It's never too early to start thinking about your pension
Have you thought about your pension lately? If not, you are far from being alone. But as Wealth Planning Specialist Thomas Bamert explains, dedicating just a little bit of time to your pension situation can pay off in spades in the long term.
Conversion rates, annuity rates, 1e solutions… the world of occupational pension plans has a vocabulary all of its own and can seem daunting to the uninitiated. How is it that you came to work in this field?
Thomas Bamert: Before joining Julius Bear seven years ago, I worked on quite a number of pension-related projects for my previous employer. I really liked the complexity of the subject matter, but at the time never thought I would end up working as a pension specialist at a private bank.
Is the complexity you mention the reason that people tend to put off thinking about their pension situation?
People do indeed tend to put off addressing this important aspect of wealth planning. Not only that, many don’t even know the size of the assets they have in their second pillar or aren’t aware they should adjust their second pillar to changes in their personal circumstances. But I don’t think this has all that much to do with the complexity of the matter.
In Switzerland, we tend to place great faith in institutions and companies because there is a general feeling that they do things right. The same applies when it comes to pension funds. And although Swiss pension funds are generally very good, you should still make sure you understand and examine your situation, and that it corresponds to your needs as they change throughout your professional life. It doesn’t take a lot of time – sitting down with a pension expert once a year is enough.
Why should people be thinking about their pensions?
We are living in a time of lower performance and more uncertainty when it comes to pensions, so planning for the future is more important than ever. What a lot of people don’t realise is that you have options when it comes to your second pillar. For example, a standard pension solution doesn’t allow you to choose your investment strategy, but a supplementary solution gives you the freedom to do exactly that according to your risk appetite. And this opens up the possibility of increasing the returns on your pension assets. The second reason people should be thinking about their pensions is the tax side of the equation: the dividends generated from pension assets aren’t taxed until the money is paid out, at which point they are taxed at a lower rate. But you can also optimise taxes by buying into your pension fund or by planning for a progressive payout instead of receiving all of the assets at once.
What kind of people tend to come to you for pension solutions?
Usually we advise executives, entrepreneurs, lawyers, doctors and architects regarding pension and succession topics. But to be honest, people also approach us for a completely different reason, for example financing needs or because they are looking for the best way to transfer their wealth to their children. Because of our holistic approach to providing advice, we then sometimes identify an issue or potential for optimisation on the pension front and end up helping them in an area they hadn’t even considered before.
When do you recommend that people start to think about their pension situation?
You should start concerning yourself with your pension early on. I would say that 30 is a good age, because by then you have been paying into your second pillar for five years and so you have already accumulated some assets. It’s also important to start early because you have a few different possibilities when it comes to your pension assets. For example, if you want to buy a house, you can take money out of your pension to do so. The earlier you start thinking about your pension, the more options you have.
What aspect of your work gives you the greatest satisfaction?
I’m very passionate about what I do, and I really enjoy helping people feel comfortable about their retirement. For me, an important aspect of this is supporting you in taking control of your pension situation. One of the most rewarding things I experience in my job is providing advice that can solve a problem you are facing and make your life easier. And of course, helping you understand what you can do now to make sure you have a carefree life further down the road.
Are there any other areas that you can provide expert advice on?
Outside the realm of pensions, I am a bit more of a generalist. I do a lot of hiking in my free time, so I can recommend some beautiful routes around Switzerland. I often take a drone with me on those trips and use it to take photos and make movies – that’s something I’ve been doing since 2013.
Have you exhibited these anywhere?
[Laughs] No, I do it for me, for the memories, and sometimes I share them with my friends.
This portrait is part of the 'Wealth Architects' series in which we introduce you to our employees. All of them have practical tips and tricks in their area of expertise for you.