Switzerland is one of the most popular emigration countries for German pensioners. However, anyone who wants to survive there financially must be well prepared.
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Breathtaking mountain scenery, azure lakes, picturesque landscapes: Switzerland’s beautiful nature is attracting more and more German pensioners who want to spend their retirement there. According to a report by the German Pension Insurance, 27,663 pension payments from Germany were made to retirees in Switzerland each year. This makes it the second most popular emigration country for German senior citizens after Austria.
Another reason is obvious: almost two thirds of the Swiss speak German. This means that the language barrier – despite the differences in dialect – can be overcome in most cases with a little goodwill. The high standard of living also attracts many, as does the security: according to this, Switzerland is the sixth safest country in the world. The cities are considered clean and the health care is very good, with doctor’s appointments quickly available. In addition, it is never too far to the German border – an advantage for retirees who want to travel home to see their children and grandchildren from time to time.
German pensioners need financial cushion
However, emigrating to the Alpine republic has a big catch: Switzerland is the second most expensive country in the world, according to the . According to the , those who are considered poor in Switzerland are those whose income as an individual is less than 2284 francs per month. That is the equivalent of 2381 euros. For comparison: the median net income of German pensioners is 1947 euros per month, according to figures from the German Economic Institute. A large proportion of German pensioners are therefore unlikely to have enough pension income to be allowed to reside in Switzerland.
However, anyone who does not have sufficient income will not receive a residence permit in the first place: EU citizens are only allowed to live in Switzerland for longer than 90 days if they can support themselves. “To do this, retirees need a pension of around 48,000 euros net, or 4,000 euros per month. Despite emigration, statutory pensions continue to be taxed in Germany and paid out net,” says Jasin Isik. He is the managing director of the Zug-based financial advisory company SuisseKasse and supports foreigners with all questions relating to immigration to Switzerland.
In addition to income tax in Germany, there is also a withholding tax on the pension income of German retirees in Switzerland. The amount of this tax varies from canton to canton.
Health insurance: Emigrants must insure themselves
But there are reasons why the financial hurdle for immigrants is so high. For example, the price of health insurance alone can be a huge financial burden for people on low incomes compared to Germany’s statutory health insurance system. “Anyone who has health insurance in Germany has to cancel their old insurance and take out a new one in Switzerland,” says Isik. There, everyone has to take out what is known as basic insurance. The premiums are among the highest in the world. “You quickly end up dependent on the health insurance company, canton and insurance model, between 400 and 550 francs per month,” says Isik.
The health insurance companies must accept every patient regardless of their previous illnesses. The level of pension income plays no role in determining the premium. However, the basic insurance does not cover many things that are included in the German statutory health insurance: for example, operations outside the canton of residence, preventive check-ups with the doctor and cosmetic dental treatments. In Switzerland, the latter also includes fillings. For this, patients need private supplementary insurance, says Isik. Anyone who does not have supplementary insurance must pay for these services themselves.
However, private insurers can reject patients. It is therefore worth investing in several products and applying to several providers at once, says expert Isik. Prices for private supplementary insurance vary greatly, but you can quickly end up paying 60 to 70 francs per supplementary insurance policy: together with the mandatory basic insurance, this quickly adds up to costs of 700 francs, the equivalent of 730 euros. But that is not the end of the story: next year, Isik expects a further premium increase of six percent.
Increased cost of living, high rents
The cost of living in Switzerland has also become more expensive recently. Food prices in Switzerland are 20 to 30 percent higher than in Germany. The price of electricity has also risen, but is currently lower on average than in Germany: According to the comparison portal Verivox, an average family in Germany is paying 37.37 cents per kilowatt hour this year. The Swiss pay an average of 32.14 centimes, which is the equivalent of 33.52 cents.
The level of rent and property prices depends largely on the canton. Zurich, for example, is considered particularly expensive, while St. Gallen is somewhat cheaper. On average, Swiss people pay between 1,350 and 2,500 francs per month for their rent, depending on the size of the apartment and the region – that’s the equivalent of between 1,407 and 2,608 euros. Housing prices are therefore sometimes twice as high as at home.
Spending your retirement in Switzerland is not really an option for senior citizens with a small budget. On the other hand, it can be worthwhile for retirees with private assets, such as former self-employed people and private individuals. Unlike in Germany, there is no capital gains tax in the Alpine republic – capital gains on shares are therefore tax-free. “Even with investments subject to income tax such as renting and leasing, there could be advantages compared to the German top tax rate,” says Isik. Unlike a statutory pension in Germany, this would possibly be taxed via Swiss income tax, says the expert. Everyone should therefore have their own calculations made to see whether the move will ultimately be worthwhile not only for the beautiful mountains, but also financially.
Source: Stern
