Financial Planning
Financial planning is a comprehensive evaluation of someone's current and future financial state by using currently known variables to predict future cash flows, asset values and withdrawal plans. It is an ongoing process to help you make sensible decisions about money that can help you achieve your goals in life; it's definitely not just about buying products like a pension or an insurance policy.
7 questions you should always ask your financial planner first:
- What are your qualifications?
- How much experience do you have?
- What services do you offer?
- What is your approach to financial planning?
- Will you be the only person working with me?
- How will I pay for your services?
- Have you ever been disciplined for any unlawful or unethical actions in your professional career?
Simplified, it is working out how you are going to afford and plan to have the things you most want in life. You might have short term goals, like: buying a home, educating your children, tax minimisation, or your goals may involve longer term planning for your retirement or managing an inheritance. Whatever your aspirations in life, financial planning is the first step to achieving them. If you have a defined goal it is proven that most people are bound to reach that goal. Without a goal you are just chasing your tail.
You may be thinking - Why do I need to employ a professional financial planner? The answer is simple: even financially astute people benefit from the expertise of a professional financial planner. By spending time discussing your aspirations with you and conducting a detailed analysis of your financial resources, aims and objectives, a financial plan will become your roadmap to achieve your financial goals.
The Financial Planning Process
- Establishing and defining the client-planner relationship
- Gathering your data and identifying goals
- Analysing and evaluating your financial status
- Developing and presenting financial planning recommendations and/or alternatives
- Implementing the financial planning recommendations
- Monitoring the financial planning recommendations
Swiss Pension Analysis
These days we are living longer than 100 years ago, which is a wonderful development, however, we can therefore expect to spend more time in retirement than our parents or grandparents did. Have you planned for a secure, comfortable retirement?
In contrast with 50 years ago, when a retirement of less than 10 years was the norm, today retirement can last 20, 30 or even more years. Sometimes the State provides some basic financial security in the form of a State pension, where the amount you receive depends on the number of years you have worked. As an international professional, living and working in different countries and being limited in your contributions to these plans in the various countries where you have worked, this will have a detrimental effect on the amount of State pension you could expect at retirement age.
What could you expect from your Swiss State pension (1st Pillar) and what pension/benefits are you entitled to from other countries?
Your (Swiss) employer pension scheme (2nd Pillar) provides income over and above the State pension, but the benefits will vary depending on what type of scheme it is, whether you have a supplementary pension plan, what the contribution levels were and many other factors including length of service, earnings at the date of leaving and investment performance.
Perhaps you are considering making voluntary pension contribution or have been doing so already but want to know what returns they achieve and how they are treated in terms of tax. In Switzerland we have a range of solid voluntary contributions solutions (3rd Pillar solution) and we can introduce a range of different options to you to suit your need.
How much do I really have and how much do I need at retirement?
Many of our clients really struggle to work out what pension plans they have and where, how much they are worth and how they perform. The BIG QUESTION they all have is: Will my provisions give me the retirement I desire?
Achieving the dream of a secure, comfortable retirement is much easier when you plan your finances and the sooner you plan, the better.
We can perform a comprehensive pension analysis to assess if your current provisions meet your retirement objectives and, in the event they are not, provide you with options to bridge this “pension gap”.
Transferring your Swiss 2nd Pillar Pension.
People who are planning to permanently leave Switzerland and who have an occupational pension plan (2nd pillar) might want to consider transferring this to a tax-friendly environment instead of taking this to their new location and being subject to high taxes.
When you permanently leave Switzerland and you can provide proof thereof (confirmation from the resident’s registration authorities, etc.), your vested benefits can be paid out to you on request. If you emigrate to an EU or EFTA member state and are insured in their pension scheme, survivors and/or invalidity insurance scheme, you can withdraw only the part of your vested benefits that exceeds the statutory minimum. This “LPP minimum” amount must remain in your vested benefits account or vested benefits policy in Switzerland until you retire or become an invalid. Your pension fund can tell you the exact amount of your LPP minimum. The LPP minimum is also shown on your pension certificate that you receive each year from your pension fund.
Taking tax advice in the country that you are moving to before you withdraw any pensions and permanently leave Switzerland is crucial to ensure that you do not encounter massive tax surprises.
Mortgages
Looking for a mortgage on property located in or outside Switzerland? We assist with obtaining a mortgage to suit your needs. Finding the best mortgage can be very time consuming.
Not only are the best interest rates important, but there are other factors to consider as well. For example:
Have you thought through the different structures with which you can finance your property?
Should you partner with a bank or insurance company?
Is a plain vanilla mortgage or amortisation the best option for my circumstances?
How can I use my Swiss pension plans?
What happens if I leave the country?
It is clear that arranging a mortgage can be a mine field that can result in expensive mistakes and a frustratingly drawn out process. We work with the best specialists in this field and can provide you with expert independent advice on the full range of mortgages available on the open market.
Insurance Management
Life insurance products are designed to provide money when it’s most needed. It’s common sense really to have adequate protection policies in place, including life insurance, critical illness and income protection, which help safeguard your financial security and your loved ones'. The sure fact of life is – we all die, we just never know when.
We insure our car and house, which can be replaced easily when something happens, but replacing a loved one is much more difficult and adequate protection will give you financial peace of mind if the unthinkable happens.
Request a meeting to determine, first of all, what you already have in place through your (Swiss) pension plan or other plans and, secondly, to work out with you, given your current circumstances, your protection needs and to provide tailored protection solutions using a wide range of insurance products. It needn't be expensive either.
Estate planning
People dedicate more time on planning a vacation, choosing a car to buy, what to eat, etc. than on estate planning. Estate planning may not be as fun as planning your holiday but consider these four reasons why you should have one and avoid potentially devastating consequences for your loved ones.
An estate plan:
- · protects beneficiaries
- · protects young children
- · could save beneficiaries a big tax bill
- · eliminates family disagreements
Switzerland follows forced heirship laws when it comes to inheritance(tax). This means that certain relatives cannot be disinherited – even if the deceased requests for this in their will.
If the deceased has no Will, the surviving spouse or registered partner will receive:
- 50% of the estate if shared with children and/or grandchildren, 75% of the estate if shared with parents and siblings, 100% of the estate in any other case.
Inheritance law also applies to pensions. In some instances, spouses, registered same-sex partners and children may be eligible to receive a percentage of your Swiss pension if you pass away.
Please take note that live-in partners are not regarded as statutory beneficiaries under Swiss inheritance laws and will not receive anything if their partner passes away without a Will (this is irrespective of how long they have lived together).
Your estate will be passed to the Swiss state if you have no surviving relatives and no Swiss Will was made.
Expats living in Switzerland can specify whether they want to use Swiss inheritance law or the laws of their homeland. It is important to weigh up which rules will suit your situation best. Of course, check if your home country is on the list of Switzerland’s double tax treaties to avoid getting taxed by two different countries.
To ensure that no assets are unclaimed on your demise, make a list of your assets worldwide. This list should include bank accounts, details of life policies, pensions or any other assets (Crypto currencies, share certificates, online trading accounts, etc.), as well as the contact details of people who need to be contacted on your demise.
We can discuss your estate planning needs and will refer you to a specialist in this field if needed.