In Switzerland, the third pillar of retirement can be either in a bank account or in the form of a life insurance. This is a special form of life insurance. You will get some part of your capital back at the retirement age (65 years old currently). In the case you die, your spouse will get the capital. Moreover, most of these insurance policies also cover the case where you can’t pay anymore. Not if you stop paying, of course. But if you become handicapped or unable to work. In this case, the insurance will cover your fee while you can’t work.
I’m not sure this is a good deal for everybody. But it’s a good deal for me. My future spouse does not yet work and will not have a full retirement pension once she retires. Thus, if I pass away, she will have a good cover from my life insurance. For some people, it is also a good way to force them to contribute to their retirement savings.
I pay 300 CHF each month for this insurance. Until now, I’ve always counted that as an expense in my budget. But, it is not really an expense. It is similar to the payment I do to my bank third pillar. And I don’t account for these as expenses. This is investment. So, I decided to remove this recurring expense from my budget. Since we are close to the beginning of the year, I also decided to remove it from January 2018 and February 2018. This means that my savings rate is better in these two months. It is now 33% in January and 4.2% in February. I will update the Savings Rates shortly.
However, my Net Worth does not get better since the current value of the insurance is 0 CHF. If you take out the insurance in the early years, you lose everything. In fact, I will start accounting the insurance as Net Worth in September 2018. This makes my accounting better and more accurate.
What about you ? How do you account for your retirement life insurance ? Do you have one ?
Edit: I changed the way I’m accounting for my life insurance, this gives me a savings rate of 4.2% now.
February is now done, it’s time for another monthly update!
I haven’t posted on this blog since the last update, I was in vacation in China for more than half the month. I hope to post more in March.
Continue reading “February 2018 Update – Vacation and wedding”
Edit: I changed the way I’m accounting for my life insurance, this gives me a savings rate of 33.7% now.
It is time for another monthly update! After a good December 2017, the new year is up to great start in January with year another very good month 🙂
Continue reading “January 2018 Update – Ph.D. and good savings”
For once, I’m gonna try to set clear goals for this year! I’ve set up a nice spreadsheet for my goals for this year (credits to retirebyforty for the spreadsheets idea):
I’ve tried to not set goals that are too high but still strive for better than this year. This is my first attempt at setting yearly goals, so maybe I’ll add new goals during the year, but I’ll not remove any goal nor downsize any goal.
Continue reading “Goals for 2018”
Happy new year to you all!
Now that we started 2018, it is time for the last monthly update of 2017. After a rather poor November 2017, December 2017 is significantly better.
Continue reading “December 2017 Update + 2018 perspectives”
November 2017 is over, it is time for another monthly update. After a bad October 2017, I have seen some improvements.
November 2017 was not bad in terms of savings, but it was a bit lower than I was expecting. The savings rate for the month is 14.25%. It is not perfect, but still better than last month. My goal is to go to 25%, but probably will need a raise to go there (I’m still gonna try without the raise).
Continue reading “November 2017 Update”
I just got confirmation from my building manager that they accepted the reduction of rent that I asked for. Although I’m quite satisfied by the answer, they have been incredibly slow in answering me. They answered more than two months after my request… My base rent goes from 1175 to 1122. This will only start at the next term of my lease, on April 1st. But this means that next year, I’ll save 53 CHF * 9 = 477 CHF. And I’ll save even more the following year since all months will be lower 🙂
Continue reading “Save 53CHF per month by asking for a reduction of rent!”
I decided to check all my recurring expenses and see if I could save something on at least some of them. Turns out I can! I was able to change my car insurance to save over 350 CHF per year on it.
Continue reading “How to save over 350CHF on car insurance”
This is the first monthly update of my budget and finances on this blog. I’ll try to do this every month and normally earlier than this (I was in vacation).
October 2017 was not really good in terms of savings, but a bit better than I was expecting. The savings rate for the month is 8.15%. It’s not really good but I was expecting a loss, so it’s not so bad.
Even though I was in vacation in China, this is not what made my budget so bad. The only really expensive stuff was the plane tickets but they were paid earlier. I had to pay almost 600 CHF for dentist and 450 CHF for Billag. On that note, I really hope the “No Billag” initiative will pass next March, that would be a very nice improvement to my budget, especially since I don’t watch TV and don’t listen to the radio.
Update: Unfortunately, Swiss people seem to like taxes and rejected the initiative
I have started to review my portfolio with better investments. I still have around 60% of my assets in cash, 11% in international stocks, 10% in domestic stocks and 17% in bonds. I plan to decrease the cash this month, especially for my retirement savings third pillar.
November should not be very good since I have to purchase new plane tickets to China, but this will hopefully be the only big expense of the month and therefore the savings rate should be better. I plan to be very frugal this month. I also plan to reduce a few of my monthly expenses (more on that later). I will check again all the expenses on my budget and try to come up with solutions to reduce the overall spend that is still too high.
What about you ? How was your October ?