This is how much money you need to be able to maintain your current level after retirement
Even if it still takes a few years, we (58/56 years old, married, homeowner) are thinking about financial security after we stop working. How much money do we have to put aside until we retire so that we can enjoy a financially worry-free pension and maintain the current standard?
Rafael Portman.
You can assume that the pensions from the first pillar (AHV) and second pillar (pension fund) will cover a maximum of around 60 percent of your previous employment income. This means that pension benefits are often not sufficient for the usual standard of living. So you either have to adjust to a more modest standard of living or save additional capital.
It is important that you get an overview of all your finances early on. The first step is to create a spending budget. You can now compare the budget amount with the expected pensions from AHV and pension fund. This way you can see how high the recurring needs will be, which will have to be covered from your assets in addition to the regular income. Also take into account extraordinary expenses for planned projects (e.g. trips), purchases (cars) or investments in your own home.
Save 10 percent of income
The rule of thumb is: If you put around 10 percent of your income aside every year from the time you start working until you stop working, your pension – in addition to the AHV and the pension fund – will be financed at your usual standard of living.
A calculation example makes this clear: Assuming that the total requirement for all expenses from retirement is 8,000 francs per month, i.e. 96,000 francs per year. Of this, around 48,000 francs are covered by the AHV (maximum pensions for married couples including the 13th pension). There remains a deficit of 48,000 francs per year, which must be financed through pension fund pensions and/or saved funds (pillar 3a and/or free assets). Let us also assume that you have saved 600,000 francs of capital in the pension fund, which results in an annual pension of 30,000 francs (assuming a conversion rate of 5.00 percent).
Compensate for the shortfall through additional savings
This results in a monthly deficit of 1,500 francs. This amounts to 18,000 francs per year or 450,000 francs over 25 years. Further assumption: With Pillar 3a you were able to build up 200,000 francs of pension assets together. You must therefore save the remaining 250,000 francs in your free assets until you retire. Please note that this sample calculation does not take into account the possible returns on the investment side. This income can lead to significant improvements in your financial situation.
You can always save actively through voluntary purchases into the pension fund, provided the legal framework conditions are met. You should start planning early on how you can strengthen provisions for old age and build wealth. This opens up more diverse design options.
* Rafael Portman
Financial planning expert Luzerner Kantonalbank; www.lukb.ch
