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Marriage is a great thing in which I believe. However, few people know that in Switzerland, you are sometimes better off financially if you are unmarried. There are several disadvantages to being married in Switzerland.
To be precise, married couples with two working spouses have substantial disadvantages over unmarried couples with two working spouses. If only one spouse is working, there could be some advantages to getting married.
Please do not take me wrong; I am not saying you should not get married! We got married last year, and I do not regret it at all. Marriage is about love, not about money!
I think it is essential to know these differences. And it is crucial for your financial future to evaluate the consequences of getting married.
So in this article, we see what financial differences there are between a married couple and an unmarried couple. You will see some substantial differences in taxes and retirement for married couples.
Marriage in Switzerland
In Switzerland, everybody has a civil status: Married, single, divorced or separated. Civil status is an official status that the government keeps track of.
That means that every marriage is made in front of the law. People can then also do a religious marriage. But the religious marriage is optional and does not matter to the government.
For the administration, several things depend on whether you are married or not. We see two things that are very different: taxes and retirement.
Whether you are married or not, one thing that will change is the amount of taxes you will pay. If you are unmarried, you will fill out two declarations for taxes, but you will fill out a single one if you marry. The difference is that in the latter case, both your income will be accumulated together.
You may think this is the same, but there is a big difference. If you add two incomes together, you will pay more taxes than if you pay separate taxes on both incomes. The reason is that the more income you get, the more taxes you will pay for extra income. Each additional dollar you earn is taxed at increasing marginal tax rates. So, if you both have a significant income, you may pay a lot more.
Since Switzerland is a federal republic, it gets more complicated because each canton has different rules. Some cantons are trying to compensate for the fact that married couples are penalized. It will depend based on which canton you are living in. You need to get information from your canton tax department. In most cantons, married couples will pay more.
On the other hand, in a few cantons, they will both pay the same. And in some cantons, it is better to marry. Overall, married couples are disadvantaged in Switzerland.
If you have only one income, this will make very little difference in most cantons. You could save on taxes in several cantons.
I am currently living in Fribourg in, Switzerland. I am pretty lucky because, in this canton, it is not bad financially to marry (on the other hand, taxes are bad). There is a slight tax advantage to being married in Fribourg. It is especially true when we have only one salary as we currently have.
Another thing that is highly unfair to Swiss couples is the retirement pension.
The first pillar pension is highly unfair to married couples. The maximum pension for a single person is 2350 CHF per month. So an unmarried couple will get 4700 CHF per month. But a married couple will only get 3525 CHF per month. This pension is more than 1000 CHF less per month than if they did not marry. If we divorced before retirement, we could get more than 1000 CHF per month. We are not considering doing that at all. But, sadly, this is the case.
I think this is bad. The reasons for this unfairness are ancient. They date back to when only the man was working and bringing money for the family. Therefore, when they started the first pillar, they decided that the wife’s contribution was less critical, and therefore in retirement, the man should get more than the wife, hence only the 150% for a married couple. This situation may have been the case in the past. But this is not the case anymore. We should fix this situation. There was a discussion about that. But Swiss people refused it because it would have cost too much to the first pillar.
In the future
The tax penalty for married couples will change in the future.
In 2016, we voted for this in Switzerland. Unfortunately, the Swiss citizens decided they did not want to change that. Therefore, it remains unfair.
However, there were some errors in the campaign run for this change. Indeed, during the campaign, they announced that only 80’000 couples were subject to this penalty. But shortly after the votation, it was announced that it was an error and that it was, in fact, 454’000 married couples that were impacted.
So it is possible that the government will invalidate the vote results and we will have to vote again. And since the previous results were very close, only 50.8% of nos, it is quite possible that this time the initiative passes, bringing fairness to the situation.
As you can see, there are two significant disadvantages to getting married in Switzerland if you have two incomes. In my opinion, the biggest one is that you do not get two pensions in retirement. You only get 150% of a single pension. This unfairness does not make sense and is quite sad. For me, marriage should play no part in taxes or pensions. It is a ridiculous and retrograde idea.
Nevertheless, this does not mean you should not marry. We got married and did not regret it!
On the other hand, there are also some advantages to marriage. You will pay fewer taxes on inheritance, for instance. And if one of the spouses dies, the other is entitled, under some conditions, to a widow’s pension.
In the end, money should not play a role in choosing whether to marry or not! Only love and personal reasons should come into play in that decision. Nevertheless, it is crucial to know the differences between a married couple and an unmarried one before your marriage!
To learn more about some disadvantages of living in Switzerland, you can read about the five things I hate about Switzerland.
Do you see any other disadvantages of marriage in Switzerland?
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