For many, this is probably the most important financial question before retirement: would you prefer to have your pension fund assets paid out as a monthly pension, as a lump sum, or as a combination of both? The baby boomer generation is currently facing this decision.
Why is this choice so important?
- For most people, the capital they have saved in their pension fund is their largest asset.
- Life expectancy is constantly rising. The pension savings must cover an increasingly long period of time – currently around 20 to 30 years. It is almost impossible to correct mistakes later on. Once the choice has been made, it cannot be changed.
It is not necessary to choose between a pension and capital, or vice versa. Many people today consciously opt for a combination: the ‘secure’ part as a pension ensures predictability, while the capital portion allows flexibility for wishes, investments or inheritances.
There is no rule of thumb for the ratio of pension to capital in individual cases. Life situations, goals and risk profiles vary too greatly. Personal advice tailored to individual circumstances can help in weighing up the various factors and structuring the withdrawal of pension fund assets.
Wer seine Pensionskassenguthaben optimal nutzen will, braucht mehr als eine Entscheidung, er oder sie braucht den Überblick. Eine umfassende Beratung schafft Orientierung und macht aus einer Wahl eine Strategie.
Barbara Birchler
Relationship Manager Region Zurich
Why personal advice is crucial
- There are many factors to consider: taxes, inflation, family security, investment options and personal health.
- Talking to experienced customer advisors is the best way to clarify individual needs and find smart combinations.
- Take your time, seek advice and find a solution that fits your life perfectly. It's out there – and it starts with an individual analysis of your financial goals and needs.