Is it possible to live well on a fixed and modest income in one of the wealthiest countries on the planet? I was about to find out. If you have ever been to Switzerland on vacation, you know that it is beautiful, clean, safe, but shockingly expensive.
At the age of 48, I had found myself suddenly and unexpectedly retired with an early incentive offer that I was thrilled to accept. At that moment, starting another career did not have much appeal. Instead, I wanted a shot as seeing what life could be like without working between fifty and seventy-five stressful hours a week. However, unless I found another job, I realized that I would be living on a modest annuity for another eleven years until I could access my 401K. My limited income played a central role in my decision about where to live for this not-working phase of my life.
At the time of my early retirement, I had been temporarily based in Zurich, Switzerland.
While Zurich was my top pick of a place to live because I was already there and somewhat aware of the laws regarding residency, Zurich always makes the top-ten list of the world’s most expensive places to live. I had some serious doubts that I could survive on my modest income in such an expensive city.
We have all read about how it is possible to retire in Central and South American countries on $20 a day, but not everyone, myself included, necessarily wants to live in a poor country if we could reasonably afford to live in a rich country.
Let’s face it, in undeveloped countries one is often faced with: crime; fear; begging; homelessness; unsanitary conditions; pitiful, ragged and malnourished children; and hopelessness. Some places are worse than others, but one should always find out which parts of cities to avoid to reduce the chances of getting mugged or even worse. On the other hand, living in a wealthy country one can usually expect: freedom to move about without fear of crime, virtually everyone lives in safe and clean housing with plenty to eat and wear and has excellent education and health care; the streets are sparkling clean, the children are adorable, well-fed and apple-cheeked; in general everyone is healthy, happy and cheery. After living in Switzerland for several years, I know of no place I would not walk alone at night and feel safe.
Naturally, there is no utopia or any country that is totally without problems, Switzerland included, but given a choice, I would rather live in a rich country than a poor country.
It is a matter of overall well being and more importantly, the luxury and freedom to feel safe. Maybe at another phase in my life, I will feel like volunteering to improve poverty in third world countries, but at the moment I just wanted to feel safe and secure.
The Swiss Residence Permit
Immediately I set out researching how to get a Residence Permit. The Work Permit I had while I worked in Switzerland was also the Residence Permit. But without a job, I needed only a Residence Permit, and I didn’t know anyone who had one except spouses of people who worked in Switzerland. Never for a minute did I consider living in Switzerland without authorization. I had heard stories about unauthorized people who had been shocked when the Alien Police banged on their door at midnight and escorted them to the airport. All the Swiss laws are geared towards knowing who lives where. At first, I had thought that was a bit like a police state or at the very least an infringement on privacy. But the longer I lived in Switzerland and experienced the orderliness, the safety and the security, I grew to believe that it is better to know who lives in the country than to not have a clue.
I had been in Switzerland long enough to know that they don’t just have laws, they actually enforce them, so I was taking no chances. In any case, the Residence/Work Permit is required to rent an apartment, get a bank account, buy a car, get a library card, and just about everything necessary to live somewhere.
Because the social benefits in Switzerland are so generous, and the rates of taxation are so low, many people would love to migrate to Switzerland. For instance, after working only six months in Switzerland, everyone is entitled to unemployment benefits of up to CHF 97,200 per year (at this writing, equivalent of $75,000 per year) for 540 days.
To maintain a high level of benefits for Swiss citizens and residents, who have contributed to the state system, the Swiss are very particular about who lives in their country.
Other than for reasons of asylum, it is theoretically possible to become a resident of Switzerland if a person:
Marries a Swiss citizen; Nix that – I didn’t know anyone to have a date with, much less marry.
Already has a work contract in Switzerland; Nix that – getting a job would defeat the purpose of being retired.
Is over age 55 with independent means; Nix that – I was not yet even fifty years old.
Is under age 55 with independent means and has invested directly in a Swiss company. Perfect! I received a modest retirement pension each month so I considered myself fitting nicely into the category of having ‘independent means.’ Actually, I rather liked the way it rolled off my tongue.
As I discovered, no government official would admit how much money one had to have to be considered ‘of independent means’. Nonetheless, I quickly got the message that unless one was super rich they need not apply. So, nix that idea, too.
Then to make the possibility of successfully getting a Residency Permit even slimmer, recent bi-lateral legislation was enacted to favour EU citizens over the rest of the world. Americans slipped further down in the stack. It was starting to look hopeless.
Why Continue to Try to Live in a Country That Did Not Seem to Want Me?
The answer is because Switzerland is simply gorgeous. The majestic snow-covered Alps can be seen from almost everywhere in the country. The many scenic lakes are crystal clear. The little chalets perched on impossibly steep slopes look exactly like a music box I coveted as a child. Even the milk-chocolate coloured cows grazing contentedly in the meadows are picturesque. The whole country is a living postcard and I wanted to be in it.
Furthermore, Switzerland is a healthy place to live in Only scant amounts of chemicals or engineering are allowed in the food sources, if at all, and there is no pollution. Health care is of the highest quality and remarkably caring on a personal level. There are no HMO’s – only private physicians. Health insurance in mandatory for everyone; but it is private instead of nationalized, although it is heavily regulated to be affordable. My monthly premium costs about $200 per month for coverage of health care, including medical prescriptions. Unbelievably, spending a couple of weeks at a spa would also be covered.
Another reason I was not willing to give up trying was that one of my great passions in life is travel. Being located in the middle of Western Europe is absolutely ideal for travel to far-flung places like South Africa, China or Russia. The fascinating Eastern European countries that have not yet become over-touristed are only short flights away. Closer to home, Austria, France, Germany, Liechtenstein and Italy are merely day trips. Without sounding pretentious, I can say things like, “Shall we pop down to Italy for lunch?” or “I am out of hand crème, I think I’ll dash over to that little shop in France to pick some up.”
Add to all this that Switzerland is extremely safe, clean, friendly, and English is accepted. The public transportation is relatively inexpensive, reliable to the minute, and covers the entire country. One does not need to own a car in Switzerland. In a nutshell, Switzerland functions as well as an expensive Swiss timepiece and has perhaps the best infrastructure and quality of life in the world. And not just for the rich but for basically everyone.
After exhausting all other possibilities for obtaining a Residence Permit, I finally ended up founding a small consulting company. Founding a company proved to be relatively easy to accomplish, not terribly expensive and had some interesting tax benefits. However, the company has to be a legitimate business, pay taxes and such, so this solution would not work for most people.
Although, finding employment in Switzerland is possible, and in particular for specialists. Naturally, it would improve a person’s chances if they spoke German or French. But I do occasionally see advertisements seeking English speaking employees at Nestle, for example.
Even if you don’t live in Switzerland, an interesting possibility is to visit Switzerland for three months as a tourist. No visa must be obtained for citizens of most countries; it is the entrance date into Switzerland that is proof. There are lots of fully furnished apartments available for short-term rentals at reasonable prices that would cost only a tiny fraction of what a hotel would charge. Many Swiss take really long vacations every now and then, up to a year sometimes, and they like to rent out their apartments while they are gone. You can make an arrangement through an agency or by getting in contact with the ex-pat community to learn about private sub-leases.
The Swiss Cost of Living
Once I had the authorization to live in Switzerland, what remained to be seen was whether it would be possible to live in such a wealthy country on a modest pension?
What I discovered was that living in Switzerland is actually quite affordable. To begin with, social and income taxes are less than in the USA, for example, and significantly less than in other EU countries. Sales taxes are the lowest by a wide margin in Western Europe.
Most people in Swiss cities live in apartments their whole lives, and rents are on the high side. I pay CHF 2100 for a two-bedroom, bath-and-a-half apartment with a parking space in the garage. On the other hand, utilities are cheap. Restaurants and groceries seem shockingly expensive at first, but one adjusts by eliminating waste. Instead of driving to a grocery store every week and loading up the car trunk and back seat with purchases, I walk to the store a couple of blocks away with my rolling cart.
When you carry home what you buy, you buy a lot less. Now that I am shopping for fresh groceries two or three times a week, I never throw food out anymore. Food doesn’t have time to sit around in the refrigerator long enough to become boring or out-of-date.
Even though the cost of living is high in Switzerland, I simply do not spend as much as I would if I lived in the USA. Not having access to so many consumer goods on such a wide scale basis does have its merits. There is less temptation.
In Switzerland, we are not harangued with endless marketing schemes. The Swiss do not tolerate bothersome unsolicited telephone calls, so companies know better than to make them. We can refuse to receive junk mail and the refusal is respected. The TV stations have only a couple of commercials once an hour or so. And the long-distance companies don’t offer chances to win a car and when you fill out the form, you have unwittingly changed carriers. It is refreshing to live in an environment where people are not bombarded with suggestions to consume more.
The way I ended up living and retiring in Europe is not a road map for anyone else to follow. It is just one woman’s story. I am the first to admit that I was lucky to be in the right place at the right time. But my situation does show that it is possible to live quite comfortably on a small fixed income in a wealthy country. True, for people who are not millionaires it may be harder to get residency than in poor countries, but with creativity, research and perseverance it is possible. For example, I heard recently that anyone who could prove they had German ancestors could get a five-year residency permit.
Certainly, there are lots of cheaper places to live, but one does not have to live in an impoverished third world country in order to live well. When one considers the freedom to be safe and secure, and the quality of life, my money is on Switzerland.
Living and Working in Switzerland, by David Hampshire
http://www.xpatxchange.ch one source for short-term furnished apartments
http://www.isyours.com/e/immigration/programs/study/index.html Provides immigration service for the rich and famous but also has useful information for the rest of us.
http://www.switzerlandtourism.ch Official tourist information
By Bonnie Burns