In view of demographic development, our pension system will be exposed to problems that are difficult to solve in the future. At retirement, the combined AVS and LPP pensions are supposed to cover 60% of the last income received. However, much has changed since 2002. At the time, the rate of return on second pillar assets was still 4% and the rate of conversion of pensions at 7.2%.
Today, the rate of pay is 1.5%, the conversion rate is 6.8% (2014) and, in the future, probably 5.8% for extra-compulsory services. Thus, for a retirement capital of 600,000 francs at the time, the insured now find themselves with a capital of 450,000 francs, the corresponding annual pension being reduced from 43,000 to 26,000 francs. Many individuals fail to consider this reality. A private financial strategy must therefore include the constant monitoring of old-age benefits and a corresponding adjustment of private retirement provision, with the aim of having a defined retirement income. Otherwise, unpleasant surprises could arise as retirement approaches. When it comes to the IRA then you will have to decide the ira contribution limits also.
The Right Financial Objectives
In financial matters, the golden rule stipulates that those who live comfortably on 85% of their income, devote 5% to their private retirement provision and save 10% to achieve their medium and long-term objectives, achieve their goals without any problem. purposes. Living conditions, as well as the economic and social context, are changing at an ever faster pace. In order not to deviate from the strategy pursued, financial coaching based on a professional IT platform and the competence of the council proves to be essential. Also get to know about the ira vs 401k.
- What could be more rewarding than achieving the goals that are important to us? Large financial means are often necessary to achieve this, means that it is possible to reach much faster than it seems a priori through targeted planning. No more obstacle stands in the way of our happiness… financial.
- In occupational pension plans, the minimum interest rate, which pays for retirement savings, fell gradually from 4 to 1.5% between 2002 and 2013 (it will be raised to 1.75% in 2014), while the rate conversion rate, which is used to calculate the level of pensions, decreased from 7.2% to 6.8% between 2005 and 2013.
For the Public Services
In the public service, several provident institutions have raised the retirement age and abandoned the concept of the primacy of benefits in favor of that of the primacy of contributions.
It is then based on a yield of 4% and an inflation of 3%: that is to say on a real yield of 1%. However, over the past twenty years, the average annual increase has only amounted to 0.7%, while the profitability of investments has decreased due to the turmoil that has hit the financial markets since the start of the new millennium and the continuing low interest rates.