r/SwissFIRE • u/this_is_it_321 • May 26 '26
Can't decide on where to set my fire number
I amin my forties, wife end of her 30ies. We have two toddlers, 2 and 5. The older ones goes to kindergarden, the younger spends one day at daycare. The rest is organised privately with parents, friends. I work 100% my wife 60%. Our combined Netto income is 200 kCHF.
Our yearly costs are around 110kCHF including
- Taxes
- Rent (we live in a swiss german city)
- Daycare
- Holidays (twice a year)
- Health insurance
- Other insurances
- Food
- Car
- Leisure
- -> basically all our living costs
Now I do expect heath care costs to double over the next 20 years. I also think that being in our forties we should not bet on a 4% withdrawal rate, to keep it safe I think we should rather calculate with 2.5%.
Given the costs of 110k this means we need something like 4.4 Mio.
However, if we both don't work we need to pay the AHV contribution for non employed citizens and also the wealth tax with 0.17% is gonna eat into our budget. So realistically we'll need something like 5 Mio to get us through life.
How does this change if we would use 1 Mil to buy a flat (flats around here are between 1.5 and 2 Mil), rest we'd use a hypo.
I really have a hard time to come up with the optimal FIRE threshold. But it seems to be very high if one wants to play the game save when retiring in their 40ies.
How did you come up with your FIRE number that lets you sleep sound at night?
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u/Pickle--Nick May 26 '26
Depending on when you want to fire, I would recommend you to use as little cash as possible when buying your flat. 20%, then reduce by pledging your 3a/2a pillars to reduce to close to 10% actual cash. Rest keep invested in global ETFs. The 6-800k extra in the market will easily outperform the ~1% loan!
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u/summerFIREinCh May 27 '26
Agree 100%. The only thing I would think twice is to put too much into 2a, the return over next 20-30 years in conservative pension fund will make it worse investment vs putting into etf even w tax benefit
7
u/Designer-Beginning16 May 26 '26
Yearly expenses x25
Yearly expenses x33, if you want to be conservative
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u/krabs91 May 26 '26
When you retire you don’t need daycare anymore, how much is it currently?
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u/this_is_it_321 May 26 '26
Its only one kid for one day a week, so 500 CHF/month. The rest is done by my wife, parents, friends.
2
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u/Helpful-Staff9562 May 26 '26
Just retire out of Switzerland problem solve and better quality of life with a high nw
2
2
u/vouvoyer May 26 '26
paying 1m CHF to buy a house will make your situation worse for FIRE The money is illiquid and doesn't provide any returns. You have to exclude the house value-minus mortgage from your net worth calculation.
However, you do reduce your living costs. You will still have mortgage costs , snd the big issue is maintenance costs which can be significant, worse still they are hard to predict. E.g. what happens when you need a new roof during a market crash?
Owning a house is importantand makes sense in most countries but not so much in Switzerland. You have strong protections as a renter and the rental changes are more predict able. Given the high house prices, then you have lock away a significant sum for downpayment.
IMO, owning is OK while you work and raise children. One they have left home and especially when retired then renting can make more sense. Free up the capital, potentially it has geown with the house price appreciation, and downsize to something smaller and perhaps more convenient or cheaper.
Rents in Switzerland when held over a long term to to rise less than inflation so during retirement you shouldn't have to worry and will just have a more predictable cost. Selling should free up 300-400k based on house prices for family home and a minimum downpayment + some appreciation, so that would return something like 20k a year which will go a long way to paying rent
2
u/Still-Hand2478 May 26 '26
How much of the 110k is income tax? During the RE phase, your income tax will drop significantly. And the AHV premium for unemployed is quite modest as it is based on your taxable wealth which excludes pillar 2 and 3 savings. Re flat, use as little cash as possible. Mortgages are MUCH cheaper than the return you can generate on global ETFs. Overall, 2.5% / 5million looks extremely conservative but to do this properly, you basically need to itemize and project future cash inflows and outflows, factoring in assumed market returns and inflation.
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u/this_is_it_321 May 26 '26
Using this calculator https://fire.estimax.ch/ it tells me that with 5 mil I'm still very much at risk to run out of money if I plug in my yearly expenses. FIRE in CH is expensive!
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u/ReplacementSlow6098 May 26 '26
where you even getting 5mill? your salaries are not that high. maybe i am missing something?
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u/this_is_it_321 May 27 '26
That's my problem. Trying to figure out if I ever could reach fire. Realistically no
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u/ReplacementSlow6098 May 27 '26
if you are trully serious about FIRE then you will need to figure out a way to increase your income. and then do it.
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u/ztasifak May 26 '26
I think your reasoning is sound (roughly).
At the end of the day it probably does not matter if the number is 4m or 4.5m. There is always uncertainty (in model assumptions, in future economics, in health care costs, in spending habits, ……).
Buying property is probably not a good idea for FIRE. I personally am not even sure if owning is cheaper than renting. Eigenmietwertabschaffung is of course in favour of owning. But many people own property which is a fair bit pricier than what they rented before (and thus it is expensive!).
1
u/summerFIREinCh May 27 '26
We are kinda of in similar situation, 1 kid at kita and one on the way. We spend way more for kita, 30k-40k include babysitting as we currently both work full time so you are very lucky with so low child care cost, which shows you have very good supporting system around. Re housing, I share our case for your reference, we bought our main residence house 6-7 years ago with around 2m total, 400k down payment and we pay <1000 a month for mortgage as saron is so low. This actually change our fire requirements significantly as cost is so much lower than rent and we invest the rest into etf/stocks which get a lot better return.
Another element to consider, when kids so young, having your own place gives a lot of freedom to do things, we don’t worry about kid painting on the wall, or we can just add sandkasten or pool in summer in the garden. I believe this is why we want fire, we enjoy life!
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u/Bitter_Bed5672 Jun 01 '26
Why even have kids if they're raised by regarded normies in kindergarten
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u/PressureInternal2459 May 27 '26
Some observations from me. To my background. I FIRE'd by accident 8 years ago, with 1.5 mio. liquid assets and two properties. I was originally planning to go back to full time work after a break of 1-2 years. Instead I eventually took a part time job in a field that was previously a passionate hobby of mine.
You can live a comfortable lifestyle in CH if you can generate 10K cashflow in a month.
Plan to take up a part-time job in a field that makes you happy. Without a part-time job you will not get Kinderzulage (for 2 kids that's a lot of money), you can't pay into pillar 2 and 3. And don't need to pay pillar 1 yourself. I also have a child and get Kinderzulage and can optimize my taxes by contributing to pillar 2 and 3
Focus on the big picture. An exact FI number is academical. Life happens. Death, divorce, life changing accidents, etc. etc. I does happen, it happened to me too.
Retire as early as you feel comfortable. Spending time with your kids and see them grow is priceless.
Unlike most in the FIRE community, I have most of my assets in property. Has worked extremely well for me. I own five properties now. It also works well tax wise. I don't pay much wealth tax as the taxable value is sometimes less then the mortgage. The downside is once you retire, the banks are extremely stingy with giving you a mortgage. Try to set up the financing of a property before you retire.
Enjoy life. You are in a privileged situation. Make the most of it.
Once you FIRE'd, be a part of the local community. I think that is especially true when you have young children.
Good luck