real estate
pensions as asset class bonds

It might be quite unclear how much pension we might get from social security (AHV) or pension schemes (second pillar), but for the purpose of asset allocation it might be useful to have a quiet think about the implication of having them.

Depending on the amounts paid, and the number of years paid, you will receive a certain amount of social security (AHV), regardless of what the stock markets might do. The same holds true for any pension schemes you might be entitled to.
Accordingly you will receive a certain amount of money every month once you have reached retirement, even though you never have actually “owned” the principal, i.e. the pile of cash has never sat in your personal account, thus behaving very much like a bond holding, also with very limited risks involved.

As an example: to match a AHV payment of 1`500 per month you would need to sock away a bond holding of (12x1500/0.025) = 720’000 (considering 2.5% return on a bond holding as at least possible)

Of course the comparison only goes so far, as you can’t touch the principal itself.

Never the less social security and pension schemes should be taken into account when deciding upon one’s asset allocation. (As should the house you might own, or the load of gold coins you inherited from your godfather...)