When it comes to financial measures of aging, Switzerland performs well in the European comparison. Old-age and survivors’ insurance (AHV) and pension fund pensions are substantial, but not yet sufficient for a comfortable post-work life. According to new accounts from UBS, the 50-year-old must (UBSG 14.26 + 1.03%) Save an additional 14% annually on net earned income until retirement.
In Germany and Italy, 50-year-olds have to pay around 30% of their net wages for it. It is cheaper for the Dutch and Swedes. But they do not enjoy full retirement benefits until the age of 68 or 67, and therefore have to pay for a longer period in the national or mandatory systems.
Save and invest too
According to these calculations, the great pressure to save to fund a comfortable later stage in life is easier if the money is set aside for this purpose before the age of 50. If you are financially sound, UBS recommends that you automatically make a monthly deposit at Pillar 3a Individual Pension.
The main bank also recommends investing large amounts of your 3A savings into diversified equity investments. This is definitely the case if there is still a long investment period until retirement. The overall value fluctuations can then be tolerated.
Extend the loan for a longer period
The UBS Pensions Study also offers suggestions on how Switzerland can appropriately fix the provision of financial aging, thereby separating it from political arrangements. Raising the retirement age – as it has already been set in some other European countries – would keep AHV financially afloat for a longer period despite an aging population. The conversion rate of old-age pension in the occupational pension system should be reduced. Individual pension assets can only be extended over a longer life span with lower monthly pensions.
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