Retirement in Switzerland

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Rainier
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Retirement in Switzerland

Post by Rainier » Thu Feb 28, 2019 6:25 pm

Not sure where this post belongs as it crosses several topics.

In the next 10-15 years I plan to spend 3-5 months a year living in Switzerland. I'm wondering how you would invest your retirement assets to hedge against the difference in economies (US/Switzerland). Or, would you do anything at all?

Holding Swiss Francs is an easy one but offers no growth or inflation hedges (Switzerland has slight deflation right now). At this point SNB likely believes the CHF is overvalued and as an exporting country would like it to decline, another reason to avoid the Franc.

Holding Swiss companies would be another easy suggestions but I doubt it offers any economic protection as they are largely exporting companies. ETFs like EWL are mostly made up of just a handful of multinational brands that track the global economy not the Swiss economy.

Buying real estate? I know it is not easy but is definetly possible in certain areas.

So what's the right approach?

adamthesmythe
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Re: Retirement in Switzerland

Post by adamthesmythe » Thu Feb 28, 2019 7:08 pm

I've vacationed often in Switzerland and the exchange rate to the $ is not just bad, it's really really bad. It would take a great deal more money than I have to retire in Switzerland.

A couple questions:

What's the health care story?

Have you considered Austria?

theplayer11
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Re: Retirement in Switzerland

Post by theplayer11 » Thu Feb 28, 2019 7:31 pm

adamthesmythe wrote:
Thu Feb 28, 2019 7:08 pm
I've vacationed often in Switzerland and the exchange rate to the $ is not just bad, it's really really bad. It would take a great deal more money than I have to retire in Switzerland.

A couple questions:

What's the health care story?

Have you considered Austria?
exchange rate is 1-1....everything just costs more

Jimmie
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Re: Retirement in Switzerland

Post by Jimmie » Thu Feb 28, 2019 7:34 pm

Their flag is a big plus.

AlohaJoe
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Re: Retirement in Switzerland

Post by AlohaJoe » Thu Feb 28, 2019 7:41 pm

I don't do anything at all; I just hold a globally diversified portfolio and hope/expect that in the long-run currency fluctuations will more or less even out.

I do own property locally, though, but that's more about the local rate of inflation than about currency hedging.

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Rainier
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Re: Retirement in Switzerland

Post by Rainier » Thu Feb 28, 2019 7:53 pm

adamthesmythe wrote:
Thu Feb 28, 2019 7:08 pm
I've vacationed often in Switzerland and the exchange rate to the $ is not just bad, it's really really bad. It would take a great deal more money than I have to retire in Switzerland.

A couple questions:

What's the health care story?

Have you considered Austria?
Corona at a bar costs $5 plus tax and tip in the US. Corona in Switzerland costs $6 all in. I'd argue it's not that expensive.

Not sure about health care. I'm not moving there, more like really long vacations.

What about Austria? Would I like it more than Switzerland? Is it cheaper?

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bligh
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Re: Retirement in Switzerland

Post by bligh » Thu Feb 28, 2019 8:07 pm

Rainier wrote:
Thu Feb 28, 2019 7:53 pm
adamthesmythe wrote:
Thu Feb 28, 2019 7:08 pm
I've vacationed often in Switzerland and the exchange rate to the $ is not just bad, it's really really bad. It would take a great deal more money than I have to retire in Switzerland.

A couple questions:

What's the health care story?

Have you considered Austria?
Corona at a bar costs $5 plus tax and tip in the US. Corona in Switzerland costs $6 all in. I'd argue it's not that expensive.

Not sure about health care. I'm not moving there, more like really long vacations.

What about Austria? Would I like it more than Switzerland? Is it cheaper?
Compare the costs of the French, Austrian, and Italian regions of the Alps as well. That whole region is spectacularly beautiful and though I haven't checked the price differences, I would imagine the Italian Alps likely are the cheapest of the bunch.

adamthesmythe
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Re: Retirement in Switzerland

Post by adamthesmythe » Thu Feb 28, 2019 10:21 pm

When I was regularly (summer) vacationing in that area, Italy did not seem to be particularly cheap, I believe Austria was.

Austria was a good balance between unhumorously correct efficiency (Switzerland) and a friendly muddle (France, and especially Italy).

Switzerland does have most of the big mountains though.

GmanJeff
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Re: Retirement in Switzerland

Post by GmanJeff » Fri Mar 01, 2019 6:50 am

Cultures are different, as are the costs of living. Switzerland is clean, safe, expensive, efficient, predictable, beautiful, and reliable. It also is xenophobic, welcoming tourists and their expenditures but not necessarily less transient foreigners unless wealthy and, even then, permitting the purchase of real estate by foreigners only under limited circumstances.

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Re: Retirement in Switzerland

Post by sabhen » Fri Mar 01, 2019 7:42 am

why not Germany? similar culture to the German-speaking part but much cheaper. Switzerland, Austria are within an easy reach from Germany.

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Re: Retirement in Switzerland

Post by renue74 » Fri Mar 01, 2019 7:49 am

Can't live on Corona's alone. We vacationed in Italy in 2015 and I took the Bernina Express train to Pontresina for 2 days.

I remember sitting in a cafe and buying a hamburger, fries and coke. It costs me $25 USD. (yes..I know...it's western food, etc.)

The area was absolutely beautiful and I could see the appeal. Tons of things to do if you are outdoorsy.

alter
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Re: Retirement in Switzerland

Post by alter » Fri Mar 01, 2019 10:16 am

Food is very expensive in Switzerland, especially Zurich. Housing is more than Germany or Austria too. I'd live in Bavaria or Austria near the border and just travel to Switzerland.

Theseus
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Re: Retirement in Switzerland

Post by Theseus » Fri Mar 01, 2019 10:25 am

I noticed that no one is actually answering the OPs question and are encouraging him/her to move to a cheaper place. That is not the problem posed. We have to assume that OP can afford it.

If I were in OPs shoes, I would stay invested in US allocation and not move to any international or Swiss allocation considering USD to CHF is 1-1 conversion. Also in case you decided after a few years that you grown out of “living” in Switzerland and want to be somewhere else then you are not stuck with Switzerland specific allocation.

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Re: Retirement in Switzerland

Post by Raybo » Fri Mar 01, 2019 10:28 am

I have found that restaurants are very expensive in Switzerland, likely due to high wages. Hotels, on the other hand, seemed reasonable to me. Food in supermarkets were at or a bit more than what I expect in San Francisco, which is the opposite of Switzerland, high hotels costs and reasonable restaurant prices.

For me, if I moved to Europe, I'd choose the Italian Alps as restaurants there are much cheaper. On the Italian side of Lake Lugano, an expresso and a cornetto (Italian croissant) are €2. In Lugano, on the Swiss side of the lake, the same two items are €5. In addition, I'd rather be in the EU.
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.

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Re: Retirement in Switzerland

Post by lthenderson » Fri Mar 01, 2019 10:31 am

Rainier wrote:
Thu Feb 28, 2019 7:53 pm
adamthesmythe wrote:
Thu Feb 28, 2019 7:08 pm
What's the health care story?
Not sure about health care. I'm not moving there, more like really long vacations.
Yes but if you are residing there five months of the year, you have a 42% chance of getting sick there versus here and will then need to navigate their healthcare system or hope you are well enough to fly back home to treat whatever condition. I would definitely make sure I understand their healthcare system and what implications it might have on me should I require an expensive procedure while over there.

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Re: Retirement in Switzerland

Post by carol-brennan » Fri Mar 01, 2019 10:39 am

alter wrote:
Fri Mar 01, 2019 10:16 am
Food is very expensive in Switzerland, especially Zurich. Housing is more than Germany or Austria too. I'd live in Bavaria or Austria near the border and just travel to Switzerland.
Agree.

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Re: Retirement in Switzerland

Post by djpeteski » Fri Mar 01, 2019 10:48 am

Rainier wrote:
Thu Feb 28, 2019 6:25 pm
In the next 10-15 years I plan to spend 3-5 months a year living in Switzerland. I'm wondering how you would invest your retirement assets to hedge against the difference in economies (US/Switzerland). Or, would you do anything at all?
So you plan, to spend between 40 and 60 months in Switzerland over the next decade and a half.

If it was me, I would make a Swiss and non-Swiss budget (lets assume US). Add that all up and you have your annual spend budget. For me, I like the idea of putting 3 years of spending, in cash (CDs or whatever), in they few years or months before retirement. If the market goes south during that time, it reduces the blow and probably does not change one's plans to retire.

So I would do that. Take about 12 months of your Swiss spend budget and put it in a Swiss version of a CD. You may also want to eventually move some of your retirement savings in the Swiss form of low cost broad market funds (Do those exist? Ignorant here.)

I would recommend against just buying real estate. Either it will have to sit empty a majority of the time, you will have to manage it from half a world away, or have to pay a management company to do so for you. Do you want to become "un-retired"?

The greatest thing about your plan is that, as is, it is adjustable. If you have a good year, you can stay there 5 or 6 months. A not so good, stay three. Terrible don't go at all or stay in a locale that is close but not too far away.

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Re: Retirement in Switzerland

Post by Rainier » Fri Mar 01, 2019 11:27 am

djpeteski wrote:
Fri Mar 01, 2019 10:48 am
Rainier wrote:
Thu Feb 28, 2019 6:25 pm
In the next 10-15 years I plan to spend 3-5 months a year living in Switzerland. I'm wondering how you would invest your retirement assets to hedge against the difference in economies (US/Switzerland). Or, would you do anything at all?
So you plan, to spend between 40 and 60 months in Switzerland over the next decade and a half.

If it was me, I would make a Swiss and non-Swiss budget (lets assume US). Add that all up and you have your annual spend budget. For me, I like the idea of putting 3 years of spending, in cash (CDs or whatever), in they few years or months before retirement. If the market goes south during that time, it reduces the blow and probably does not change one's plans to retire.

So I would do that. Take about 12 months of your Swiss spend budget and put it in a Swiss version of a CD. You may also want to eventually move some of your retirement savings in the Swiss form of low cost broad market funds (Do those exist? Ignorant here.)

I would recommend against just buying real estate. Either it will have to sit empty a majority of the time, you will have to manage it from half a world away, or have to pay a management company to do so for you. Do you want to become "un-retired"?

The greatest thing about your plan is that, as is, it is adjustable. If you have a good year, you can stay there 5 or 6 months. A not so good, stay three. Terrible don't go at all or stay in a locale that is close but not too far away.
Sorry, in 10-15 years I would make the transition of living there 3-5 months a year.

Thank you for those that have come up with suggestions on my questions versus telling me how expensive Switzerland is. Although I do appreciate the tips on other locations that would be Swiss like but cheaper. Assume I can afford Switzerland for this discussion but still nice to find a deal.

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Re: Retirement in Switzerland

Post by Rainier » Fri Mar 01, 2019 11:33 am

renue74 wrote:
Fri Mar 01, 2019 7:49 am
Can't live on Corona's alone. We vacationed in Italy in 2015 and I took the Bernina Express train to Pontresina for 2 days.
Come on a week long ski vacation with me and I'll prove otherwise...

Sticker shock can be high at restaurants but in Switzerland what you see is what you pay. In the US add 25% to your bill for tax and tip. Makes a difference

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Re: Retirement in Switzerland

Post by martiansteeler » Fri Mar 01, 2019 11:52 am

Unless you have a way to obtain Swiss Citizenship or a residency permit, you will unable to rent an apartment, or buy something. not sure on long-term rental from an AirB&B type setup, so make sure you factor in hotel costs.

FYI - for a residency permit, you could get one showing 120K chuffs of income a year from investments (last time I renewed a permit was 4 years ago, so that number may have gone up). You will have to have Swiss health insurance in order to have a permit. Otherwise, you are limited to a stay of no more than 90 days every 180 days (so you can not stay for 89 days, leave for 2 days and come back for 89 days...if you stay 89 days, you have to leave for 90 days). Leaving is totally out of the Schegan zone (so most of Europe, minus Ireland and the UK and far Eastern Europe).

To have an apartment, you will need a Swiss Bank Account, which is pretty hard to do as a US Citizen, even living there.

Not trying to discourage, just laying out some things that may or may not have been thought about.

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Re: Retirement in Switzerland

Post by TomatoTomahto » Fri Mar 01, 2019 11:57 am

Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: Retirement in Switzerland

Post by SrGrumpy » Fri Mar 01, 2019 12:02 pm

No love for Liechtenstein? Possibly a tad cheaper. But again, there would likely be residency issues.

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Re: Retirement in Switzerland

Post by Rainier » Fri Mar 01, 2019 12:54 pm

martiansteeler wrote:
Fri Mar 01, 2019 11:52 am
Unless you have a way to obtain Swiss Citizenship or a residency permit, you will unable to rent an apartment, or buy something. not sure on long-term rental from an AirB&B type setup, so make sure you factor in hotel costs.

FYI - for a residency permit, you could get one showing 120K chuffs of income a year from investments (last time I renewed a permit was 4 years ago, so that number may have gone up). You will have to have Swiss health insurance in order to have a permit. Otherwise, you are limited to a stay of no more than 90 days every 180 days (so you can not stay for 89 days, leave for 2 days and come back for 89 days...if you stay 89 days, you have to leave for 90 days). Leaving is totally out of the Schegan zone (so most of Europe, minus Ireland and the UK and far Eastern Europe).

To have an apartment, you will need a Swiss Bank Account, which is pretty hard to do as a US Citizen, even living there.

Not trying to discourage, just laying out some things that may or may not have been thought about.
But why not visit as a "long term" tourist under the Schengen rules? 3 months in the summer (less than 90 days) and a month in the winter for example, carefully monitoring the day rules.

Rentals would be short term and seasonal in tourist areas, not cities.. On a monthly basis probably more expensive than a long term lease but I would expect to form relationships with apartment or home owners and provide repeat business.

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Re: Retirement in Switzerland

Post by djpeteski » Fri Mar 01, 2019 1:01 pm

Rainier wrote:
Fri Mar 01, 2019 11:27 am
Sorry, in 10-15 years I would make the transition of living there 3-5 months a year.
I assume that you currently travel there despite your plan being a bit off. It is not easy to do online, but I would explore banking options. Then about 5-10 years from now I would start stock piling cash in Switzerland perhaps using a very conservative allocation. 50%-50%. My goal would be to have a 10-12 months of my Swiss living expenses in cash or near cash. Something like a CD ladder. This way if currency fluctuations or the market goes haywire, you have 3 or 4 years of expenses in francs.

Thank you for those that have come up with suggestions on my questions versus telling me how expensive Switzerland is. Although I do appreciate the tips on other locations that would be Swiss like but cheaper. Assume I can afford Switzerland for this discussion but still nice to find a deal.
I tried not to do that, but some cost conciseness in necessary. Just as if someone was moving from Iowa to New York City with the added currency risk. Plus as you become more familiar with the country, the more likely you will be to spend less money. My point is, that to me, having some francs will help you ride out shortish term fluctuations.

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Re: Retirement in Switzerland

Post by Valuethinker » Fri Mar 01, 2019 1:13 pm

lthenderson wrote:
Fri Mar 01, 2019 10:31 am
Rainier wrote:
Thu Feb 28, 2019 7:53 pm
adamthesmythe wrote:
Thu Feb 28, 2019 7:08 pm
What's the health care story?
Not sure about health care. I'm not moving there, more like really long vacations.
Yes but if you are residing there five months of the year, you have a 42% chance of getting sick there versus here and will then need to navigate their healthcare system or hope you are well enough to fly back home to treat whatever condition. I would definitely make sure I understand their healthcare system and what implications it might have on me should I require an expensive procedure while over there.
Switzerland has the health care insurance system closest to USA I believe in Europe.

Your employer provides health insurance. Otherwise you must buy it.

Presumably pensioners get Swiss government health care? Not sure about this.

Swiss hospitals are not cheap. They warn you about thus if you are British and you have an accident there what the NHS will pay will not be anything like enough.

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Re: Retirement in Switzerland

Post by Valuethinker » Fri Mar 01, 2019 1:13 pm

Rainier wrote:
Fri Mar 01, 2019 12:54 pm
martiansteeler wrote:
Fri Mar 01, 2019 11:52 am
Unless you have a way to obtain Swiss Citizenship or a residency permit, you will unable to rent an apartment, or buy something. not sure on long-term rental from an AirB&B type setup, so make sure you factor in hotel costs.

FYI - for a residency permit, you could get one showing 120K chuffs of income a year from investments (last time I renewed a permit was 4 years ago, so that number may have gone up). You will have to have Swiss health insurance in order to have a permit. Otherwise, you are limited to a stay of no more than 90 days every 180 days (so you can not stay for 89 days, leave for 2 days and come back for 89 days...if you stay 89 days, you have to leave for 90 days). Leaving is totally out of the Schegan zone (so most of Europe, minus Ireland and the UK and far Eastern Europe).

To have an apartment, you will need a Swiss Bank Account, which is pretty hard to do as a US Citizen, even living there.

Not trying to discourage, just laying out some things that may or may not have been thought about.
But why not visit as a "long term" tourist under the Schengen rules? 3 months in the summer (less than 90 days) and a month in the winter for example, carefully monitoring the day rules.

Rentals would be short term and seasonal in tourist areas, not cities.. On a monthly basis probably more expensive than a long term lease but I would expect to form relationships with apartment or home owners and provide repeat business.
Is Switzerland in Schengen?

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Rainier
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Re: Retirement in Switzerland

Post by Rainier » Fri Mar 01, 2019 1:22 pm

djpeteski wrote:
Fri Mar 01, 2019 1:01 pm
I assume that you currently travel there despite your plan being a bit off. It is not easy to do online, but I would explore banking options. Then about 5-10 years from now I would start stock piling cash in Switzerland perhaps using a very conservative allocation. 50%-50%. My goal would be to have a 10-12 months of my Swiss living expenses in cash or near cash. Something like a CD ladder. This way if currency fluctuations or the market goes haywire, you have 3 or 4 years of expenses in francs.
I'm doing this now at Fidelity where I can buy and hold CHF for a 1% transaction fee, probably way cheaper than through a Swiss bank, and a lot easier.

I basically have 50% of my next year's trip to Switzerland in CHF as a hedge against a currency spike (like the one in 2015). As the CHF has stayed low I just keep accumulating and roll it forward to the next year.

By 50-50% allocation what do you mean? 50% in CHF and 50% in ????

Yes, Switzerland is Schengen or at least follows the same rules.

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Re: Retirement in Switzerland

Post by Nestegg_User » Fri Mar 01, 2019 1:23 pm

SrGrumpy wrote:
Fri Mar 01, 2019 12:02 pm
No love for Liechtenstein? Possibly a tad cheaper. But again, there would likely be residency issues.
FL seemed a bit more "closed" to outsiders when traveling through (Schaan, didn't go to Vaduz) but seems a bit quirky....

The OP didn't mention which area of Switzerland...
(personally I didn't like Zurich when there {Oerlikon area, seemed depressing to me} while a niece liked Lausanne while working in the area, but I didn't make it there so don't know)... so there's quite a variety of differences in what they might want.

OP... Since you mentioned that this would be TEN years or more away, you need to seriously consider changes to residency requirements and further limitations to intermediate term stays, not unlike those undertaken by other countries due to influxes of (various "displaced individuals") which might further limit the 90-day rule and also consider potential tax changes (US and CH) and further restrictions on banking abroad. Ten years is a looong time for things to change....
I would probably talk to UBS about what was needed for a bank account here that could be accessed when there and what is needed to transfer funds into it when needed... try to avoid FATCA requirements for US, but others might be able to say if that qualifies for the CH requirements for banking vis-a-vis residency. (or are you a dual citizen?)
This might reduce your need to stockpile francs

For investments, and assuming that you want to maintain that condition for some years, that (probably) means a need for higher yield (international inflation may be higher than that of the US) but also not limited to US only (probably a healthy dose, 40%+, of international), but with much of international down that's not easily done.

{...and ValueThinker...CH is party to the Schlangen agreement}
Last edited by Nestegg_User on Fri Mar 01, 2019 2:23 pm, edited 2 times in total.

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Re: Retirement in Switzerland

Post by khh » Fri Mar 01, 2019 1:27 pm

Jimmie wrote:
Thu Feb 28, 2019 7:34 pm
Their flag is a big plus.
:mrgreen:

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Re: Retirement in Switzerland

Post by UpperNwGuy » Fri Mar 01, 2019 1:43 pm

theplayer11 wrote:
Thu Feb 28, 2019 7:31 pm
adamthesmythe wrote:
Thu Feb 28, 2019 7:08 pm
I've vacationed often in Switzerland and the exchange rate to the $ is not just bad, it's really really bad. It would take a great deal more money than I have to retire in Switzerland.

A couple questions:

What's the health care story?

Have you considered Austria?
exchange rate is 1-1....everything just costs more
Ahem. 1-1 is really really bad. It was much better ten years ago when I used to travel there often on business, and even then it was considered bad.

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Re: Retirement in Switzerland

Post by Rainier » Fri Mar 01, 2019 3:44 pm

Nestegg_User wrote:
Fri Mar 01, 2019 1:23 pm
SrGrumpy wrote:
Fri Mar 01, 2019 12:02 pm
No love for Liechtenstein? Possibly a tad cheaper. But again, there would likely be residency issues.
FL seemed a bit more "closed" to outsiders when traveling through (Schaan, didn't go to Vaduz) but seems a bit quirky....

The OP didn't mention which area of Switzerland...
(personally I didn't like Zurich when there {Oerlikon area, seemed depressing to me} while a niece liked Lausanne while working in the area, but I didn't make it there so don't know)... so there's quite a variety of differences in what they might want.

OP... Since you mentioned that this would be TEN years or more away, you need to seriously consider changes to residency requirements and further limitations to intermediate term stays, not unlike those undertaken by other countries due to influxes of (various "displaced individuals") which might further limit the 90-day rule and also consider potential tax changes (US and CH) and further restrictions on banking abroad. Ten years is a looong time for things to change....
I would probably talk to UBS about what was needed for a bank account here that could be accessed when there and what is needed to transfer funds into it when needed... try to avoid FATCA requirements for US, but others might be able to say if that qualifies for the CH requirements for banking vis-a-vis residency. (or are you a dual citizen?)
This might reduce your need to stockpile francs

For investments, and assuming that you want to maintain that condition for some years, that (probably) means a need for higher yield (international inflation may be higher than that of the US) but also not limited to US only (probably a healthy dose, 40%+, of international), but with much of international down that's not easily done.

{...and ValueThinker...CH is party to the Schlangen agreement}
Can't do anything about future rules that don't exist so just need to assume current laws remain in place

Preferred areas are outside the cities. Mountain valleys or mountain towns.

Just visiting for 3-5 months a year I see no need to get a Swiss bank account. My credit cards will work.

If international is down why does that make it hard for it to be 40% of my allocation? Seems like a good time to stock up.

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Re: Retirement in Switzerland

Post by westie » Fri Mar 01, 2019 4:17 pm

No wonder Swiss Air delayed a flight from Zurich to Boston for an hour waiting for me arrive from a connecting flight. Guess they didn't want to feed us and put us up for the night.

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Re: Retirement in Switzerland

Post by ivk5 » Fri Mar 01, 2019 5:02 pm

martiansteeler wrote:
Fri Mar 01, 2019 11:52 am
To have an apartment, you will need a Swiss Bank Account, which is pretty hard to do as a US Citizen, even living there.
US citizens are welcomed at PostFinance (with residency permit, of course).

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Re: Retirement in Switzerland

Post by Nestegg_User » Fri Mar 01, 2019 5:17 pm

Rainer

I was more thinking of single country risk....
in ten years you would be subject to the risk of currency variation, economic risk of US (vs other countries.... US in recession vs "normal" but subdued internationally), inflation risk of CH different than US, .....
(we could hope that international does better, since the expected return is higher, but that could be like emerging markets where most years recently has had it having the poorest returns, per the Callan chart https://www.callan.com/periodic-table/)

{when there, kept francs and credit cards}

[AFA flying, yep .... different status for Schlangen member flyers vs US.....]
Last edited by Nestegg_User on Fri Mar 01, 2019 5:27 pm, edited 1 time in total.

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Re: Retirement in Switzerland

Post by Rainier » Fri Mar 01, 2019 5:20 pm

westie wrote:
Fri Mar 01, 2019 4:17 pm
No wonder Swiss Air delayed a flight from Zurich to Boston for an hour waiting for me arrive from a connecting flight. Guess they didn't want to feed us and put us up for the night.
I must keep missing the joke. As I have explained several times now that after you factor in tax and tips food prices are not outrageous in Switzerland when compared to HCOL areas in the US. I've stayed many times at the Holiday Inn Express at Zurich Airport (5 minutes free shuttle) for $125 a night.

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Re: Retirement in Switzerland

Post by Nestegg_User » Fri Mar 01, 2019 5:30 pm

typically used Ibis, when in Zurich.... cheaper and about the same quality

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Re: Retirement in Switzerland

Post by Rainier » Fri Mar 01, 2019 5:30 pm

Nestegg_User wrote:
Fri Mar 01, 2019 5:17 pm
Rainer

I was more thinking of single country risk....
in ten years you would be subject to the risk of currency variation, economic risk of US (vs other countries.... US in recession vs "normal" but subdued internationally), inflation risk of CH different than US, .....

{when there, kept francs and credit cards}

[AFA flying, yep .... different status for Schlangen member flyers vs US.....]
That's really my main question here and the lack of answers likely means there is no easy answer. If Switzerland remains cheap I can visit for 5 months a year. If it gets super expensive maybe only a month or less.

As an investor I would have no need to ever own CHF but as a consumer of CHF I should continue accumulating them at prices that seem reasonable to me.

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Re: Retirement in Switzerland

Post by martiansteeler » Sat Mar 02, 2019 11:21 am

Valuethinker wrote:
Fri Mar 01, 2019 1:13 pm
Rainier wrote:
Fri Mar 01, 2019 12:54 pm
martiansteeler wrote:
Fri Mar 01, 2019 11:52 am
Unless you have a way to obtain Swiss Citizenship or a residency permit, you will unable to rent an apartment, or buy something. not sure on long-term rental from an AirB&B type setup, so make sure you factor in hotel costs.

FYI - for a residency permit, you could get one showing 120K chuffs of income a year from investments (last time I renewed a permit was 4 years ago, so that number may have gone up). You will have to have Swiss health insurance in order to have a permit. Otherwise, you are limited to a stay of no more than 90 days every 180 days (so you can not stay for 89 days, leave for 2 days and come back for 89 days...if you stay 89 days, you have to leave for 90 days). Leaving is totally out of the Schegan zone (so most of Europe, minus Ireland and the UK and far Eastern Europe).

To have an apartment, you will need a Swiss Bank Account, which is pretty hard to do as a US Citizen, even living there.

Not trying to discourage, just laying out some things that may or may not have been thought about.
But why not visit as a "long term" tourist under the Schengen rules? 3 months in the summer (less than 90 days) and a month in the winter for example, carefully monitoring the day rules.

Rentals would be short term and seasonal in tourist areas, not cities.. On a monthly basis probably more expensive than a long term lease but I would expect to form relationships with apartment or home owners and provide repeat business.
Is Switzerland in Schengen?

Yes. (https://travel.state.gov/content/travel ... engen.html)
Last edited by martiansteeler on Sat Mar 02, 2019 11:30 am, edited 1 time in total.

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Re: Retirement in Switzerland

Post by martiansteeler » Sat Mar 02, 2019 11:23 am

Valuethinker wrote:
Fri Mar 01, 2019 1:13 pm
lthenderson wrote:
Fri Mar 01, 2019 10:31 am
Rainier wrote:
Thu Feb 28, 2019 7:53 pm
adamthesmythe wrote:
Thu Feb 28, 2019 7:08 pm
What's the health care story?
Not sure about health care. I'm not moving there, more like really long vacations.
Yes but if you are residing there five months of the year, you have a 42% chance of getting sick there versus here and will then need to navigate their healthcare system or hope you are well enough to fly back home to treat whatever condition. I would definitely make sure I understand their healthcare system and what implications it might have on me should I require an expensive procedure while over there.
Switzerland has the health care insurance system closest to USA I believe in Europe.

Your employer provides health insurance. Otherwise you must buy it.

Presumably pensioners get Swiss government health care? Not sure about this.

Swiss hospitals are not cheap. They warn you about thus if you are British and you have an accident there what the NHS will pay will not be anything like enough.
I always had to buy mine, employer never provided.

A Swiss Pensioner will receive health care benefits...however OP isn’t a Swiss Pensioner, he is an American taking a long vacation in Switzerland. He won’t have a residency permit, or Swiss Social Security benefits.

martiansteeler
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Re: Retirement in Switzerland

Post by martiansteeler » Sat Mar 02, 2019 11:28 am

Rainier wrote:
Fri Mar 01, 2019 12:54 pm
martiansteeler wrote:
Fri Mar 01, 2019 11:52 am
Unless you have a way to obtain Swiss Citizenship or a residency permit, you will unable to rent an apartment, or buy something. not sure on long-term rental from an AirB&B type setup, so make sure you factor in hotel costs.

FYI - for a residency permit, you could get one showing 120K chuffs of income a year from investments (last time I renewed a permit was 4 years ago, so that number may have gone up). You will have to have Swiss health insurance in order to have a permit. Otherwise, you are limited to a stay of no more than 90 days every 180 days (so you can not stay for 89 days, leave for 2 days and come back for 89 days...if you stay 89 days, you have to leave for 90 days). Leaving is totally out of the Schegan zone (so most of Europe, minus Ireland and the UK and far Eastern Europe).

To have an apartment, you will need a Swiss Bank Account, which is pretty hard to do as a US Citizen, even living there.

Not trying to discourage, just laying out some things that may or may not have been thought about.
But why not visit as a "long term" tourist under the Schengen rules? 3 months in the summer (less than 90 days) and a month in the winter for example, carefully monitoring the day rules.

Rentals would be short term and seasonal in tourist areas, not cities.. On a monthly basis probably more expensive than a long term lease but I would expect to form relationships with apartment or home owners and provide repeat business.
Long Term tourist is fine, you jut have to be mindful of the dates of entry/exit. No need for a bank account, etc. you may have to register/de-register with the local authorities, based on length of stay.

you do have to make sure your US health insurance will cover long term, out of country. Not sure if a travel health policy will cover that long. You should be able to find one that will.

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Rainier
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Re: Retirement in Switzerland

Post by Rainier » Sun Mar 03, 2019 5:05 pm

So maybe the better question is, if you were Swiss what would you be investing in?
Last edited by Rainier on Sun Mar 03, 2019 6:47 pm, edited 1 time in total.

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Re: Retirement in Switzerland

Post by Traveler » Sun Mar 03, 2019 5:49 pm

I go to Europe a few times a year for leisure travel and to me, Switzerland is outrageously expensive. I was in Alsace France and Lucerne in late spring 2017. The hotel was almost double what I stayed in in France and food was ridiculous - a pizza and beer was about $12 in France and about $25 in Lucerne. While it is a beautiful country, I've pretty much sworn off Switzerland. There are too many other wonderful places to see that don't cost an arm and a leg. I think Switzerland was even more expensive than Iceland.

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Re: Retirement in Switzerland

Post by Rainier » Sun Mar 03, 2019 6:46 pm

Traveler wrote:
Sun Mar 03, 2019 5:49 pm
I go to Europe a few times a year for leisure travel and to me, Switzerland is outrageously expensive. I was in Alsace France and Lucerne in late spring 2017. The hotel was almost double what I stayed in in France and food was ridiculous - a pizza and beer was about $12 in France and about $25 in Lucerne. While it is a beautiful country, I've pretty much sworn off Switzerland. There are too many other wonderful places to see that don't cost an arm and a leg. I think Switzerland was even more expensive than Iceland.
Seriously, can't find anywhere I've posted asking about the cost of living in Switzerland. This is what drives me crazy about the forum sometimes.

I know how expensive it is. I've been there many many times.

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G12
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Re: Retirement in Switzerland

Post by G12 » Sun Mar 03, 2019 7:06 pm

Rainier wrote:
Sun Mar 03, 2019 6:46 pm
Traveler wrote:
Sun Mar 03, 2019 5:49 pm
I go to Europe a few times a year for leisure travel and to me, Switzerland is outrageously expensive. I was in Alsace France and Lucerne in late spring 2017. The hotel was almost double what I stayed in in France and food was ridiculous - a pizza and beer was about $12 in France and about $25 in Lucerne. While it is a beautiful country, I've pretty much sworn off Switzerland. There are too many other wonderful places to see that don't cost an arm and a leg. I think Switzerland was even more expensive than Iceland.
Seriously, can't find anywhere I've posted asking about the cost of living in Switzerland. This is what drives me crazy about the forum sometimes.

I know how expensive it is. I've been there many many times.
Ya, but the forum will still let you know your decision is uneconomical, maybe even "un-Bogleheadish" although you didn't posit your scenario as "can I afford this." Good luck, enjoy your future Switzerland visits. :beer

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Re: Retirement in Switzerland

Post by ivk5 » Mon Mar 04, 2019 3:06 am

Rainier wrote:
Sun Mar 03, 2019 5:05 pm
So maybe the better question is, if you were Swiss what would you be investing in?
Agree think that’s the right question. For equities, probably global cap-weighted, perhaps with modest Europe bias. I would not bias equities toward CH - not a great currency hedge since CH public companies are doing majority of their business elsewhere; and sector concentration (life sciences and banking/insurance) unacceptable to me. Instead I’d think about holding some cash/FI in CHF to roughly match expected spending, even at 0% interest (which may be a slightly positive real rate at the moment). Just my CHF 0,02...

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Re: Retirement in Switzerland

Post by Rainier » Mon Mar 04, 2019 6:04 am

ivk5 wrote:
Mon Mar 04, 2019 3:06 am

Agree think that’s the right question. For equities, probably global cap-weighted, perhaps with modest Europe bias. I would not bias equities toward CH - not a great currency hedge since CH public companies are doing majority of their business elsewhere; and sector concentration (life sciences and banking/insurance) unacceptable to me. Instead I’d think about holding some cash/FI in CHF to roughly match expected spending, even at 0% interest (which may be a slightly positive real rate at the moment). Just my CHF 0,02...
How do you buy fixed income in CHF? Swiss government bonds are negative yield still so holding CHF at Fidelity seems way better (no cost to own, just pay 1% commission). Is there a way to buy Swiss corporates (at a relatively low cost)? Might be able to find a European bond fund and see how much is denominated in CHF.

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Re: Retirement in Switzerland

Post by ivk5 » Mon Mar 04, 2019 4:16 pm

Rainier wrote:
Mon Mar 04, 2019 6:04 am
ivk5 wrote:
Mon Mar 04, 2019 3:06 am

Agree think that’s the right question. For equities, probably global cap-weighted, perhaps with modest Europe bias. I would not bias equities toward CH - not a great currency hedge since CH public companies are doing majority of their business elsewhere; and sector concentration (life sciences and banking/insurance) unacceptable to me. Instead I’d think about holding some cash/FI in CHF to roughly match expected spending, even at 0% interest (which may be a slightly positive real rate at the moment). Just my CHF 0,02...
How do you buy fixed income in CHF?
I don't have direct experience. There may be a CHF-hedged Europe or Global bond fund, for example. But these are irrelevant to you as a US citizen (google PFIC). This is where the "if you were Swiss" hypothetical starts to reach the limit of its utility.
Rainier wrote:
Mon Mar 04, 2019 6:04 am
Swiss government bonds are negative yield still so holding CHF at Fidelity seems way better (no cost to own, just pay 1% commission).
No reason to pay extortionate fees/commissions to hold CHF. You can do it for next to nothing at Interactive Brokers, from what I understand. (I hold CHF in a Swiss account - which was fee-free until last month, but that's a gripe for another forum. But again, doesn't help you much as a non-resident.)

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Re: Retirement in Switzerland

Post by halfnine » Mon Mar 04, 2019 6:56 pm

We're a bit similar on how retirement may look. Since we have 4 different citizenships among us we have a globally diversified portfolio across both equities and fixed income. Once one factors in our exposure to USD with eventual Social Security benefits we have little need to hold much USD in fixed income.

As to holding CHF, you might look at IB and in the future Transferwise. IB should get you lower conversion fees (?). And, Transferwise has a Borderless account which at some point I believe will be available to US residents (?). The advantage of the Transferwise account is I believe it has the equivalent of FDIC insurance whereas I am not sure whether Fidelity or an IB account are insured.

You'll want to keep a look out that you do not become a tax resident of Switzerland. The rules (in general) appear to be getting more and more stringent about what ties one to a country and what income is taxable when you become a tax resident. I found this out recently where I reside now, unfortunately, as my understanding of the rules had changed since I moved.

Finally, once one starts staying in a country for months instead of a month it does get increasingly more frustrating when one doesn't have rights, bank accounts, credit status, drivers license, etc. in a country. It just limits what one can and can not do. A lot of amenities available to the locals that make life simpler or more economical are just not available to you. Unfortunately, being it's Switzerland and you're a foreigner, you will likely never have access to these.

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Re: Retirement in Switzerland

Post by Scrapr » Mon Mar 04, 2019 7:11 pm

renue74 wrote:
Fri Mar 01, 2019 7:49 am
Can't live on Corona's alone. We vacationed in Italy in 2015 and I took the Bernina Express train to Pontresina for 2 days.

I remember sitting in a cafe and buying a hamburger, fries and coke. It costs me $25 USD. (yes..I know...it's western food, etc.)

The area was absolutely beautiful and I could see the appeal. Tons of things to do if you are outdoorsy.
$25 for a meal deal is almost decent. Food carts you would think are cheap. Can hardly get out of one now for <$20. Except my mexican cart. Big burritos for $8. Love it

Apropo of nothing...Did you like the Bernia Express? That corkscrew looks wild. Saw it on Seat 61. Trying to fit it in to our trip on May

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Re: Retirement in Switzerland

Post by renue74 » Mon Mar 04, 2019 10:31 pm

Scrapr wrote:
Mon Mar 04, 2019 7:11 pm
renue74 wrote:
Fri Mar 01, 2019 7:49 am
Can't live on Corona's alone. We vacationed in Italy in 2015 and I took the Bernina Express train to Pontresina for 2 days.

I remember sitting in a cafe and buying a hamburger, fries and coke. It costs me $25 USD. (yes..I know...it's western food, etc.)

The area was absolutely beautiful and I could see the appeal. Tons of things to do if you are outdoorsy.
$25 for a meal deal is almost decent. Food carts you would think are cheap. Can hardly get out of one now for <$20. Except my mexican cart. Big burritos for $8. Love it

Apropo of nothing...Did you like the Bernia Express? That corkscrew looks wild. Saw it on Seat 61. Trying to fit it in to our trip on May
The Bernina Express was awesome. We spent 2 weeks in Italy...then my wife flew out of Milan. I took a few extra days and visited Varenna (Lake Como) for the day and then took the train up to Tirano...the "end of the line." I had pre-booked the Bernina Express tickets.

It was in the middle of June.....shorts/hot weather in Italy. The train ride was absolutely beautiful. I booked the "1st class" tickets and I was in the car with only one other family...with huge windows. Alp Grum (one of the stops) was classic Swiss. Lots of snow capped mountains, glaciers, and cold weather.

All along the way, you see folks hiking, biking, farming, small village life.

Really enjoyed it. (going back to Tirano...the next day, I took the regular (cheaper) regional train along the same route and it was just as great.)

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