As retirement approaches, everyone needs to ask themselves not only “When?”, but also “How?
The first and most important recommendation is to plan well in advance (at least 5 years) and ask your pension fund (CP) to carry out simulations, so that you are aware of the budgetary and financial effects on your future retirement life.
Secondly, you should ask your pension fund how much of the capital can be used to finance your retirement.
How do I know whether to take the annuity or the capital?
The first step is to draw up a monthly budget, both now and after retirement. The aim is to ensure that the pension or the return on capital, or a combination of the two, covers your needs.
In what situation should I take the annuity?
- You are in very good health
- The spouse is much younger
- You have minor children or children in training
- Your canton doesn’t have the highest income taxes
When should I take the capital?
- Health is fragile
- You have no children or they are financially independent
- You want maximum flexibility in managing and passing on your capital
- You want to reduce income tax
If you find that your situation meets the criteria for both, you can opt for a mixed solution.
In any case, as your decision is irreversible, it’s best to seek specialist advice to choose the best option for you. In addition, the choice of “Annuity or Capital” must be part of an overall analysis of your assets, as otherwise the advice you receive will not take into account your true situation. To do this, you need to have a financial plan drawn up, which will give you an overall view of your finances, including your 2nd pillar and future projections over 15-20 years.
With 15 years’ experience in occupational benefits, Argos Group takes the time to analyze all the options available to you, and to work with you to choose the best one.
