Home ownership for retirement

Thanks to the option of early withdrawal from a pension fund, the approaching retirement is an ideal time to take another close look at buying a home. Not only because it gives you the chance to consider where you’d like to spend your retirement, but also for financial reasons. Anyone considering such a step would be well advised to start looking into it well in advance.

There are countless reasons to spend more of your well-deserved time in the beautiful Grisons mountains after retirement—and perhaps even to live here permanently, in the very place where you’ve spent so many mountain vacations. Those who have always lived in the region may simply be looking for something new that better suits their retirement lifestyle. Perhaps a lovely condo without a high-maintenance garden, or maybe a home with more bedrooms so that children and grandchildren can visit at any time. Regardless of whether you’re considering a primary or secondary residence, the question of financing always arises. Unfortunately, certain deadlines apply to the early withdrawal of retirement savings. If you’ve missed these deadlines, you can no longer use your pension fund assets in full to purchase a property until your last day of work.

Your opportunity: early withdrawal of your BVG assets

When you retire, you can have at least 25 percent of your accumulated retirement savings paid out. Depending on the pension fund, a larger portion—or even the entire amount—may be paid out. Many pension funds today are happy when people choose a lump-sum payment instead of a pension. However, there’s a major catch: There are always application deadlines for this early withdrawal, which can be as long as three years. If you miss this deadline, you can no longer insist on a lump-sum payment. Therefore, it is clearly advisable to clarify several years before retirement what options you have and how the rules apply in your specific case.

More attractive than a pension for tax purposes

Anyone who chooses to receive a pension will pay the full amount of income tax on it for the rest of their life. This adds up over the years, so it’s worth reviewing the payout options, regardless of your future plans. If you decide to take the lump-sum payment, income tax is due only once—in the year of retirement. This is regardless of other income and is subject to a preferential tax rate. This tax rate is regulated at the cantonal level, and in the beautiful canton of Graubünden—especially for large BVG lump-sum payments—it is significantly lower than in cantons such as Zurich or Ticino. Moving to the Engadin, the Surselva, or Davos, for example, upon retirement is therefore a wise decision—and not just because of the stunning natural scenery, the fresh air, and the many sunny days.

Your further advantages

Those who are in the fortunate position of not having to rely on their monthly BVG pension therefore have the freedom to decide what to do with this capital. You can hardly go wrong by purchasing a property in Graubünden, a dream region that is known worldwide and widely appreciated as a tourist destination. After all, homeowners not only enjoy tax advantages, but they also have the assurance of a secure investment and the priceless pleasure of being able to spend their lives within their own four walls for as long as they wish.

Take your chance, talk to a Real Estate professional

Since not only does the early withdrawal of BVG savings require careful planning, but the search for a suitable property—and perhaps the Sales of an existing one —also takes time, it is advisable to consult a specialist early on.

We will be happy to advise you on your living situation.