Is saving at all worthwhile in today's low interest rate environment?
Monika Bütler: Yes, saving is worthwhile – for most people, at least. Interest rates are low, but anyone who wants to continue to enjoy living above the poverty line after retirement needs to save – even more so today than in the past.
What is your personal approach to saving?
FinanzFabio: In the low-interest phase, traditional saving has become obsolete. For me personally, 10,000 francs in my savings account is enough. With this I can pay my fixed expenses for three months. Everything beyond that I invest in low-cost ETFs (Editor's note: Exchange Traded Funds) However, I would like to point out that I have already fulfilled my dream of owning my own home and will therefore not have to depend on a large amount of money in the foreseeable future.
It's better to think about your money one day a month than to work a whole month for it.
What are your three very personal tips for saving for old age?
Monika Bütler: My number one tip is to work – at best even beyond the regular retirement age. Tip number two is to keep fixed costs low. And then, of course, contribute to pillar 3a, top up your pension fund from the age of 50 and, as a homeowner, reduce your mortgage.
Retirement provision is in a state of imbalance; the older generation's pensions are financed by the young: Are you concerned about the generation gap?
FinanzFabio: I take care of my own old-age provision and do not rely on the system. The older generation owes us young people money, they live at our expense. I wish I could have every cent that I paid into the AHV back in my account tomorrow and take care of my retirement provision myself.
As a mother of two teenagers, I am particularly concerned about the generation gap.
What topics around retirement provision concern you in general?
Monika Bütler: The problems of underfunding for retirement provision and care in old age are still underestimated. We are living longer and longer, and people also underestimate the resources needed for a longer life expectancy. After all, it is not just a financial question, but a social one. I ask myself whether not working for more than 20 years, and often becoming socially excluded as a result, really makes sense.
What are your solutions and visions for retirement provision?
FinanzFabio: My vision: Anyone who wants a child in Switzerland pays 7,500 francs into a share fund. The Swiss state pays in the same amount, giving you a capital of 15,000 francs. Assuming a conservative annual return of 7 percent, around 1.2 million will be paid out on retirement at 65. Even with a life expectancy of 100 years, the annual pension would be significantly higher than with the current AHV maximum pension. And the pension funds should definitely be exempted from negative interest rates.
5 saving tips
Take responsibility for your money with our five saving tips:
- Create an annual budget: Where does your money go?
- Consume consciously: What is really important to you?
- Set yourself a motivating savings target: The more specific, the better.
- Gather up your change: Empty your purse every night.
- Find allies: Make saving into a game and share tips.
We wish you every success!
Monika Bütler (born 1961)
Professor of Economics at the University of St. Gallen, specializes in the topics of social security, the labor market and political economy. For her, wealth means also being financially independent after retirement.
Fabio Marchesin (born 1987)
A financial planner, also known as the financial blogger FinanzFabio, wants to convey important financial knowledge to a broad audience in a simple way. To him, wealth above all means freedom. His motto: "It's better to think about your money one day a month than to work a whole month for it."