Planning your retirement in Switzerland? Here’s how

Retirement often comes sooner than you think, and those who prepare early will enjoy significantly more freedom later. Whether you plan to retire at 65, stop working earlier, or gradually reduce your hours - a good plan helps you ensure financial security and quality of life in retirement.

In this article, you’ll learn:

• How to prepare optimally for your retirement,
  
• What typical questions and decisions you’ll face,
  
• And why individual retirement planning is the key to a relaxed retirement.
  

The earlier you start, the more flexibility you gain and the more control you’ll have over your life after work.

From a certain age, you’ll likely start asking yourself:

• Is my income today enough to fund my retirement later?
• Will I be financially okay in old age?
• What should I do with my investments?
• Should I sell my home to finance my retirement?
• Should I make a buy-in to my pension fund?
• Can I retire at 60 already?
• Can I afford to reduce my workload before retirement?

The good news is - as with all financial topics - the earlier you start thinking about it, the better. Because this gives you a head start, allowing you to plan and optimize your retirement before you turn 65.

Preparation: What can you optimize before retirement?

Let’s start with the good news: a successful retirement doesn’t begin at 64 or 65, but many years earlier. The earlier you start thinking about your pension planning, the more flexibility you’ll have to make smart tax and financial decisions.

Before you dive into the detailed planning, you should clarify the basics:

• When do you want to retire - at the reference age (65), or earlier?
  
• Are you perhaps planning a partial retirement or an early withdrawal of your benefits?

This decision has a significant impact on how you prepare, which documents are relevant, and which tax or financial levers you can activate in time.

The most important step is to gain an overview of your current situation. This includes your pension fund statement, your pillar 3a accounts, and your planned lifestyle in retirement.

1. Fill your AHV gaps

Use the Skala 44 to find out how high your AHV pension will be later on. You only receive the full AHV pension if you have continuously fulfilled your contribution obligation since the year in which you became subject to AHV contributions. The fewer contribution years you have, the lower your pension will be in old age.

Gaps in your AHV pension can arise, for example, through periods of study, sabbaticals, or care and nursing work, and they lead to you not receiving the full AHV pension later on. That is why it is important to identify and close these gaps. This is always possible retroactively for up to 5 years.

In general:

• Pay into AHV as early as possible
  
• Pay into AHV throughout your entire working life
  
• Close gaps (up to 5 years retroactively)
  
• Use childcare and caregiving credits to close gaps

2. Understand Your Pension Fund Statement

 Your pension fund statement is the heart of your retirement planning. It includes all the relevant figures related to your 2nd pillar:

• Insured salary: The portion of your salary that is insured in the pension fund (not always identical to your gross salary)
  
• Retirement assets: Everything you and your employer have paid into the pension fund so far, including interest
  
• Projected retirement capital: The balance you’re expected to accumulate by retirement age
  
• Early retirement benefits: Many pension funds allow withdrawal starting at 58 or 60—with corresponding reductions
  
• Buy-in potential: The amount you can voluntarily pay in to close contribution gaps and save on taxes
  
• Maximum withdrawal for home ownership (WEF): In case you want to buy a home or reduce your mortgage
  
• Coverage ratio: Indicates how financially sound your pension fund is
  
  

Tip: Check your pension fund statement at least once a year. That way, you can identify gaps early and take corrective action while there’s still time.

3. Strategically Optimize Your Pension Fund

 Starting around age 50, things get especially interesting: this is when it really pays to take a closer look at your buy-in potential in your pension fund.

Why only from 50 onwards? Because by that time, you usually have a higher income and you’ve had time to grow your savings on the stock market before using it to make a buy-in to your pension fund.

With voluntary buy-ins, you can close contribution gaps, increase your retirement benefits, and reduce your tax burden at the same time. You can see how much you can contribute on your pension fund statement.

Your pension fund capital doesn’t count as taxable assets until you withdraw it—an additional advantage in your tax planning.

Ideally, you stagger your buy-ins over multiple years to save significantly on taxes:

In this example, a one-time buy-in of CHF 100'000.- saves you CHF 20'000.- in taxes; if you stagger the buy-ins over five years, you save CHF 27'500.- in total tax.

You can easily calculate your potential buy-ins and tax savings with this online calculator.

⚠️ Important: After each buy-in, a 3-year blocking period applies, during which no lump-sum withdrawals are allowed. So if you’re planning an early retirement, make sure to factor in this restriction.

If you’ve used pension funds to finance a home with WEF funds in the past: you must repay those first before making any new buy-ins!

4. Use Pillar 3a Strategically

The 3rd pillar of the Swiss pension system (pillar 3a) is your most flexible tool for preparing for retirement early and continuously, while saving taxes at the same time.

Ideally, open several 3a accounts (preferably 5) so that you can spread out your withdrawals over multiple tax years later on.

Make sure to invest your 3a funds - don’t leave them in a cash account.

From age 60, you can start withdrawing your 3a balances in stages. You can use these funds, for example, to amortize your mortgage or to invest them in the stock market. If you're not sure how to do this or how much risk you can still take at that age, I recommend attending my free online workshop.

As long as you have AHV-liable income, you can continue contributing (up to age 70, as long as you’re working). This way, you combine tax savings with long-term flexibility.

Important: After each buy-in, a blocking period of 3 years applies during which no lump-sum withdrawals are allowed. So if you’re planning early retirement, you must absolutely take this period into account in your planning.

If you have ever financed residential property using WEF funds, the following applies: You must repay that amount first, before making any new buy-ins!

Typical questions about retirement

In the following, we’ll clarify the most common questions people ask when they start planning their retirement.

How Can I Afford Early Retirement and What Will It “Cost” Me?

Early retirement means leaving the workforce before the official reference age (currently 65). It sounds appealing—but it also means that you’ll need to live off your retirement assets for a longer period while contributing less overall.

From a financial perspective, this has two major consequences:

• AHV reduction: If you draw your AHV pension early, it will be permanently reduced—by 6.8% per year of early withdrawal (as of 2025). If, for example, you retire 2 years early, you’ll receive about 13.6% less AHV pension—for life. This is especially critical for women, since we live longer than men and need to make the money last “until the end.”
  
  
• Reduction in pension fund benefits: Your pension fund will also pay you less in the event of early withdrawal, because you’ll have paid in for a shorter time and your capital has had less time to accrue interest. The exact amount can be found on your pension fund statement under “Benefits in the event of early retirement.”
  
  

Tip: Anyone considering early retirement should run multiple scenarios or have them professionally calculated. That way, you can build reserves in a targeted way, plan buy-ins into the pension fund, or use private pension assets to bridge the income gap. I’m happy to support you with this—here’s more information about my retirement planning service!

Can I also retire later?

Yes! And it can even make financial sense. If you continue working beyond the official reference age of 65, you can benefit from what’s called deferrals or supplements on your retirement benefits.

AHV Deferral

You can postpone your AHV pension for 1 to a maximum of 5 years. For every month you wait, your future pension increases; the bonus ranges from 5.2% (for 1 year) to up to 31.5% (for 5 years).

⚠️ Attention: You must apply for a deferral no later than one year after reaching the standard retirement age! And: You can only revoke a deferral within the first year after the application. After that, it is no longer reversible.

Pension Fund

You can also postpone your pension fund payout - usually up to a maximum of age 70. During this time, you continue to make contributions, which increases your retirement capital and therefore your future pension.

⚠️ Important: A deferral must also be registered and confirmed with your pension fund—ideally 6 months in advance.

Should I draw my pension as a monthly income or a lump sum?

To answer this question thoroughly, I’ve summarized all the advantages and disadvantages in the following table:

⚠️ Attention: If you want to withdraw your pension as capital, you’ll need a staged withdrawal and disbursement plan - in other words, a clear roadmap of when and in what order you’ll access and use your capital. This ensures that your money lasts in the long term, that you act in a tax-efficient way, and that your wealth remains actively invested—instead of sitting unused in a savings account earning 0% interest.

The diagram explains it well:

• Your spending: The amount of money you’ll need for your daily living expenses over the next few years
  
• Spending capital: You cover your expenses using this capital, which decreases over time as you pay rent and other costs, until it is replenished by your invested capital
  
• Investment capital: Money that you won’t need for daily living expenses in the near term and that you can invest to continue growing, until it’s time to replenish your spending capital with it again
  
  

If you’re looking for support in creating a personalized staged withdrawal and disbursement plan, feel free to reach out to me anytime.

Can I also split it: Part pension, part capital (partial withdrawal)?

Yes, this is possible—and for many women, partial withdrawal is actually the ideal middle ground. At the time of your retirement, you can choose whether to withdraw your pension assets fully as a monthly pension, fully as a lump sum, or as a combination of both.

This combination allows you to balance security and flexibility:

• With the pension, you cover your fixed monthly expenses like rent, health insurance, and groceries.
  
• With the capital portion, you stay flexible, can make larger purchases, pay off debt, or invest.
  
  

The specific split (e.g. 60% pension / 40% capital) depends on your pension fund’s regulations, as not all funds offer the same level of flexibility.

My tip: From a purely tax perspective, withdrawing your entire pension capital is often the more attractive option. However, if you’re looking for a middle ground, then a partial withdrawal is a good solution—because the pension is taxed as regular income (which falls under the highest tax rate), while the withdrawn capital is subject to the lower capital benefit tax.

What does partial retirement mean and how does it work?

Partial retirement is the gentler path into retirement. In this model, you reduce your working hours in multiple steps and at the same time draw a proportional share of your pension benefits from the pension fund. And: You can start this process even before reaching age 65!

Your pension fund and/or employer determines how much of your pension benefits you are allowed to draw before age 65.

To the extent of your reduction in working hours, you may withdraw a portion of your pension assets—either as a monthly pension, a lump sum, or a combination of both.

If you choose a lump-sum withdrawal, tax law allows a maximum of three partial retirement steps, with a minimum reduction of working hours by 20% per step. What is possible at your workplace is defined in your employer’s policy.

This staggered withdrawal has a major advantage: it reduces your tax burden, since smaller lump sums are taxed at lower rates.

An additional plus: those who work beyond the official retirement age (i.e. past 65) benefit twice. On the one hand, their AHV pension increases, since contributions continue to be paid; on the other, their pension fund assets also continue to grow.

⚠️ Important: Both the AHV and the pension fund must be notified about your partial retirement in advance - ideally at least six months before the planned first step. Only then can all administrative and tax-related procedures be implemented correctly.

What should I do with real estate when I retire?

If you own real estate, it plays a central role in your retirement, both financially and strategically.

It is important to assess whether your mortgage is sustainable in retirement. Banks also require, even after retirement, that your income is high enough to cover your mortgage and related costs.

The rule of thumb is: your annual housing costs (mortgage interest, amortization, maintenance) should not exceed 30-40% of your gross income. If your income drops significantly at retirement, it can become more difficult to renew your mortgage.

Should you still amortize your mortgage during retirement?

That depends on your situation:

• If you have enough liquidity, it might make sense to partially amortize your mortgage before retirement in order to lower interest costs and ensure affordability.
  
• If you prefer to keep your assets flexible, maintaining a moderate mortgage may still be beneficial in retirement—especially in a low-interest environment.
  
  

My tip: Create a realistic cash flow overview, and factor in maintenance, taxes, health insurance premiums, and possible renovations. This will help you assess whether your income will be sufficient long term or whether selling part of the property, reducing the mortgage, or even moving might make more financial sense.

By the way: This kind of financial overview is a standard part of my retirement planning service. Contact me here to learn more!

How do I decide what retirement path is right for me?

Perhaps the most important realization when planning your retirement is this: There is no single “right” way - only the one that’s right for you.

Whether you want to stop working early, reduce your workload gradually, or stay active until 70 .. it all depends on your goals, your assets, your health, and the lifestyle you want. The foundation for any decision is individual retirement planning.

What is retirement planning and why is it so important?

Retirement planning is essentially your financial roadmap for retirement. It shows you:

• how much income you’ll have in retirement,
  
• how your AHV, pension fund, and pillar 3a complement each other,
  
• how long your capital will last,
  
• and what decisions you can make today to reach your goals.
  
  

In short, it helps you gain clarity, security, and planning confidence, so you can actively shape your retirement instead of being caught off guard later on.

What exactly does a retirement plan give you?

• You’ll see when you can afford early or partial retirement.
  
• You’ll understand how capital vs. pension withdrawal affects your taxes and cash flow.
  
• You’ll get a clear overview of your income and expenses in retirement.
  
• You’ll be able to decide exactly which optimizations still make sense (e.g. pension buy-ins, 3a strategy, amortization).
  
• And: you’ll know when to take which steps so you don’t miss any deadlines.
  
  

How much does retirement planning cost?

The cost depends heavily on your personal situation and how complex your pension and asset structure is. For example, a simple plan for individuals at a bank or insurance company usually costs between CHF 2'000.- and 4'000.-. With independent financial planners like myself, it’s typically CHF 3'500.- to 4'000.-.

The difference comes down to this: banks and insurers also sell products (such as annuities or investment funds) and earn commissions - this allows them to offer the service more cheaply.

For couples, the self-employed, business owners, or those with assets in multiple countries or other complex circumstances, the scope of work increases and so does the price. In these cases, a retirement plan can cost CHF 7'500.- to 15'000.-.

What documents do you need for retirement planning?

To get a complete picture, you should have the following documents ready:

• AHV certificate (1st pillar)
  
• Pension fund statement and regulations (2nd pillar)
  
• Pillar 3a documents (3rd pillar)
  
• Documents for a 1e plan (for executives or self-employed)
  
• Investment or asset overview / portfolio
• Property documents (e.g. mortgage details)
  
• Latest tax return
• Household budget
• Foreign pensions
  

If you’re married, you’ll need the documents for both partners to create a complete and accurate retirement plan.

What do you get after completing a retirement plan?

A retirement plan is not a one-time document - it’s a process that grows with you.

What’s recommended:

• First draft around age 55: Get an overview and initiate optimizations.
  
• Second update at age 60: Check adjustments and simulate various scenarios.
  
• Final fine-tuning 6 months before retirement: Finalize all applications, withdrawals, and deadlines.
  
• Then, every 5 years: Review your budget, investments, and life goals.
  

This ensures that your retirement strategy stays up to date, that you can enjoy your retirement with peace of mind, and that you’re also prepared for changes in life circumstances (loss of a partner, illness, giving up your home, etc.).

Checklist for Ages 30 to 40

This is the phase where you lay the foundation for your financial future.

• Focus on increasing your income (career, further education, self-employment)
• Establish a savings rate of at least 20% of your income
• Build an emergency fund (3–6 months’ salary in a separate account)
• Contribute the maximum pillar 3a amount annually and invest it
• Make your first investments in broadly diversified ETFs or funds
• Get a clear overview of your debts and insurance policies
  
• Define your retirement goals (e.g. home ownership, family planning, sabbatical)
  
  

Checklist for ages 40 to 50

Now it’s about structuring your assets in a targeted way and closing any gaps:

• Review your pension fund statement: are there contribution gaps?

• Reduce debt and rethink your mortgage strategy

• Continue building up pillar 3a—preferably using multiple accounts for future staggered withdrawals

• Review pension and life insurance policies (coverage, premiums, usefulness)

• Start thinking about partial or early retirement scenarios

• Adjust your asset allocation regularly (e.g. rebalancing, reducing risk)
  
  

Checklist for ages 50 to 60
 

This decade is crucial for your future flexibility in retirement.

• Check your buy-in potential in the pension fund and use it strategically

• Include possible 3-year blocking period after buy-ins in your planning

• Diversify your 3a accounts and prepare your withdrawal strategy

• Intensify your tax planning (e.g. stagger capital withdrawals)

• Create a budget and cash flow simulation for retirement

• Consider partial retirement or working beyond age 65

• Keep all relevant documents (pension fund, AHV, 3a, mortgage) up to date
  

Checklist for ages 60 to 65

Now it’s time to implement your retirement strategy and clarify the final details.

• Decide on pension vs. capital (or a combination of both)

• Stagger capital withdrawals to optimize taxes

• Submit your applications to AHV and the pension fund in good time (6-12 months in advance)

• Review your real estate strategy (affordability, amortization, renovation plans)

• Make final pillar 3a contributions if you still have earned income

• Plan your budget and liquidity for the first years of retirement
  
  

Checklist for age 65 and beyond
 

Even after reaching retirement age, you can actively manage your finances and optimize your taxes—especially if you’re still healthy and want to keep working.

• Check whether an AHV deferral (max. 5 years) or a reduced workload is worth it - this allows you to benefit from bonus payments and remain socially insured

• Many pension funds allow you to continue contributing up to age 70 or to defer pension withdrawals - this increases your retirement capital

• If you have AHV-liable income, you can continue contributing to pillar 3a until age 70 and benefit from tax deductions

• Plan staggered capital withdrawals (e.g. from 3a or securities) to reduce taxes

• Regularly adjust your budget for rising living costs and inflation

• Review your will, living will, and power of attorney to clearly define your wishes and ease the burden on your loved ones in an emergency

Summary: Planning your retirement in Switzerland

Whether you're dreaming of early retirement, easing into it gradually, or working a few more years to boost your pension - solid retirement planning is key to maintaining your financial independence and lifestyle. The earlier you start, the more flexibility and options you’ll have. From optimizing pillar 3a, understanding your pension fund, to managing real estate and taxes: a thoughtful approach will pay off in peace of mind.

Feeling overwhelmed? Don’t worry - you don’t have to do it alone.
Now’s the time to take control and design the retirement you truly want.