3 investment strategies for your bonus in Switzerland
Investing your employment bonus can be a crucial step to achieving your financial goals. In this article, we'll explore three ways to invest.
1. Investment portfolio
You can invest in the markets through an investment portfolio or a deposit. You can opt for various levels of support:
- If you’re looking for maximum peace of mind, a management mandate enables you to delegate the management of your portfolio to investment specialists. They will help you create and manage your portfolio in accordance with your investment strategy.
At Piguet Galland, you can choose between different types of mandate:
- The Index Mandate: investing exclusively in index funds.
- The Comfort Mandate: offering exposure to long-term investment themes through our own certificates and funds including access to institutional classes so that you benefit from reduced costs.
- The Distribution Mandate: ensuring a specific solution tailored to your liquidity needs. An annual distribution of 4% facilitates financial planning, especially for our clients in Switzerland who seek fiscal efficiency.
- The Premium Mandate: providing multi-asset class management with direct investments and funds from our list of recommendations. Integrating specific restrictions and opting for a conviction profile is possible by applying additional sustainable investment criteria.
Each approach offers specific benefits tailored to meet your liquidity, income, and multi-asset class management needs.
Learn out more about our management mandates
- The Advisory Mandate is a good option if you’d prefer to stay in control while benefiting from professional advice. You talk to the investment experts and make the final decisions.
Learn more about our consultancy mandates
2. Pension planning
As a Swiss employee, you make mandatory contributions to the 1st and 2nd pillars above a certain salary level. These contributions are intended to help you maintain a reasonable standard of living after you retire with an income approximately equivalent to about 60% of your fixed salary.
However, for some people, the pension savings may not be sufficient to maintain their previous standard of living after retirement, creating a gap in their pension provision. This happens when your actual retirement savings are below the level intended by your pension fund's plan...
To fill this gap, you can opt to buy-back into your 2nd pillar or contribute to the 3rd pillar.
- Reinforcing your 2nd pillar:
When you buy-back into the 2nd pillar, or LPP, you pay a supplement to the usual contributions which are deducted each month from your gross salary. The additional amount may vary according to your needs, but some pension funds require a minimum amount to process the buy-back instruction.
Your pension fund calculates a maximum payment. This amount is shown on your annual statement or can be obtained from your pension fund.
To encourage active people to save more for retirement, your entire voluntary payment is tax deductible.
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Contribute to the 3rd pillar:
The 3rd pillar is an optional individual savings scheme designed to supplement the benefits provided by the 1st and 2nd pillars of the Swiss social security system. Contributions to the 3rd pillar, also known as pillar 3a, deductible from taxable income, offering attractive tax advantages.
These savings can be used to top up your pension, buy a primary residence, or provide an annuity in the event of disability.
Payments into the second and third pillars offer significant tax advantages and reinforce your pension provision for the future.
3. Real estate opportunities
The Swiss real-estate market offers a variety of investment opportunities, whether through direct acquisition of properties or investment in real-estate funds. Assess market trends and invest strategically for solid long-term gains.
You can use your bonus as a down-payment for a property purchase as a complement to a mortgage or opt for a Lombard loan.
Beyond simply investing your salary bonus, think about long-term financial planning. Set clear objectives for yourself, assess your financial situation regularly, and adjust your investment strategy to achieve your goals.
Request a complimentary wealth-check today
to thoroughly evaluate your financial and tax situation before making any decision.
