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retire in switzerland

Many Americans are looking to spend their post-work lives abroad these days, and Switzerland is an attractive destination for a number of reasons. While it may not be as exotic as somewhere like Costa Rica, the beautiful scenery, high standard of living and plentiful English speakers make it a great spot all the same. However, retiring in Switzerland can get pretty pricey, and there are several details you’ll want to have nailed down before you buy plane tickets. Read on to learn all the essentials for a proper Swiss retirement.

Average Cost to Retire in Switzerland

The high cost of living is arguably the biggest knock against the prospect of retiring in Switzerland. It’s one of the most expensive countries in the world, especially in the major cities like Geneva and Zürich. Several cost-of-living indexes rank Zürich as the third most expensive city in the world, ahead of even New York City.

According to estimates from online surveyor Numbeo and international living website Expatica, a retired couple in a one-bedroom apartment can expect to pay almost $4,000 a month for rent, utilities, internet, food and healthcare.

To alleviate this cost, wages in Switzerland are also quite high. However, as a retiree, you won’t be able to benefit from that. Consequently, you’ll need to make sure you have enough saved up, and you may want to consider smaller, more affordable cities like Bern or Lugano.

How to Retire in Switzerland – Visas

Anyone who wishes to stay in Switzerland longer than 90 days will need to apply for a visa, although the process can differ depending on your initial country of residence. For U.S. citizens, you’ll have to apply for your visa through the Swiss consulate. If you’re looking to retire in Switzerland, you’ll want to apply for a type D visa, which is for long-term residency.

In order for your application to go through, you’ll need to prove a handful of things:

  • You won’t be seeking employment in Switzerland
  • You have health insurance and accident coverage from an approved provider
  • You have the financial means to support yourself in Switzerland without working
  • You can demonstrate a close connection to Switzerland

That last threshold is a bit fuzzier than the first three. You can usually establish connection by showing frequent trips to Switzerland or proving you have a family member already living there. Owning property in Switzerland can sometimes be enough, but not always. You should allow roughly six to eight weeks for the consulate to process your visa application.

Additionally, you’ll need to apply for a residency permit within 14 days of arriving in Switzerland. Switzerland is divided into 26 cantons, and each canton has autonomy over its own immigration process. The specifics of the application process will depend on which canton you wish to live in, but you’ll want to make sure to apply for a non-working residency permit.

Once you’ve lived in Switzerland for at least 10 years, you can apply for a permanent residency permit. You can also apply for Swiss citizenship if you wish, but that process is more complicated.

retire in switzerland

How to Retire in Switzerland – Taxes

Switzerland has a reputation as a tax haven, and that reputation exists for a reason. The country’s highest income tax bracket is taxed at only 17%. This is perhaps why it’s an attractive destination for the assets of the uber-wealthy. However, since you won’t be earning a lucrative income in your retirement, this benefits you a bit less than it does for the working population. Switzerland does consider pension income to be taxable, so you will have to factor that in.

Retirees moving to Switzerland have a choice in how they’ll be taxed when they arrive in the country. You can choose to be taxed just like everyone else, deducting a percentage of your income every month. If you wish, you can also choose to pay a lump-sum tax upon arriving in Switzerland. This option is available in all cantons except Zürich, Schaffhausen, Appenzell Ausserrhoden, Basel-City and Basel-Land. If you choose the lump sum, you’ll pay a larger amount upon entering the country that’s based on estimates of your living expenses. Very few people choose this option, but it could potentially save you money in the right circumstances.

If you qualify for a U.S. pension or Social Security benefits, there are few different ways you can go about receiving that income. You can transfer your funds to Switzerland, but depending on your individual circumstances, that may result in double taxation. You can also use your U.S. eligibility to arrange to receive benefits from the Swiss Social Security system, provided you meet all the requirements. Switzerland and the U.S. have a bilateral agreement that makes this possible.

With all of these tax concerns, your unique situation and circumstances will dictate the best course of action. Because of this, it’s always beneficial to consult with a tax professional before making any lasting decisions.

How to Retire in Switzerland – Healthcare

Health and accident insurance coverage is mandatory for every official Swiss resident. So, you’ll need to purchase it from an authorized provider in order to obtain your Visa and start your life in Switzerland. Prices can be vary depending on the level of coverage you purchase, the canton you live in and your individual health circumstances.

On the bright side, purchasing insurance gains you access to the Swiss healthcare system, which has an excellent reputation for skilled doctors, well-equipped hospitals and no waiting lists. For ways to find authorized providers in your desired canon, you can head to the Swiss government’s website.

retire in switzerland

How to Save for Your Retirement

Saving for retirement is something that can take decades for most people. The first step is always deciding what kind of lifestyle you’re looking for once you leave your 9 to 5. Once you know what kind of life you’re aiming for, you can start to determine how much you’ll need to save to get there. With at least a rough figure in mind, saving will be significantly easier.

If you’ve worked in the U.S., odds are you’ll be eligible for some type of Social Security benefit. If you’re a government employee or a teacher, you may have a pension income. To supplement this income, the most popular options are an individual retirement account (IRA) or a 401(k) plan. Some people also find success investing for retirement.

The most important aspect of saving for retirement is starting early. If you start saving when you’re young, then you will benefit from the effects of compound interest. That way, you won’t actually have to save as much because your money will have made money of its own.

Bottom Line

Switzerland is an attractive retirement destination for many. This is because of its breathtaking natural beauty, its location in the heart of Europe and its history as an extremely safe country. However, it will cost you a pretty penny to call it home. Especially if you want to live in a major city like Zürich or Geneva. If you can save up enough and navigate all the necessary logistics, though, you should consider a Swiss retirement, particularly if you’re fond of chocolate.

Tips for Saving for Retirement

  • A crucial aspect of saving for retirement is making sure your savings stays untouched. You may want to use the money in your 401(k) if things are getting tight, but you’ll end up paying for it down the line. An emergency fund can be a good alternative if you need some extra cash.
  • If the process of saving for retirement has your brain swimming in acronyms and deadlines, talk to to a financial advisor. SmartAsset’s financial advisor matching tool, can pair you with up to three qualified financial advisors in your area. All you have to do is answer a few questions about your financial situation. Then, the tool will do the rest of the work for you so you can get the help you need.

Photo Credit: ©iStock.com/Xantana, ©iStock.com/MarcusLindstrom, ©iStock.com/FamVeld

Hunter Kuffel, CEPF® Hunter Kuffel is a personal finance writer with expertise in savings, retirement and investing. Hunter is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. He graduated from the University of Notre Dame and currently lives in New York City.
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