class households includes couples aged between 60 and 68 with an annual gross income of between CHF 100,000 and CHF 214,000. The study showed that many of them underestimate their assets, especially the large contribution made by their pension fund.
Pension fund a major pillar of retirement provision
This is because monthly payments into the second pillar account for almost 60 percent of assets - if you don't own your own home, VZ calculates. And even for households with residential property, almost 40 percent of assets are still invested in occupational pension plans. In addition, most people make voluntary payments into pillar 3a.
Many also invest part of their savings in the untied pillar 3b, hold securities and a certain amount as liquidity in savings and private accounts as well as in a vested benefits account, for example by switching pension funds. All in all, excluding real estate, the median assets amount to a good CHF 1 million.
In addition, 86% of the households surveyed owned their own home, which is also included in the calculation with a median value of around CHF 1 million. Four out of five households had a mortgage, which had a median value of CHF 480,000. After deducting this mortgage, the VZ arrives at the above-mentioned amount of just over CHF 1.5 million at retirement age. This median value means that 50 percent of households have less and 50 percent of households have more assets available at the time of retirement.
Costs in old age higher than expected
However, this seemingly generous sum must also cover all costs incurred until the end of life. And for many, these are higher than expected. This is because professional costs such as commuting to work, special clothing or meals away from home are largely eliminated. However, with more free time, you also have more time and opportunity to spend money or fulfill long-delayed dreams. The cost of supplementary health insurance is also rising. Not to forget taxes, which remain a significant expense item.
The experts show that on a conservative calculation, a couple between the ages of 65 and 90 will need assets of more than one million francs for housing costs, taxes and all expenses in addition to the AHV pension.
