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Created on 02.10.2019

What is the right retirement fund for me? Comparing products pays off

You want to save up for when you’re older, and are eyeing up a retirement fund, but don’t know which one is right for you? One important distinguishing feature is the equity component. How much this is depends on a person’s circumstances, as these four examples involving Reto, Alice, Lisa and David also show.

Retirement funds currently provide scope for higher returns in the long run than vested benefit accounts and retirement savings accounts, where interest is paid. There are many different types of retirement fund out there so as to respond to the varied savings needs of investors. It is well worth carefully comparing them. It’s especially worth bearing in mind the equity component. At PostFinance, this varies between 25%, 45%, 75% and 100%. As a general rule, the more time you put into saving up and the greater your risk capacity and appetite is, basically the higher the equity component of your retirement fund can be. Reto, Alice, Lisa and David have already opted for a retirement fund. Find out what influenced their choice here. 

Why Reto decided on a retirement fund with a 25% equity component

Reto, 55, chef

  • Investor profile: cautious
  • Investment horizon: 10 years
  • Savings goal: financial security
  • Investment: investment fund with an equity component of 25%

“Before I turned 55, I realized that I should finally come round to thinking more about my retirement. AHV (old-age and surviving dependants insurance) and a pension fund already offer a tidy retirement sum, but I feel I could still add a bit more to the mix. I am self-employed as a chef and love to experiment in the kitchen, but when it comes to money, I’m more the cautious type. This is because it is really important to me that I am able to provide myself and my wife with better financial security when I’m older. Now our children have left home, I will be able to set aside a bit more money once again. I have also decided to invest some of my money, which is in a vested benefit account from back when I was employed, in a retirement fund. I opted for a retirement fund with an equity component of 25%. This means I can sleep at night, and I can also dream of a higher potential return.”

Why Alice opted for a retirement fund with an equity component of 45%

Alice, 59, psychologist

  • Investor profile: risk-taking
  • Investment horizon: 5 years
  • Savings goal: take opportunities
  • Investment: retirement fund with an equity component of 45%

“My name is Alice, I’m 59, I’m a psychologist and I live alone. A lot of people tell me: you’re getting really close to finishing work for good, and there’s nothing else you need to do – least of all when it comes to retirement. I have my own view, though. I have always been adventurous and a keen risk taker. Of course, I could have left all my savings in my retirement savings account 3a, too, but I do still want the opportunity to go just a bit further with my pension. And so, as per the motto “Nothing ventured, nothing gained”, I opted for a retirement fund with an equity component of 45%, and have invested some of my retirement assets in that.”

Why Lisa selected a retirement fund with an equity component of 75%.

Lisa, 44, nurse

  • Investor profile: balanced
  • Investment horizon: 20 years
  • Savings goal: have enough money for a few extras come retirement
  • Investment: retirement fund with an equity component of 75%

“I didn’t come round to the subject of retirement of my own accord. I’m 44, I work as a nurse, and it’s still 20 whole years until I retire. But my best friend keeps talking about how important it is to have enough money for when you’re older, and that you really should do something about your retirement. I mean, I have invested the odd bit of money into a savings account from time to time, but this hasn’t yielded any interest for a while now. And so, I went and sought some advice, and I was told I should open a retirement savings account 3a and invest some of my savings into a retirement fund. Of course, it would be lovely if this helped me afford a few extras when I’m older. To help me reach this savings objective, I opted for a balanced investment strategy and invested in a retirement fund with an equity component of 75%.” 

Why David opted for a retirement fund with an equity component of 100%

David, 28, project manager

  • Investor profile: risk-taking
  • Investment horizon: 37 years
  • Savings goal: not to make sacrifices in retirement
  • Investment: investment fund with an equity component of 100%

“I’m David, I’m 28 and I work as a project manager in a large company. Next year I will be taking on an international project, so I will have even less time to handle everyday bits and pieces. Seeing as my parents keep going on about retirement, I have now started thinking seriously about the subject. After all, it’s not really clear whether my generation will get any AHV pension at all in the future. So, I did some research online, and I came across retirement funds. I like the idea of a system where I don’t just stash the money away in an account, but rather the money actually works for me in some way. Seeing as I am a young, risk-taking investor, following a one-on-one consultation, I opted for a retirement fund with an equity component of 100%. If prices fall, this won’t be a major issue. This is because a long investment horizon will help me to ride out rough patches and wait for better times.” 

What is the right retirement fund for you?

Every investor is different, and the examples above reflect individual views on the subject. Any customer looking to invest should seek advice first. Irrespective of your investment horizon, every investment comes with certain risks that need to be considered. 

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