Career decisions and your finances

• Is your current job not as fulfilling as you’d like?
• Are you looking to return to work after a period of parental leave?
• Would you like to try living and working abroad?
• Have you been thinking for a while about starting your own business?
  

A professional reorientation will always lead to a certain amount of uncertainty, because it affects your financial situation. We show you four of the most common examples of a professional reorientation and provide tips on what you need to be aware of, particularly in regard to your finances.

Have you completed further training and are you looking to apply what you’ve learned in a new industry? Or perhaps you’ve received a job offer in a different sector? Here too, the reasons for switching to a new profession can be extremely varied. A change of industry can be very good for your career as well as personally rewarding: You broaden your network, learn new things and gain new experience. And from a financial perspective, a lot can change.

Financial considerations:

• Find out what the usual salary is for the industry: As a job applicant, you should find out about salaries for the role in question and think carefully about your salary expectations, as you’re likely to be asked about them during the interview. You need to be well prepared for this question and have a realistic idea about a salary that you can justify.
• Find out about possible future (or subsequent) career steps: What are the criteria for advancing further in your career? When can you expect a raise? When can you expect a promotion? Or are you not looking to progress up the career ladder? Is it more usual in your industry to change employers regularly?
  

For many, a career break to start a family is a possible moment to think again about where your career is heading. Putting some distance between yourself and everyday work often makes it easier to get a new perspective on things and to think again about what you want to achieve professionally. Will you decide to work in a new industry or perhaps to become self-employed? We list what you need to consider in cases 1 and 4 and below. But professional reorientation or returning to work after starting a family brings additional challenges. How do I combine career and family? How can I resume my career – including financially – where I left off?

Financial considerations:

• Understand the general parameters: Do you want to work part time or full time? Could gaps arise in your pension? Review the impact of new working conditions on your standard of living and on your pension early on.
• Think about your childcare options: You’ll need to make childcare arrangements at an early stage. In some cities, for example, you may have to wait months to get your child into a nursery. Generally speaking, you’re well advised to plan for the long term and to think about how to ensure childcare arrangements are in place at different ages. Weigh up the costs and benefits of different options such as nursery, day care, au pair or care within the family.
• Check family allowances: Parents are entitled to three types of family allowance: birth, child and education allowances. These allowances vary according to the canton. Find out in advance what you’re entitled to and claim the money from your new employer, who will pay the allowances each month with your salary. Information is available in the official factsheets on social insurance.
• Consider the tax implications: As parents, you receive lump-sum tax deductions, relief from direct federal taxation and your childcare costs are tax-exempt. Make a list and don’t be afraid to ask the tax office for details or to consult your tax adviser.

There are lots of good reasons to move abroad. Because of a relationship, to be close to your family or to experience another culture. Maybe you’ve also received an interesting job offer, which will involve living abroad for a few years? Whatever your motivation, moving abroad is a major step in your life and your career planning that can also have financial consequences:

Financial considerations:

• Find about the financial terms and conditions in the destination country: What will you earn in your future place of residence? How high is the cost of living? Make sure you have a full picture of how your financial situation will change. This way you’ll also be clear about your finances and can include them in your long-term wealth planning. 
• Examine the tax implications: If you live abroad for more than a year, you’ll generally need to deregister from your current place of residence. If you leave the country, all of your income and assets will in principle be liable for taxation abroad. Do you own a business or real estate in Switzerland? You will still have to pay taxes on them in Switzerland.
• Check the impact on your retirement provision: What will happen to your AHV, pension fund and pillar 3 savings? Find out how to avoid contribution gaps and how to continue saving for your retirement.
• Make arrangements for your bank accounts: What will happen to your savings? Do you take your investments with you or leave them with your Swiss bank? To receive your salary, you’ll probably need to open an account with a local bank in the destination country. Find out which one will best suit your needs.

Have you been dreaming of starting your own business for a while? Making your own decisions, self-realization and no more conflicts with managers – for many this is a long-held goal. But the idea of not having a secure income is challenging for many. You may encounter a high level of business risk, enjoy less existential security and spend a great deal more time working.

Financial considerations:

• Understand the initial costs: Will your initial costs be high if you start your own business? For example, will you require office space or special equipment? Will you require a certificate or special training?
• Budget for your regular costs: Will you need to employ and train people? Will you keep your own accounts and make tax returns yourself or would it be worth involving an expert?
• Don’t forget to build up reserves and provide for your retirement: If you are self-employed, you’ll need to belong to a compensation fund so as to pay contributions into pillar 1 (AHV, IV, EO). Unlike employees who share payment of contributions with their employer, the self-employed have to pay the whole amount themselves. Also, check what contributions you can make into pillar 3a, which offers tax benefits.