They both work part time to have more time for their son and themselves. At the same time, married couple Raffaela and Metin Yildirim Gabriel realise that their reduced working hours entail less vested pension capital. They also opt not to pay in to the 3rd pillar, even though small savings contributions are worth making.
Metin Yildirim Gabriel works 80 percent on the late shift for a furniture store and his wife Raffaela also works 80 percent as a technical expert. They find working full time and spending time with their 6-year-old son Can to be difficult and undesirable. Raffaela would like to reduce her hours more.
The Gabriels are happy with the income from their part-time jobs. At the same time, more money would be nice as they share the dream of owning a home in Turkey. Nevertheless, they believe time off, family time and time for themselves are more important than anything else.
The question is: what standard of living awaits them in retirement? Neither Metin Yildirim nor Raffaela currently pays into the 3rd pillar or makes private provisions. Nevertheless, they know what a small savings contribution can mean for the family.
If you continue to forego private provisions, you may find the consequences severe when you stop working. Granted, if you work at least 60 percent, money is still paid towards your future provisions. However, as a result of your reduced working hours you pay less into the AHV and your pension fund. That also automatically means reduced benefits in the event of disability or old age.
Our tip: even small savings contributions are worthwhile
Part-time workers: make regular 3rd pillar payments – even if they are only small amounts. They can help you lead a self-determined life in retirement. Another advantage is the money you save on tax now, because you can deduct your 3rd pillar payments from your taxable income.
Unmarried couples should also take note that in the event of divorce, the pension fund assets are not normally shared. That means the partner with the lower income will also receive a lower pension. A common-law partnership contract is therefore advisable to set income levels in the event of separation.
Would you like to work part time as well? Find out quickly and easily what impact the reduced hours would have on your budget and on childcare.
What needs to be borne in mind?
It isn’t impossible to put by money even while working part time. Making private and occupational provisions allows you to save on tax: for a self-determined financial future.
Families in the part-time model
Working part time is popular here in Switzerland: more than a third of Swiss employees have consciously chosen not to work full time – mostly because they want to spend time raising their children, taking care of family obligations or pursuing education and training. In our series, young families offer a look at their lives working part time and tell us what the greatest challenges are.