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It is easy to answer superficially the question of how much money you should have on hand: the more, the better. However, this is not very useful if you want to estimate whether the amount you saved is quite sufficient.
In order to classify this a little better, it is useful to look at the amounts accumulated by people of the same age. Data on this are available, among other things, from the SLIC survey; SLIC stands for Statistics on Income and Living Conditions. For this study, 8,000 households in Switzerland are surveyed on various topics every year. The Federal Statistical Office also collected data on assets from the 2015 survey.
Assets were defined to include Column 3a, as well as real estate, bank accounts, financial assets and valuables. The amount of wealth per capita was determined by data on the person with the highest income in the household.
From here, the average wealth per capita was determined. Anyone with exactly that amount of savings is richer than exactly 50 percent of their peers, but also less wealthy than the other 50 percent.
The following median assets were obtained for different age groups:
- 16,500 francs for those aged 21 to 25
- 27,000 francs for those aged 31 to 35
- 72,000 francs for those aged 41 to 45
- 89,000 francs for those aged 51 to 55
- 190,000 francs for those aged 61 to 65
The statistics were defined empirically, which indicates that the data are not completely certain. In a survey like this (done over the phone) most people may not be fully aware of their net worth. You usually get an overview of all your assets once a year, when you file your tax return.
We therefore compared the data with a study by the Statistical Office of the Canton of Zurich, which examined tax data for half a million households living in the Canton of Zurich from 2006 to 2015. Assets in Column 3a are not included in the tax data because they are not taxed as assets in the tax return. This makes the data slightly different from the SLIC data, but overall they are relatively consistent. According to tax data in the canton of Zurich, the average values of assets are as follows:
- Not more than 0 francs at 25 years old
- Approximately 25,000 francs at age 35
- Approximately 70,000 francs at age 45
- Approximately 100,000 francs at age 55
- Approximately 300,000 francs at age 65
In both data sets, the largest increase in wealth is seen between ages 55-65. According to tax data, average wealth triples from 100,000 francs to 300,000 francs; This alone is far from enough to get by in Switzerland. On the one hand, this increase is explained by the fact that people usually receive inheritance at this age. Additionally, after retirement, assets in Pillar 3a suddenly become taxable and become part of your assets. Pension fund assets withdrawn as capital rather than pension are also seen in the assets.
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This article was first published on the paid service of handelszeitung.ch. Blick+ users have exclusive access as part of their subscription. You can find more exciting articles at www.handelszeitung.ch.
Everyone who gets rich almost always stays rich
According to tax data, assets reach their highest level during the transition to retirement age and almost never decrease thereafter. This is an indication of the high level of security people have as they age. They don’t seem to want to deplete their assets. They also seem to invest their money well.
If you want to get to the top, you need to have more than 4.5 million francs in reserve. According to the tax statistics of the canton of Zurich, this amount made you one of the richest 1 percent. Today he will probably receive 5 million francs.
However, as the authors of the study note, getting to the top is extremely difficult. It is extremely rare for someone in the bottom half of wealth to break into the top 1 percent. This means that wealth mobility in Switzerland is significantly lower than income mobility.
A decline in wealth from the richest 1 percent to the bottom half is even rarer than an increase in wealth. This only happens one percent every ten years. The rich usually stay rich.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
