Hi all…
I would like to ask for anyone’s advice on the right approach to savings and investing in the context of being employed by a non-Swiss based company. I don’t ask about where to invest, but rather I look for questioning or maybe confirming if my described below approach between building financial cushion vs. pension contributions makes sense.
Since mid-2022, my employee status has been something called ANobAG - Arbeitnehmende ohne beitragspflichtigen Arbeitgeber (employee of an employer that is not required to contribute to Swiss social security). My employer is based in the US and has no presence in CH.
In this situation I get monthly gross salary and I have to pay all the mandatory social contributions myself. The employer doesn’t pay anything on their own to the state. Being on Permit C, means I also have to save money for future tax payments.
According to the article ANobAG in Switzerland: A Practical Guide - moneyland.ch , I don’t have to contribute to the 2nd Pillar, which for now indeed I haven’t.
Now, the question is about the correct priorities I should establish where to put my money first. The areas are:
• Building 6-12 months financial safety net
• Max out 3rd pillar every year
• Max out 2nd pillar every year
I have to admit that until recently, I have been mostly spending money and only partially saving for the cushion or retirement (not always contributed to 3rd pillar with max amount). Now I want to change this and be smarter about this.
I was looking for an independent financial advisor to clarify which order of investments would be the right one. I struggled to find one who would not try to sell his products. In the end, I found one experienced business guy who has achieved some corporate success and is now offering mentoring/coaching. So I asked him for his point of view.
He suggested (based on my needs of course) that the potentially correct order would be the one above. But of course there are trade-offs.
Some considerations: Financial safety - currently, I have safety cushion which would cover only about 3 months of expenses for my family if things go south. So it makes sense to build it up to the level I want as soon as possible (at least to cover 6 months).
All free cash after expenses would go in the above bucket, so no contributions to Pension until the required level is achieved.
2023 comes to an end, which means I will not contribute to 2nd/3rd Pillar at all this year
Does it mean I would already have a significant gap in future retirement? Should I instead put a reasonable (?) amount so there is at least some contribution this year? Or does it make more sense to still max out 3rd pillar in 2023 to save on taxes?
Or maybe splitting any free cash between those 3 bucket makes sense? Unfortunately, that would mean only partial contributions to 3rd Pillar as I could not afford to max it out and additionally build up the safety cushion asap.
I understand this is not a black and white situation and depends on personal circumstances, but I would appreciate at least some thoughts, maybe your own experience, that would help me in making at least a bit better decisions.
Or maybe you know any independent advisor who could help me here?
If I missed any important thing in the topic, that should also be considered, feel free to point out.
Thank a lot.