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If you want to retire early, you need to make provisions.
KEYSTONE
Who doesn't dream of retiring early? But be careful! Early retirement costs a lot. If you don't inform yourself in good time, you risk massive losses in your AHV and pension fund.
Who doesn't dream of retiring earlier? But if you take the plunge, you risk deep cuts to your AHV and pension fund. Early retirees pay longer contributions, receive less pension - and often underestimate the true costs. You should be aware of these seven pitfalls.
Many people think they can simply leave a few years earlier and enjoy an unrestricted income. But early retirement leads to a significant loss of income. The pension fund pension is lower because there are fewer contribution years and the conversion rate falls.
You also lose interest on your retirement capital. The AHV pension is reduced for each year of early withdrawal - by around 6.8 percent per year according to official calculations. This can result in several hundred francs less per month for the rest of your life.
A common mistake is not having a budget plan. Experts therefore recommend checking your financial situation carefully before taking early retirement and drawing up a budget plan.
This is the only way to recognize whether income and expenditure are in balance or whether early retirement will create a gap. If you underestimate the costs of health insurance premiums, taxes and everyday expenses, you will later realize that your capital is dwindling faster than you thought. Plan reserves for unexpected expenses!
Many early retirees believe that they no longer have to pay AHV contributions. This is not true: if you take AHV early, you will continue to pay contributions until you reach the reference age.
Anyone who is no longer working must register with the compensation office as a non-employed person and pay a minimum contribution. This is currently at least CHF 514 per year. If you continue to work, you can limit your AHV contribution obligation by using the allowance of CHF 16,800. If you don't know these rules, you risk gaps in contributions and reductions.
Early retirement shortens the savings phase. To reduce the pension gap, experts advise voluntary purchases into the pension fund. Swiss Life points out that voluntary contributions before retirement increase the retirement capital and at the same time reduce the tax burden.
Many people forgo this or make purchases too late. Please note, however, that a purchase into the pension fund is subject to a three-year blocking period if you want to withdraw capital at a later date.
Gaps in income often arise between retirement and the ordinary pension. If you do not have a bridging pension from the 2nd pillar, you will have to finance this gap from savings or voluntary purchases.
There are models where the pension fund pays out a temporary pension up to the reference age. Find out about the conditions from your pension fund in good time.
Early retirement requires you to meet deadlines: you must notify your pension fund and the AHV in good time - often several years before your retirement date. According to experts, you should check the regulations to see from what age early withdrawal is possible and by when you have to register.
If you miss these deadlines, you will also miss the opportunity to withdraw a lump sum instead of a pension or to optimize your pension plan.
Retiring completely is not the only option. In Switzerland, partial retirement is possible from the age of 58; you can reduce your workload and draw the corresponding portion of your retirement benefits. Many people overlook this option, even though it offers tax advantages and makes the transition easier. It is also possible to defer your AHV pension; the longer you work, the higher your pension will be.
If you ignore these options, you are giving away potential pension increases or the flexibility to start your retirement early.
