I am struggling with some questions regarding the pension pillars and leaving Switzerland for early retirement. I know these are questions for a professional tax/pension advisor, but I want to ask the questions here too to see what people here have to say and to see what useful websites etc you guys might have.
Are there any reputable tax/pension advisors that you know of that I can contact ? Someone familiar with the Swiss / Portuguese rules ?
First off my situation. Almost 52 years old, EU citizen having worked in Switzerland for the last 20 years. I would like to retire as early as possible. I have always lived frugally and saved my money. Now, after a small inheritance, I have bought a house in the Algarve, Portugal. The preliminary contract has been signed and a downpayment has been made, but the main sum must still be paid. I have enough money to pay the house in full and after that have enough left over to live in Portugal until I turn 65. My questions are all for the case where I quit work as soon as possible after the house has been bought and paid for, and I received the keys. The job here in Switzerland has been quit and my C-permit handed back, I moved into the house in Portugal and registered there as an inhabitant. Life as a beach bum / biker has begun. But because I am still quite young I may try to find the occasional remote work contract for companies in the EU, and pay taxes on this income in Portugal.
I will split my quesition according to the pension pillars.
1st pillar. From what I understand from www.zas.admin.ch the 1st pillar pension will be paid by either Switzerland or Portugal, dependent on which country I worked (paid income tax) in last ? With so and so many years of contribution, would I receive x% of the Swiss pension or x% of the Portuguese pension, and is this affected by remote work in Portugal ? Would the Swiss pension be paid out according to the exchange rate of that year, or be frozen at a certain exchange rate ? I donāt like the insecurity of receiving a Portuguese state pension as the country is not too wealthy, and I am not sure about the long term stability of the Euro. I also get the suspiscion it is better not to work the occasional remote assignment in Portugal, as this would immediately convert my whole Swiss 1st pillar into a Portuguese 1st pillar.
2nd pillar. Since I am still in the process of buying the house and because it will be my main residence, I assume have the option of using my pension fund for this. So at the moment I can still get most of the money out against the Swiss 10% lump sum tax rate. But because I have enough funds to last me till I am 65, and have no clue about investing etc I prefer to receive an actual pension from my 2nd pillar. So after I quit my job the money goes into a vested benefits account at a Swiss bank. I do not want to take out the money when I turn 61 as I figure then it will be counted as income for Portugal and I pay like 40% tax on whole sum, correct ? But what then happens when I turn 65 or 66 ? Does the vested account pay out in one go and I have no choice but to take the lump sum and pay 40% income tax ? Or can I choose to use the pre-taxed amount to buy a monthly pension income from a Swiss institution in CHF, and only pay Portuguese income tax on this income ? This last option is preferable because a rise in the CHF exchange rate would mean more Euros, and the progressive income tax scales. Another option would be to take out my pension fund now at 10% tax, and just park the money on a Swiss savings account. Then when I turn 65, do I have access to the same monthly payout style schemes as I would when it was still āofficialā 2nd pillar money ?
Thank you for your answers / insights !