I spent the first 23 years of my life in Switzerland, and have moved to the UK a bit over a year ago. I've also been wondering about this, as I'm not ruling out moving back at some point. I guess the amount you'd need to be FI would be heavily dependent on your personal situation/ cost of living. At 4%, 2M would be an annual withdrawal of 80 000CHF, which I believe is more than most people earn, even in Switzerland. Isn't the average monthly salary just a bit over 5000 CHF?
That said, if you're working in Switzerland, salaries are much higher than in many other countries, so maybe that partially makes up for the cost of living? My mother is a teacher there, and her salary would easily be in the top 5% here in the UK, whereas teachers here earn an average salary. She also has some real estate, and I believe you're right about the returns. A lot of this depends on how it's managed, though - she employs someone for that and isn't really involved in much of the maintenance, which must lower her returns significantly. When speaking to her financial advisor, he said that returns (both real estate and stocks) in Switzerland are generally a bit lower but also less volatile, so that might not be such a bad thing. Also, inflation is really low there and sometimes even negative, so that's a smaller concern than in the US or UK. (Source: https://www.inflation.eu/inflation-rates/switzerland/historic-inflation/cpi-inflation-switzerland.aspx)
I'd also love any insight on how to deal with buying foreign equities. I'm investing from an English account at the moment, but if I do move back (or to a different country), this might be a problem, depending on how the GBP does.
A few notes:
- Don't rely on a 4% withdrawal ratio unless you want to live a high risk life. 4% was calculated based on people living in the US market (which is larger/more homogenous - with people having home-bias), with a normal retirement duration. For FIRE you'd want lower risk hence lower withdrawal ratio because you need to withdraw over a much longer duration. Secondly, assuming that you're diversified: your equities won't be majority-Swiss, so there's the additional exchange rate risk. Ergo, 4% is crazy.
- Yes: salaries here do tend to more than make up for cost of living. You need to take into account that taxes are lower than in e.g. the UK too. The last time I googled for it, it seemed like people in Switzerland tend to make more than most other countries AFTER taking into account both taxes and cost of living - the information is available somewhere online.
The "foreign equities" really depends on your definition of foreign equities. A good rule of thumb is to buy a total world index fund/ETF, so your investment strategy doesn't really change by moving from the UK to Switzerland. It's easy to buy that in the UK: IIRC VWRL is the go-to ETF for EU residents (it's an "all-world" fund though: I believe it leaves out small-cap). I'd recommend an internationally competent broker though: Interactive Brokers can be a good choice since they let you buy around the world, they are available internationally, and they offer cheap currency conversion (which is important if you move - or just want to buy on an exchange in a different country).
Living in the UK means you are blocked from buying e.g. US ETF's (due to EU PRIIP regulations), which blocks you from some better ETF's such as VT (total world, and cheaper to buy - also domiciled in the US which avoids the fund losing dividend withholdings to the US). However in Switzerland, you _can_ buy US ETF's. So if/when you move, you can sell your VWRL and convert it to VT - this is easiest if you do both at the same broker. Hence my recommendation for Interactive Brokers since they let you deal with both US and non-US ETF's and are good at dealing with people in multiple countries. (Switzerland doesn't assess capital gains for regular investors, hence such a conversion is close to being free.)
Personally, given that Switzerland has historically had a highly performant market (probably thanks to various infrastructural underpinnings and legislative stability), I would even consider some home-bias for retirement in Switzerland, but it's something that needs careful evaluation, and has risk of its own.
// Edit: and I just realised my post touches on another major Swiss thing: no capital gains (for regular investors). That probably has a major effect on reducing taxes at retirement for FIRE'ees. AFAIUI most countries will charge capital gains when selling stocks which obviously reduces the actually usable amount of capital. OTOH dividends are taxed at income tax rates, whereas some countries have preferential taxation for dividends. Do take this into account when comparing other people's example retirement calculations.
