Julia Tatje: couldn't help but wonder what would change if financial planning felt less like a threat and more like something you actually understand. Maybe not perfectly, but just good enough to feel safe. So many of the people I work with at Tuxom are incredibly capable. They move countries, build careers, they negotiate salaries most people only dream about. And yet, when it comes to their finances, there's often... this quiet tension. sense that they should have a plan but aren't quite sure where to start. Because financial planning has somehow been reduced to products, pension plans, investments, returns, when in reality it's much closer to building a house. And today's episode is about what happens when people start with the roof before the foundation.

Nadine Hunkeler: The

Julia Tatje: That's why I'm especially happy to welcome Nadine Hulmkuller, founder and CEO of Finance Phoenix. Nadine is a certified financial planner and someone I trust deeply, not just professionally, but philosophically. both work with international clients. We both believe that good advice is holistic. And we both know that taxes, pension, liquidity and risk don't live in separate boxes, even if people wish they did. Nadine, I'm so glad you're here. to tax in the city. let's start at the beginning. didn't wake up one morning and think, wow, I'd love to explain financial planning to international living in Switzerland. Or maybe you did. didn't? So how did you get into this field? And what was the moment where you thought, okay, this is actually important work?

Nadine Hunkeler: Thank you. Thank you for having me, Julia. I didn't. the important? This is funny because I obviously started exactly the wrong way around, and that's how I learned. So I started...

Julia Tatje: tackling

Nadine Hunkeler: tackling this topic in my very early 30s. Back around, you need to know that I at that stage as well was a daughter and still am a daughter of a banker that basically worked in banking for 65 years. Many people never work as long, but he was in banking for 65 years. He was an asset manager.

Julia Tatje: for

Nadine Hunkeler: My brother's an asset manager. My cousins are in banking. Yes, it runs in the family. But I...

Julia Tatje: everyone's in the family. yourself, you mean? Okay.

Nadine Hunkeler: Nevertheless, although I studied also and I have a study degree not in finance but in a related area, initially, a Bachelor of Science and a Betriebsökonom and so did not understand on how to do this. was running around, I was working for Ernst & Young for about eight years. I eventually started working in banking, actually, after I started to tackle this topic. And I was running around and really did not understand this entire ballgame of how to do this. And I had this epiphany moment where I was sitting there thinking if I don't understand it. And I have had education in this to certain extent at that stage, right? And I had the entire family set up where you would have assumed that I would have probably been taught about all of this. Who should? understand it if not me, right? And I definitely started the exact opposite way of what I teach today because I had a lot of epiphanies along the way because I started to invest in startups. I started to invest with like venture capital. I started then going into CliTOs. I literally did it the exact opposite way of what I teach today. And it's not, didn't, I fell on my face a couple of times and then I learned about ETFs.

Julia Tatje: I

Nadine Hunkeler: It allowed me to then understand that I really needed to understand this topic and I couldn't just rely on the men in my life. But I needed to grasp topic holistically so that I could set myself up for future success permanently. And therefore I then ventured into a rabbit hole of education and I did Finansperat, the financial planner, certified financial planner education. and really dug myself into the topic so that today I know exactly what I'm doing and I know exactly where to start and how to set clients up. And because I think me and also my colleagues, we've come from a different angle to this topic, not the traditional way of financial planning of other people's financial planning class. We do things a little bit differently and more holistically because we believe that the topics belong together. and we don't stop at financial planning, but we do help in the execution part of things as well and make sure that they understand what they're doing and they actually have done it. So that it's not just paper work and graphs and Excel sheets that they don't understand, You need to understand if you tweak here, what's going to happen at 65, what's going to happen long term. And if you don't see that, why would you do it? So you need to see that. I

Julia Tatje: I think a lot of people have this, I'm going to sort it out later mindset, because they don't really understand, because they have beliefs about, I can't do it, or I won't understand it anyway. I'm working in communications, how should I know about investments or even worse, I'm a woman, I can't do it. not good with numbers, a classic. Yes. Yes. Yes, and you hear that from women who have impressive careers, like smart women.

Nadine Hunkeler: Knock it with numbers. My husband is handling it, my father is handling it. I've heard that at any stage of a woman's life, quite literally at any age. And I'm like, you know, you've kind of grown up now since a couple of decades. Yes.

Julia Tatje: shouldn't hide behind all those wrong beliefs or a nail in their life and just rely he's going to do it. So I think of us look at things not like, okay, this is a tax case, is a pension file, but it's more like a whole life with moving parts.

Nadine Hunkeler: And dreams and goals and making sure that they actually accomplish those.

Julia Tatje: Yeah, and it's not about the boring stuff. You won't hear us talking about taxes and investments all day, but it's how do you want to live? And then it comes to the question, how do you want to finance that? let's build things to actually serve your dreams.

Nadine Hunkeler: How do we structure it so we get there? So let's exactly. have. The biggest one that they don't do it.

Julia Tatje: What is the biggest mistake from your point of view when it comes to financial planning, especially here in Switzerland? I'm sure you have.

Nadine Hunkeler: They don't do it. They don't understand it. I wonder how many people out there actually understand what a financial planner does. And I like to explain it in this manner where people understand what it means. So it's about risk management. It's about personal risk management. So understanding that you have...

Julia Tatje: members. Okay. So

Nadine Hunkeler: on one hand knowledge in areas and on the other hand you lack a lot of knowledge and therefore how are you supposed to set yourself up for success if you don't even understand it and you don't know what the missing pieces are. So just making sure that the people understand what financial planning is in the

Julia Tatje: it. Yeah. And you about.

Nadine Hunkeler: first moment and that financial planning isn't for the rich.

Julia Tatje: Yeah.

Nadine Hunkeler: You need to start early on to do it because it's about risks in different life circumstances. Financial planning isn't just about retirement planning. So 65 plus, it starts a lot earlier with any kind of risks that you may have protecting your loved ones, making sure that you're protected in any kind of situation. So yes, it's a lot more serious than that. Julia, you and me, I think we come with lot of humor and a lot of pinkness. We like explaining things in a fun way because this topic is so dry.

Julia Tatje: In inaccessible way.

Nadine Hunkeler: I love using a lot of imagery because it just allows people to actually understand better and to grasp the concepts and incorporate them easier in their lives.

Julia Tatje: life. I started having a Gucci shoe in one of my presentations that got my attention of at least the women in the room. End of the men because they were like, what does this Gucci shoe have to do with taxes?

Nadine Hunkeler: Yes, make it. I need to see that presentation.

Julia Tatje: you need to get that Gucci shoe, it's pink of I can see lot of the financial data of my clients. optimize taxes, maybe with my help, they not have cash in their bank accounts, or they only have cash in their bank accounts. So there's extremes. I do have clients that have no idea what to do with their money but are good at saving. So I can see a cash portfolio of 600,000 with zero interest,

Nadine Hunkeler: extremes.

Julia Tatje: which is really sad. And then on the other hand, I see people that earn 600,000 but only have 10,000 in their bank account, which is... even more sad if you ask me. I also ask people, did you ever have a look at your Pension Fund certificate? Which I understand because the way it's written, it's not made for... regular people, it's not made for consumption, it's made for like, put it in the drawer and forget about it. So I point that out a lot there is one element in the Pension Fund certificate that most, especially internationals, aren't even aware of that I think is a crucial one, is the disability coverage.

Nadine Hunkeler: Yes, that's a really nice one. If you need it, obviously, very nice. So that's the stuff that I'm talking about when I'm talking about it starts today and not just at 65 because those are the... You have a risk of disability. In financial planning there are three risks that you're mainly trying to account for and trying to mitigate. It's disability, death, retirement. Now, which ones are the ones that are going to happen? Most likely. Well, that's for sure. At one point at least in the current times, yes, who knows what's going to happen. Most of us will die.

Julia Tatje: I mean, there's people discussing, do we have to die? But let's assume yes.

Nadine Hunkeler: I probably prefer that option. Then there's the retirement, which does not

Julia Tatje: Then on if you

Nadine Hunkeler: come to everyone. It depends on if you like your job and how much you like it and if you're probably an entrepreneur or not. And also per when you're deceased. It's very morbid, my job, honestly. But it's what it is. And then disability. And there's statistics out there, I'm sorry I don't have them in front of my head, that I think it's about 40 % of people in the working force are on stage to become disabled. It's like really crazy high. And we're all not aware of that. And most people anyway, with all of these risks, apart from the retirement risk, they don't want to talk about it. They don't think it's going to happen to them. That's not going to happen to them.

Julia Tatje: If I don't look at it, it's not going to happen. It's water. works.

Nadine Hunkeler: It's not there. It's the pure voider. But that's not how life works, sadly. Open the papers, 20 minutes, have a look at the headlines and you'll see that death comes creeping up on us, all of us. And if it hits in the wrong moment when you're not properly prepared is an interesting word for it because you don't obviously want to...

Julia Tatje: should It's going to be bad anyway. Yes,

Nadine Hunkeler: be prepared and you don't want to, but you do, you should mitigate that case. You should mitigate that scenario. You should think through it and have a plan because if it does happen to you, you don't on top of it, especially if you're married or children, yes, you don't on top of it also want to have the financial burden of not knowing if you can stay in your house of how like you're going to be paying your bills, the accounts being blocked. Like you don't need that on top of having to grieve your loved ones. of the language or the way to go back to that case. it's bad enough. What people don't understand in my opinion, they look at the three pillar system as in these literally three pillars that are next to each other. But what they don't understand is they're different musicians

Julia Tatje: deal with the fact that you yourself are disabled or face some level of disability or whatever. That's bad enough.

Nadine Hunkeler: that do an

Julia Tatje: A

Nadine Hunkeler: orchestra together, they play music together and they interact with each other. And some of them are limited and it's all depending on how much you've contributed. A lot of people also have this very naive belief that it's just going to pay for them and it's going to be enough, very naive belief. But that's not how it works. It's how much you've contributed. Also, if you were eligible for it or not, also in the second pillar, are you eligible to be paying in in terms of are you going to then get out savings as in retirement from it, if you're below the 22,000, 23,000, it depends always a bit on the offer that moves, Then you might not even be eligible. And that eligibility, especially if you're talking about more high earners, you have these cases where it caps at a certain level at 148,000. It caps if a disability case comes into play. and they don't have those super lateral accident insurances for example that go upwards. And if you have a case of someone that has 400,000 francs of income and it is set up correctly, the accident case and disability due to accident can look really damp. And if they have certain commitments for payoff of houses and so on and so forth and they do need the salary level

Julia Tatje: they Yes,

Nadine Hunkeler: that they are currently earning in order to sustain that set up, then that can look really dark. And that's a threat, risk, personal risk that you can mitigate, but you can only mitigate it if you're aware of it. Therefore, looking at your situation and understanding it and then understanding your options is

Julia Tatje: I think awareness is the key word here.

Nadine Hunkeler: extremely important. it. it. Not at all. But you should know

Julia Tatje: I have so many discussions with experts like you, also in other fields. We always end up with same thing, awareness. Because once you have the awareness, you might find out everything's fine. We don't say that every situation out there is bad, at all. But you should know. how the situation is and you potentially get into the situation and out of it and who else is affected, who will pay, how much, for how long. maybe everything is set up perfectly. It's well possible. It's very possible and it's even probable in Switzerland because a lot of employers are insuring, end it's insurance, they are insuring their employees to a very high level.

Nadine Hunkeler: And maybe everyone can say that. Yes, very possible. It's very possible and it's even probable. Because a lot of employers are insuring, because in the end insurance, they are level.

Julia Tatje: but there's also very greedy employers out there at first sight pay nice salaries, but if you have a second and a third look the accident insurance pension fund, you will find out they are doing just the bare minimum save on their share of the contributions. there might even be a good reason to take on such an employment the overall package is so fantastic or you just love the job. There are good reasons for almost anything, you need to be aware. you then need take additional steps ensure yourself.

Nadine Hunkeler: Correct. And the case that almost always has a gap is the case of disability and due to sickness. Because the system was built in 1930ish mostly, system was built. Meaning to say we were in war times. And therefore people were dying not of sickness, but of accidents. So the accident case is actually fairly well covered, usually as I said, for people earning above 148,000, I would nevertheless have a very close look at that as well. And also the case of inability of just generally...

Julia Tatje: unemployment.

Nadine Hunkeler: So unemployment is also an interesting case because that also has an interesting caps in is different because it is capped a lot earlier and people weren't in that times when it was set up, they weren't dying due to sickness. They were dying due to accident or and therefore it's very different situation that we have today where we more have crisis of sicknesses. due to whatever nature they may come from, but that is more prevalent today and people are not aware of it.

Julia Tatje: estimate the probability of an accident towards a disease. minority that is due to accidents. absolute majority is due to diseases.

Nadine Hunkeler: like Long COVID at this stage is a topic.

Julia Tatje: That also includes, and a lot of people don't have that on their mind, also includes the psychological diseases like burnout or whatever.

Nadine Hunkeler: But the ones that are maybe more common that people also forget is cancer. I mean, if you have cancer, if you're going through chemo, you're likely out for it. And that's where a lot of people underestimate this disability as part of the system. Yeah.

Julia Tatje: There's always this assumption, I'm employed, like my employer will pay for me. Yes, but to which extent and until when? It's the major question here. It is very worth paying attention to this a lot. What

Nadine Hunkeler: You are mitigating your personal risks. Also, if you land in hospital due to accident and you're unconscious, what documents are in place? Who is taking care of your legal situation? It's not just the fact that you might want to have a living will where you define what actually happens to your body, what you're okay with, what you're not okay with, and that obviously needs updating, but also generally, forzograftrock. So understanding... who is taking care of your legal and administration matters. And we grown-ups, we always think, well, yes, you know I'm married. Or like, I'm a grown-up, it's my parents, which is absolutely not the case, people that are single. It's not just your spouse suddenly. And actually, even if you're married, it's not your spouse because there needs to be documents. Your spouse, even if you're married, is not allowed to open your letters.

Julia Tatje: The department that steps in for people that can't take their own decisions, whether it's the minors or people that have a health issue or whatever.

Nadine Hunkeler: And a lot of people do not know that KISS comes into play there. It's the Kinder- und Erwachsenen-Schutzbehörde. So the child, children and grown-up adult Schutzbehörde. German. Exactly. If they're unconscious, in coma and so on. So they step in and it's there. It's actually...

Julia Tatje: How do you say... need to approve it. Yes, they need to approve it. is a good thing in the end because they're just protecting because you can't take decisions yourself. have bad reputation. But a because

Nadine Hunkeler: their obligation to step in, it's not optional. And if there's documents in place, they will read those documents and then will allow another person possibly to take over. it's up to their, how do you say? Yes, they're protected. They have a bad reputation, let's face it. but they have very bad reputation, but they're doing their best. also have lot of cases. So let's

Julia Tatje: approval and so on. And some don't. Some don't.

Nadine Hunkeler: make it easier for them by having our legal situations mitigated and have those documents in place. And that's also part of a financial planner's job to show these kind of areas that need mitigation and help them set it up and help them find the right contacts that can also help them do these documents. Some of them need the notary approval and so on. Some don't.

Julia Tatje: Yeah.

Nadine Hunkeler: Of course not.

Julia Tatje: you have stories. You have been doing this for quite a while. You meet so many different people. I'm sure you have some stories. Of course, no names. None of Nadine's clients need to be afraid. You're not going to be exposed here. So, tell us.

Nadine Hunkeler: So I have a client and he's an accountant. He has his own company. He's the husband or to-be-husband of a client of mine as well. So I take care of him. And you always look at the holistic situation because if you're married or about to get married, your situations influence each other. Even if you're a concubinage, your financial situations may influence each other and they need coordination. So he's an accountant.

Julia Tatje: both of them. And you

Nadine Hunkeler: by profession dealing with finance. Oh, that's another topic.

Julia Tatje: He So he should know. Corporate finance. Yes.

Nadine Hunkeler: he is mid 50 at this stage. And I said by profession dealing with finances. You think he should know? I would suggest you should know. Yes, it's not his field. And that's the other story. It's not his field. is personal finance is a very different field than accounting for corporates. And he does not have a 3A. He does not have one 3A. He's earning above 136,000 a year. More in the range of 200 and plus. And I said he can also influence his pension zone set up completely by himself because it's his own company. So, yes. So you would think that he would have this under control.

Julia Tatje: Yeah, he can choose the plan. he does that.

Nadine Hunkeler: And although I've told him several times and I'm always pestering him mainly in November, December so that we can somehow get it in the financial year and the tax year, I don't think until today he has a 3A. I don't think he has his 1E set

Julia Tatje: in

Nadine Hunkeler: up. He ain't buying into his 1E, which is part of the second pillar, which I very belovedly usually refer to as 2C because that would make a lot more sense in regards to naming. of that pillar, he buys into 2B, so the second pillar, and that is not invested in a manner that would match his time horizon, in my opinion. It's just he could have done so much more with all that money that he bought into the 2A, in the 2C pillar and in the 3A pillar, which would have,

Julia Tatje: It's just,

Nadine Hunkeler: as you very well know, deduced their taxes significantly and had so much more performance on the money.

Julia Tatje: know,

Nadine Hunkeler: Yeah, and I'm just talking to a brick wall when I'm trying to tell him this and he's just not listening.

Julia Tatje: So what do you think, what keeps him from getting some action and changing something? What is it? It's a miracle.

Nadine Hunkeler: Honestly, I have no idea because I have tried everything. Yes, I am talking to a brick wall. I've reached a moment where I've given up. did, however, ask his fiancé to once again, because she's really interested in these topics and she loves the content that I've created. She's understood these topics now as well. now that she's more educated,

Julia Tatje: one

Nadine Hunkeler: last year really made sure that she really understands these topics. I really hope that she's going to manage to get him to do them. But also we're running out of time with him because we are going towards 65 and therefore the time horizon of his investment horizon is becoming significantly less and therefore we are anyway not able to take as much risk anymore in the 1E.

Julia Tatje: So to everyone listening, it's too late. not too late get something in place, even if it's late in your work career. But the earlier you start, the easier and with less downsides it comes. it is actually worth tackling the issue, even if you feel like, no, no, no.

Nadine Hunkeler: It's not too late Yeah, and it's funny because this is really something that I can see with expats a lot. So the second pillar, is too well marketed. has too good of a reputation. And the 3A, probably, although a good reputation, could be marketed even stronger. So you see a lot of experts that come to Switzerland, understand tax through second pillar buy-ins, and they do them too early in life, in my opinion. As I said, we do need to

Julia Tatje: and so on. Yeah, or if someone plans to leave Switzerland shortly, then early buy-in might totally make sense. Yes, exactly.

Nadine Hunkeler: differentiate between the second 2B pillar and the 2C pillar, the 1E. We need to differentiate there. We also need to differentiate in regards to what the dreams are regarding possibly buying houses and so on. Yes, exactly. It's always a proximity of when you're going to be pulling out the money that is important. And if you're going to be eligible to pull it out at that moment. It depends. many people in

Julia Tatje: Yes. So there's not a simple answer. can say that. It depends. Like everything in Switzerland, depends. This time not on the canton. So when it comes to, yes, my clients love a good tax deduction because there's not too many around in Switzerland. We are quite limited with that. But it's not always worth taking this short-term gain of, yes, but I reduced my taxes by 20,000. Yes, maybe,

Nadine Hunkeler: to that.

Julia Tatje: but you might end up paying 30,000 later on. Exactly. There's not even talking about that. But if you include that, there might be an actual damage through this.

Nadine Hunkeler: on. And you've left out the entire performance of that money just to get... we're about that, to it.

Julia Tatje: for your colleague it might be the perfect idea because he has the plan to build a house in two years he wants to actually withdraw the money then it could be a very very clever idea.

Nadine Hunkeler: years Yes, I can assure you that that's not the plan.

Julia Tatje: You are anxious for someone else.

Nadine Hunkeler: Therefore, get upset in a nice way. I have this word that I've created. I call it Fremd Anxiety. It comes from the German word Fremd Schämen. it's like, so I'm anxious for someone else. And I get that so often. And it's not actually pretty, but I just try and make sure that they understand when I get... when I have that, why I feel like that so that they understand, okay, because I care about people, care about their situations, I care about them understanding the topic so that they can mitigate their risks. It is a question of empathy, yes.

Julia Tatje: It's a question of empathy, honestly. I think a lot of people aren't really careless, but one thing they are busy because they have this busy career and yes, we all got a lot to going on in our lives. Plus they are optimistic, which a good thing to be optimistic, but they are overly optimistic and they are in denial of certain things. Yes.

Nadine Hunkeler: Yes, in avoidance of tackling the topic. I mean, this is a topic that you also know, and we've just spoken about it earlier. A lot of people think they don't have the time. And the problem with that, we're talking large scale, I always say bang for the buck. So you want to get enough performance on your money. And the longer you wait with tackling investments, with tackling, you just are letting go of that bang for the buck that you should be getting. that's not something that I can reverse ever.

Julia Tatje: Yes.

Nadine Hunkeler: And that is something a lot of people then come and have the feeling they need to start tackling investing later on. And or we can just push this back. I don't have time now.

Julia Tatje: And

Nadine Hunkeler: sentence will cost you a lot of money in the long run because the earlier you tackle it, the more bang for the buck your money can make for you. I always say there's two different people running around out there. There's the people that are working for money and that there's the people that have understood that the money also needs to work for them. There's those two breeds and the ones that are in denial and so on, they fall into the first pot usually and they are not yet really knowledgeable and actually acting aligned to

Julia Tatje: So we were talking about like why is this whole thing like a house? I have the impression that

Nadine Hunkeler: also future self, know, that future self is probably set up. So most of them are like bucket one when they come to us and then they are moved by us to bucket two so that they can prosper going forward.

Julia Tatje: more and more... or at least I feel there's more more awareness, I need to start investing. It's not so clever to have the money in the bank account because almost everybody realised by now that there's zero interest or close to zero. there is kind of an awareness, not enough, but there is awareness coming up towards I need to get investing. But when we were talking about the house, this is kind of like the roof thing.

Nadine Hunkeler: Yes, this is a metaphor that we're talking about here.

Julia Tatje: Yes, I just want to come back to this metaphor. If you are thinking of your financial life as a house, I think we both agree that the foundation is not investing and not the question which ETF to buy. It about your pension fund, about your insurances, your disability cover. It might also be a risk insurance for death for your partner. That's not something everybody needs, but there are people who would be quite well advised if they had it. Emergency funds.

Nadine Hunkeler: emergency funds, legal documents. Yes.

Julia Tatje: your taxes in line, please.

Nadine Hunkeler: Yes, that's all foundation. Yes, understand where you can deduct so that you have more bang for your buck once again.

Julia Tatje: Yes, my field is taxes. I just had another client calling, and I was like, yeah, I never did my taxes. I always let the tax office estimate my taxes. And now it's quite biting him back, because if you do that, you can do that. It's wrong to say you don't have to. If you don't submit your tax return, The tax office will estimate your income and your assets. If you keep doing that for several years in a row, they will just go up every year. Of course, if I was them, I would do the same. Now he realised, good Lord, maybe it was okay in the beginning, but I have been doing this for five, six, seven years now, and I'm actually in a very bad position right now. He is now starting to, like, first time filing taxes.

Nadine Hunkeler: So yes, so

Julia Tatje: But now it's lot more painful because first he has never done it, so there's no experience he has with that. Then there's no documentation. we found out that the estimate they made about his assets was increasing, but it was still too low. Now we have to do a voluntary disclosure. so very fun. So if we are thinking about this house, so there's just like one corner of the house just eroded. for him, I would put off the...

Nadine Hunkeler: They go invest

Julia Tatje: invest into ETF topic a little bit because I'm like, can we please just fix the basics first? And there are some basics, yes. So it is very important also the emergency fund. So many people don't have that. Yes. Yes.

Nadine Hunkeler: and I haven't understood the two types of people yet that are basically fully in cash and not investing yet, so

Julia Tatje: going to be quite cold in that house because there's some walls missing. please don't do that as well.

Nadine Hunkeler: they're not letting their money work for them. Or then you have the others that are just fully invested and that basically are building their house asset with the roof first, where I once again get framed anxiety. Yes, there's no walls. misunderstand what the foundations are and build the house and then, this

Julia Tatje: the

Nadine Hunkeler: is like the cherry on the cake, you you do with the investment part. Yes, you have the biggest lever there, absolutely. But the problem is, is if you have a disability case, that lever is going down the drain anyway. If you have a debt, like there's so many more risks around financially being permanently stable that you... don't just solve with the investment part, you solve it with having the foundations right. And that's where I think you and me are both proclaiming in the same direction, Like make sure there's walls, there's windows in there and so on. Yes. Yes. And your emergency fund on the side and everything else.

Julia Tatje: Build the walls first. can think about the tiles for your roof. You can think about them. I'm fine with that. please don't put them on before you have the walls. it's very fragile then.

Nadine Hunkeler: doing things, there

Julia Tatje: can't anything that someone did or did not. is one thing where we can undo a mistake that is in place since 2016. Since 2016, you are allowed to retroactively pay your Pillar 3A for the previous year. That's a little undo button. Yes, there will be more years that you can use this for

Nadine Hunkeler: So, you just created. So, that's a little... 4 to 25 years only, however. so

Julia Tatje: in upcoming years, but right now in 2016, you could pay for 2025 if...

Nadine Hunkeler: Fully filled up? Or not at all? not fully. You can make up for this gap in 2026, which It was the light version that they took in, let's face it.

Julia Tatje: you are listening to us and you are like, my God, I didn't do 3A in 25. Not at all or not fully. You can make up for this gap in 26, is, I think, a fantastic option in our legislation. kind of like an undo button. Yes, but still.

Nadine Hunkeler: This motion Etlin was supposed to go a lot further and it would have been amazing if it would have. But at least we get this one. We take the win that we get. Because December, the the pause I made. payment of 1st before?

Julia Tatje: But hey, least we've got that. because before, if people missed 31st of December, they paid January 3rd, I can't count calls I had. Julia, I made the payment too late and my bank only issued the payment on January 3rd or 4th. like, well, okay, you've now done it for the next year. So...

Nadine Hunkeler: one at we

Julia Tatje: I think this little undo button, even if it is just like a small one, at least we have one and we didn't have one before. So just wanted to point that out. Then there's this, I don't want to call it an urban myth because it's like a myth that people should fill a pillar 3A up to 50,000 frames and then open a new one. So maybe we can bust this myth right now.

Nadine Hunkeler: This so funny because this one actually got me into trouble at one point, but that's a story for another day. So, because I actually spoke out in a moment where probably people didn't want me to speak out, but someone was doing a statement that is as wrong as that. And it costs people so much money and I can then, I said I can't let it stand because it's wrong and it will harm people. So then...

Julia Tatje: And

Nadine Hunkeler: I gave enough room for someone else to correct it and then that didn't happen so eventually I spoke up and I corrected it. So that's not the case. Please do not do that anymore. We want to have from day one that you do your 3A, if possible. I mean if you already have your 3As and you have one or two then just going forward. We want to see at least five 3As. is in parallel. So if you have two right now please open at least another three.

Julia Tatje: parallel, yes.

Nadine Hunkeler: In the canton of Zurich you can actually have as many you want. In other canton there is limits to it but I think they're always limited to five. Yes, everywhere.

Julia Tatje: five you can have everywhere.

Nadine Hunkeler: In the canton Zurich you can even have more than that. And I used to run around and say I think people should have ten. And I got a lot of eyebrows raised, now I say at least five. It depends a bit on what age you have, on how much impact this will have.

Julia Tatje: a time, and in such a and in a place. So I'm longer.

Nadine Hunkeler: I mean, this is your territory, I'm happy to explain it. I'm happy to hand over the microphone why that's the case. So I'll do one part. It has to do with the fact that you can take it out as of 60, so five years before you go into retirement.

Julia Tatje: Yes.

Nadine Hunkeler: therefore, you want to have at least five accounts because you can only take them out in full for the time being. André and Silvius Schmidt is working on something that might change that. But for the time being, we're setting ourselves up correctly and you can only take them out in full. And why is that so important? Microphone over to yes, there's many different scenarios.

Julia Tatje: I also want to add, if you want to build a house before the age of 60, you are entitled to withdraw money for that or a flat. It's not limited to a house. There are options to withdraw it, but what always applies is what you just said. You can only withdraw the entire amount that is in this Pillar 3A account. So if people keep contributing into one Pillar 3A their entire life, there's going to be hundreds of thousands in there at the end, which is nice. great thing, it's going to come with a heavy tax issue there is a tax on the withdrawal of 3A and there is a progression in this tax. So the higher the amount that you pay, higher the tax percentage will be that will be applied to it.

Nadine Hunkeler: because That's the problem, yes.

Julia Tatje: So this is the first one. And the second one is you might not need all of it. So if I'm coming back to this person that maybe owns a house and they need a new I don't know, new heating. might need 50,000. If your Pillar 3A holds 250,000, you will not be able to touch any of it because you don't need 250,000. So you don't have invoices to present to the Pillar 3A Foundation to

Nadine Hunkeler: you

Julia Tatje: justify the withdrawal. And you can't only take 50 because you need to withdraw it entirely. So there's different reasons. The tax is one and then maybe you don't want all of them or you don't need all of the money in one moment. So this is why it is a good thing to have at least maybe five or if you follow Nadine's advice, ten PIL3A accounts. So then you can actually decide how much do I take which event and for what reason.

Nadine Hunkeler: Yes, exactly. And just to give like, let's do numbers here. If we're talking 500,000 in one account, for example, because at this stage, we're allowed to invest it, right? So it can easily grow to 500,000. If it's only in one account, then you can only withdraw the entire account. And we're talking at 500,000, I'll just say the number, you know the numbers better than me, but... for easiness purposes will also make them... So let's say 20 % actually then comes into play, then we're talking that we're going to be spending 100,000 just on taxes. But it's to make it easy for people to understand. If it's five accounts with 100 each and we're talking let's say 6 % in there, so it's 6,000 per 100,000 and times five, then you're going to be ending up paying 30,000 versus...

Julia Tatje: Yeah, it's going to be less, but yes.

Nadine Hunkeler: 100,000, said probably it's more like 14 % or something. But there's a significant gap in between there, where you could take that money and go on very nice vacations in your retirement for that money. And why would you pay that taxes if you don't have to? You can just set it up correctly now. And just so that we prevent that question from coming our way. No, you cannot split them. That's exactly what we were trying to refer to now.

Julia Tatje: would take it. Yes. Split them from the beginning.

Nadine Hunkeler: just split them and say, I'll do it in that case, I'll take my one account that I've amounted money and I split it, that doesn't work. So that's why you need, yes, exactly, you need to split from the beginning. Therefore, if you have already accounts that have no matter, don't amount them to 50,000. If you have one that already has 20 in it or whatever, just open another four and start funding those other four and no longer this one.

Julia Tatje: That's a whole field, yes. Yes, ask Nadine and discuss it. But it's too big now.

Nadine Hunkeler: Now, if you have a life insurance, that might be a little bit different, but that's a whole different topic. Yes, at the whole field, I'm happy to have people come and find me and discuss that. slightly allergic against life insurances. There's certain parts of life insurance. There's very good parts of life insurance, but there's a part of life insurance. Don't just quit your life insurance. It's important that we have another solution and mitigation in place before we quit

Julia Tatje: a And again, good reason to stick with a plan to follow a plan and to have a solution that is not the correct one for someone else. This is why it is so important. to a financial plan that is tailored to your individual needs and your situation.

Nadine Hunkeler: Have a financial plan.

Julia Tatje: my situation is not Nadine's situation. Yes.

Nadine Hunkeler: It's so funny how people always think it is. They come to you probably as well and say, I just want to do the same as my friend. And I'm like, yeah, that doesn't work because you have a different situation.

Julia Tatje: And Yes, so if you answer with it depends. They're always like, oh, she doesn't want to answer, but it's not, I don't want to answer, I want to answer properly. There is

Nadine Hunkeler: And they don't understand that their situation is different.

Julia Tatje: just one side note to all the experts out there that heard from a friend that Pillar 3A is a good thing and that maybe followed this advice, but then didn't complete a tax return. That's kind of like, not so clever.

Nadine Hunkeler: advice, fund, depending on

Julia Tatje: Because then you are putting money away in a restricted fund, in a restricted pot, depending on how you did it. did not profit from the tax savings, but you will have to bear taxes for the withdrawal of your money. is potentially the best idea to do that. So if you are contributing to Pillar 3A, make sure to get the tax relief.

Nadine Hunkeler: So if

Julia Tatje: because if you are subject to withholding tax earning less than 120,000, this tax declaration thing doesn't come automatically. So it might be a good idea to voluntarily opt for that or to stop pillar 3a. again,

Nadine Hunkeler: I usually tell them to stop it.

Julia Tatje: Yes, but sometimes there is an additional deduction, I don't know, let's say for childcare costs. And we are now advocating for do Pillar 3A, do Pillar 3A. But there are some people out there where we would say don't do it. Or US passport, also red flag. So again, it is not for everyone, not in every moment of their lives and not in every situation.

Nadine Hunkeler: do Yes, it doesn't make sense for certain people. Or Yes, oh yeah, big one.

Julia Tatje: And again, if you don't have an emergency fund that will potentially pay your dentist bill, please do not contribute to Pillar 3A, but fill the emergency fund first.

Nadine Hunkeler: Yes, absolutely. You need a liquidity fund for a reason. Yes. need liquidity. Yes. Yes.

Julia Tatje: It's called emergency fund for a reason because an emergency is something that occurs. needs liquidity now when you expect it least.

Nadine Hunkeler: So as a fist rule, just so that we can put a proper fist rule to it, I mean, you probably say the same thing. It's the people that are taxed at source that are earning below 120,000 that in my opinion, especially from this new regulation that came into place now, should not be doing their 3A because they mostly are paying taxes at source. and they can go and fill it up once they hit that 120 and start actually filing their taxes anyway. And so then they can make use of that tax deduction. And I I'm of the understanding that oftentimes they get a better deal if they're on source. Yes, you need to the calculation, Yes. You do it.

Julia Tatje: withholding tax. the Again, it depends. massively depends. we are happy to run a simulation. and to simulate it before we apply, before we attend the tax office, I want to do it. Because if you tell them once, you have to do it every year. again, there are people I would highly advise to do it, because there are other things that come in place too. then it does make sense.

Nadine Hunkeler: it Yeah, exactly. There's no way back there. it mainly the ones with children in that case where it makes a lot of sense? is family changes.

Julia Tatje: No, mainly for singles. you're married, most of the time the withholding tax tariff is advantageous. is people that have other expenses, so that have a long commute that need to buy a GER every year, for people that have childcare costs. People with kids will know, it can easily come to 20,000, 30,000 a year. You can get a tax relief for that, but only if you a tax return. And it depends on where you live, in which municipality, because the municipalities have different tax brackets. So actually it massively depends. And let's simulate, let's, again, it it might sound...

Nadine Hunkeler: once

Julia Tatje: boring or tedious and like, I need to do this. But it makes your life calmer once you've done it, because then you know. And it's again about awareness.

Nadine Hunkeler: How many hours does it roughly take you to do the simulation? Obviously it really depends on the situation of the client and the complexity. Definitely tax advisors and financial planners, preferred term, it depends. Because it does. It does, hour. balance

Julia Tatje: it actually does. I think for most clients it's like an hour. Figure out your situation. And it's just there. A ballpark thing is enough. Because we don't know what next year's salary is going to be like. So we will have high level figures not super detailed. And we will figure out does it make sense or does it not. And if we come to the conclusion we will save 10 francs in taxes, by any means don't do it.

Nadine Hunkeler: Yeah, work is too much for And then

Julia Tatje: Yes, there are so many reasons against that, but if we figure the tax savings are 6000 every year, then please let's have a closer look and then we can go into the details. So usually with less than an hour we will have an answer of is it a good idea to voluntarily file or is it when I think about today's conversation, one thing stands out. Financial planning isn't about predicting the future. It's about respecting the present enough to prepare.

Nadine Hunkeler: It is also about, it is partially a bit forecasting. I think that's the most fun part of it actually. it does help financial planning does help you to mitigate the now and all the risks in your personal life that you mostly weren't aware of that you even have. That's always when people come and say I want to invest and say it's dangerous. I'm like, oh, God, if you would know what actually is dangerous and what with what kind of risk you're currently running around you to be having a panic attack, which I'm currently having for

Julia Tatje: I think what is important, financial planning can be fun, especially if we're now talking about the roof.

Nadine Hunkeler: but then

Julia Tatje: Maybe not so much the walls. So let's assume we figured out the walls, then the roof, can do like a really fancy roof. And if you do it correctly, there's something you can look forward to.

Nadine Hunkeler: and you can give a bit of a prediction on where it's supposed to go. mean, obviously, we never know where the markets are going to go and what's going to happen. mean, wouldn't we love to be witches and have like these like fortune telling? It's so funny how often my clients come and say, and I'm like, I would love to be able to tell the future. Yes, that gift would be awesome.

Julia Tatje: A glass ball? Yes. I would take one as well. Okay, so if anyone has a glass ball for Nadine, please send it away. taking my glasses off because I'm so awkward. I can take out my glasses.

Nadine Hunkeler: I'm actually thinking of buying one because I so often have this question and I can take out my glass bowl and act. That would be so funny. I also need to take out my witch hat from Halloween and put it into my office. telling the future is not something that we do sadly, but we can give scenarios on where it's probably going to go. And those scenarios do actually really light a fire in people and under their hat.

Julia Tatje: Okay. Yes, you should do that. Yes. So. Get it done, people. thank you for your clarity and honesty and for being the kind of advisor who sees the whole person and not just the numbers. to everyone listening, if this episode stirred something, a question, a worry, maybe I should look at this. Don't navigate it alone. You'll find all the details about Nadine, Finance Phoenix about Taksom.

Nadine Hunkeler: So true. Unconfident. And confidence Yeah, clarity.

Julia Tatje: in the show notes. Because funny enough, the we avoid the longest often the ones that give us the most peace once they are handled. confidence and a good night's sleep. And just like that, you've been listening to another episode of Tax and the City. Thank you, Nadine. Thanks.

Nadine Hunkeler: Thank you for having me once again. That was exciting.