Two people, same salary, same contributions, for 40 years. One retires with CHF 359,100 in retirement savings, the other with CHF 596,100. The entire difference of around CHF 237,000 comes from something that never appears on a payslip: the interest paid by their pension fund.

For many employees in Switzerland, the pension fund is one of their largest assets, often larger than their pillar 3a account and investment portfolio combined. Yet in our consultations we regularly see that people read their pension fund statement carefully for the first time shortly before retirement. That is when the big decision comes up (in 2025, according to Swisscanto, more than half of all retirement savings were withdrawn as a lump sum for the first time), and the figure being decided on is the result of 40 years in which nobody was paying attention.

This article briefly explains how the pension fund works and then looks at the two levers that determine your retirement savings during your working life: the contribution split and the interest rate.

In brief: the pension fund in the three-pillar system

Swiss retirement pension rests on three pillars with different roles. AHV is meant to secure a basic livelihood, the pension fund is meant to maintain your accustomed standard of living together with AHV, and the third pillar closes the remaining gaps.

The principle of the pension fund is quick to explain. The coordination deduction (2026: CHF 26,460) is subtracted from your gross salary, because this part is already covered by AHV. What remains is the coordinated or insured salary. On this salary, you and your employer pay savings contributions every month, which are credited to your personal retirement account. The pension fund invests the money and pays interest on your balance every year. At retirement, it is paid out as a lifelong pension or as a lump sum (we cover that trade-off in the article Pension fund: pension or lump sum).

This leads to a simple equation: retirement savings at 65 = all savings contributions + all interest. The contributions depend on how much is paid in and who pays what share. The interest depends on how well your pension fund performs and how much of that it passes on to you. Neither is fixed by law; to a large extent, both are set by your pension fund's regulations.

Lever 1: the contribution split

The law prescribes minimum savings contributions, known as retirement credits. They rise with age and are calculated as a percentage of the coordinated salary (Art. 16 BVG). For our example, we take a person with an annual salary of CHF 85,000. After the coordination deduction, the coordinated salary is CHF 58,540.

Who pays these contributions is governed by Art. 66 BVG: the employer must contribute at least as much as all of its employees combined. In practice, this usually means the employer covers at least half. On top of this come risk contributions for disability and death, as well as administrative costs, which are not included in the table.

The law only sets the minimum, though. Many employers go further, in two ways that are worth keeping apart:

• The employer covers a larger share, for example 60 percent or two thirds instead of 50 percent. Your retirement savings stay the same, but less is deducted from your salary, so your net pay is higher.
• The savings plan is more generous, for example with savings contributions above the statutory rates, a lower coordination deduction or none at all. More money flows into your account overall, and your retirement savings grow.

How much this matters is shown by comparing three employers for the same person. Salary and interest (2.5 percent a year) are identical in all three cases; only the regulations differ.

With employer B, the person ends up with the same savings as with A, but has paid around CHF 48,800 less out of their own salary over their working life. With employer C, both are better: around CHF 79,000 more in retirement savings and still just over CHF 10,000 less in own contributions than under the statutory minimum.

Lever 2: the interest rate

Each year, the Federal Council sets a minimum interest rate; in 2026 it remains at 1.25 percent. However, it only applies to the mandatory part of the balance. The actual interest paid on the entire retirement balance is decided by each pension fund's board of trustees, depending on how well the fund has invested, how large its reserves are and how much it has to cross-subsidise pensioners.

Accordingly, the differences are large. According to the Swisscanto Pension Fund Study 2026, the 528 funds surveyed paid an average of 4.7 percent interest on the balances of active members in 2025, the highest value since the study began in 2000. The top 10 percent of funds credited 9.25 percent, the bottom 10 percent just 2 percent. Over five years, this gap added up to 26 percentage points. A survey by the Swiss consumer programme Kassensturz (SRF) found a five-year average range from 7.5 percent at the best-ranked large company pension fund to 1.23 percent at the bottom of the table.

2025 was an exceptionally good investment year. Over decades, however, differences of 1.5 to 3 percentage points between a cautious fund and one that pays good interest are realistic. Our example therefore uses 1.25, 2.5 and 4 percent.

Why the same percentage point is worth much more later

One percentage point more or less interest always applies to the entire balance saved so far. At 30, with perhaps CHF 50,000, it hardly shows. At 60, with CHF 700,000, it is an amount you would notice if it appeared on your payslip.

This is exactly what makes the pension fund a hidden decision-maker. In the first years of your career, the differences between a good and a weak fund are so small that nobody cares. They only become visible once the balance is large, and by then most of the years have already passed.

At 35, the balances at 1.25 and 4 percent interest are only around CHF 5,800 apart. At 45 the gap is CHF 32,100, at 55 already CHF 98,600. In the last ten years, more than CHF 138,000 is added on top, more than in the thirty years before combined.

At 4 percent interest, more than half of the retirement savings comes from interest, more than from all employee and employer contributions combined. Converted at the statutory conversion rate of 6.8 percent, the difference is around CHF 1,340 of pension per month, for life. When it comes to whether you can maintain your standard of living in retirement, this is often the decisive amount.

What you can influence and what you cannot

First things first: as an employee, you cannot pick your pension fund. At larger companies it is fixed, often as the company's own pension fund. At smaller companies, switching is possible but involves effort and risk for the employer. The affiliation agreement has to be terminated, the staff have to consent to the switch (Art. 11 BVG), and a new fund will not take on every group of insured persons on good terms. A small business switching pension funds because of one employee is therefore rare.

It is still worth understanding the system, because there are moments when you do have influence:

• When changing jobs. When comparing a new offer, look at the pension plan alongside the gross salary. Ask for the regulations or a sample statement, and ask about the interest paid over the last five years. What else to consider when changing jobs is covered in the article Job change and retirement pension.
• In salary negotiations. A higher employer share or a better savings plan is sometimes easier for the employer to agree to than a pay rise, and it is attractive for you from a tax perspective.
• When choosing a savings plan. Some pension funds offer up to three savings plans. The higher plan means a larger salary deduction, but it increases your retirement savings and is deductible from taxable income.
• Through the pension committee. Every pension fund is managed on a joint basis, with employees represented on the board of trustees or the pension committee. Asking there how the fund's interest compares with others is a legitimate question.

Where to find this information on your statement is explained section by section in the article Understanding your pension fund statement.

Conclusion

The contribution split and the interest rate work in the background, year after year, and go unnoticed for a long time. In our example, the gap between the statutory minimum and a fund paying good interest with a generous savings plan is around CHF 348,000, on exactly the same salary (CHF 359,100 versus CHF 707,400). You can rarely choose the pension fund itself. But you can make sure it is part of the calculation at every job change and in every salary negotiation.

I consider this one of the most effective and at the same time most overlooked levers in building wealth. If you understand your pension fund statement at 35, you have 30 years to make something of it. If you read it for the first time at 62, all that is left to decide is how to draw the result.

As of September 2026, by Lukas Bachmann & Alessandrina Gull, innoVorsorge AG

The AHV pension is the foundation of your retirement pension in Switzerland. In 2026, the monthly individual pension ranges between CHF 1,260 (minimum) and CHF 2,520 (maximum). How much you actually receive depends on two factors: the number of contribution years and your average income during your working life. Additionally, the 13th AHV pension will be paid for the first time in December 2026. This article shows you how the calculation works, what the AHV 21 reform changes and where you miss out on money without knowing it.

Two Factors Determine Your Pension

The AHV pension is calculated from exactly two factors:

Factor 1: Contribution years (contribution period). For a full pension you need 44 uninterrupted contribution years (scale 44). The contribution obligation begins on 1 January after your 20th birthday and ends at the reference age. Each missing year permanently reduces the pension by about 2.3% – that is one forty-fourth of the full pension. Three missing years mean nearly 7% less pension. For life.

Factor 2: Average annual income. AHV takes all AHV-liable income from your working life, adds child-raising and care credits and divides by the number of contribution years. The result – the average annual income – determines your position on the pension scale.

For married couples, a cap applies: both individual pensions together may not exceed 150% of the maximum pension – i.e. CHF 3,780 per month. Additionally, income earned during marriage is split equally between both partners.

Child-Raising Credits

Those raising children under 16 receive child-raising credits of CHF 45,360 per year. These are not paid out but increase your average income in the pension calculation. For joint custody, the credit is split equally. These credits can make the difference between a pension near the minimum and a significantly higher pension – especially with part-time work or employment breaks.

What the 13th AHV Pension Brings

On 3 March 2024, the Swiss electorate approved the popular initiative for a 13th AHV pension. Implementation takes place in 2026: in December 2026, all AHV pensioners will receive an additional monthly pension for the first time.

The amount of the 13th pension corresponds to one-twelfth of the annual pension – or about 8.33% more pension per year. Concretely:

• Minimum pension: additional CHF 1,260 in December (new annual total CHF 16,380)
• Maximum pension: additional CHF 2,520 in December (new annual total CHF 32,760)
• Married couple (capped): additional CHF 3,780 in December

The 13th pension is not counted towards supplementary benefits. However, it is subject to income tax like the regular AHV pension.

AHV 21: New Reference Age for Women

The AHV 21 reform has been in force since January 2024 and gradually raises the reference age for women from 64 to 65. The transition affects birth years 1961 to 1964:

Compensatory measures: Women of the transition generation (birth years 1961 to 1969) receive a lifelong pension supplement. Depending on birth year and income level, this ranges from CHF 12.50 to CHF 160 per month. The supplement is not counted towards the married couple cap and is tax-free.

At the same time, AHV 21 introduces flexible pension withdrawal: both women and men can draw their pension between ages 63 and 70. Early withdrawal leads to a reduction of 6.8% per year. Deferral increases the pension by 5.2% per year – for a maximum of five years.

Contribution Gaps: Every Missing Year Costs

Contribution gaps arise faster than you think. Common causes:

• Years abroad without a bilateral agreement or without voluntary AHV insurance
• Study after age 20 without paying minimum contributions (CHF 514 per year for non-employed persons, as of 2026)
• Career breaks – sabbatical, unpaid leave, employment break without notification
• Self-employment with incorrectly declared AHV contributions

The problem: gaps often only come to light at retirement. Then it is too late. Missing contribution years can only be paid back within five years. If you miss the deadline, you lose the entitlement to those years – and thus about 2.3% of your pension per missing year. Permanently.

How to Order Your IK Statement

The IK statement (individual account) is the only way to check your registered contribution years and income. Here is how to proceed:

1. Online: Order at ahv-iv.ch (AHV/IV information office) – free of charge
2. By post: Written request to your responsible AHV compensation office – also free of charge
3. Check: Compare the listed years with your CV. Pay particular attention to years with employer changes, stays abroad or study
4. Act: Catch up on missing years within the 5-year deadline. Contact your compensation office

You can find your current employer's AHV compensation office on your salary statement. Self-employed and non-employed persons should contact the cantonal compensation office of their canton of residence.

Conclusion

The AHV pension follows clear rules: 44 contribution years for a full pension, maximum pension at CHF 90,720 average income, cap for married couples at 150%. The 13th AHV pension brings about 8.33% more per year from December 2026. What remains is your personal responsibility: order your IK statement, identify gaps, act within the deadline. Those who miss this are giving away pension – permanently.

AHV covers at best around 40% of your final income. You must close the rest through the 2nd pillar and private pension (pillar 3a/3b). Anyone who wants to fully understand their pension situation needs an analysis of all three pillars – not just AHV.

A woman in Switzerland receives on average about a third less pension in old age than a man. This is not a question of lifestyle, profession or personal commitment. It is the mathematical consequence of a pension system built decades ago for an employment biography model that barely exists today.

The gap is called the gender pension gap. And it is concrete, measurable, avoidable.

The Numbers the System Proves

The official FSO statistics (base year 2020) show:

In the pension fund the difference is even more dramatic: BVG pension for men CHF 35,560 per year, for women CHF 18,605 per year – a gap of over 47 percent. Only 49.7 percent of women of retirement age receive a current BVG pension – compared to 70.6 percent of men. Some of the remaining women took their assets as capital. But many were never insured due to part-time work below the BVG entry threshold or long employment breaks.

In the AHV the difference is small. The average monthly pension in 2022 was around CHF 1,883 for women and CHF 1,862 for men. The pension gap therefore does not arise in the first pillar. It arises in the second and third – exactly where your own working life makes the difference.

Where the Gap Arises

The Coordination Deduction

The second pillar works like this: not the entire salary is insured, but the salary after deducting a fixed amount – the coordination deduction. In 2026 this is CHF 26,460.

This fixed deduction affects low wages and part-time wages disproportionately.

With two part-time jobs, the coordination deduction is even applied twice – further reducing the insured salary. This is the part-time trap of the pension fund.

Part-Time Rate and Care Work

The figures from the second quarter of 2024 (FSO) speak clearly:

In terms of total workload (ages 25–64), women work 61.1 hours per week, men 57.8 – but 62 percent of women's working time is unpaid.

This work does not pay into the pension fund. It does not pay into pillar 3a. It only generates a pension component indirectly – via the AHV child-raising credit.

The BVG Reform Was Rejected

The reform of occupational pension, which would have reduced the coordination deduction for part-time workers, was rejected on 22 September 2024 with 67.1 percent No. All cantons, with the exception of 26 out of 2,126 municipalities, voted against it. The systemic disadvantage for part-time women remains.

The Individual Pillars in 2026

AHV: Child-Raising and Care Credits

The BSV credits each parent with custody of a child under 16 a child-raising credit of CHF 44,100 per year in 2026. For married couples, the credit is split equally. The care credit at the same rate applies to caring for close relatives (max. 30 km or 1 hour distance) and must be applied for annually.

Pillar 3a: Women Contribute Less Often

A Credit Suisse study shows: only around 55 percent of employed persons contribute regularly to pillar 3. Among mothers with low incomes, the rate drops to 35 percent. Among divorced single women, it is 48 percent.

Divorce and Pension

Divorce often hits women harder financially – especially in terms of pension.

• AHV splitting (automatic): Income earned during marriage is divided equally between partners. Women do not need to take action here.
• BVG division (Art. 122/123 CC): Retirement savings accumulated in the pension fund during marriage are divided equally. Cut-off date: initiation of divorce proceedings.
• Waiver possible (Art. 124b CC): On application, subject to "adequate" own pension. Risky for women with a pension gap.

The Widow and Widower Pension: Reform Underway

The European Court of Human Rights ruled in 2022 in the "Beeler" case that the Swiss regulation discriminates against widowers. The Federal Council's reform proposal provides for:

• Benefits until the youngest child turns 25, regardless of the parents' marital status.
• Childless widows and widowers under 55 lose their pension entitlement (with a two-year transition period).

The criticism from the Swiss Trade Union Federation: the reform leads to benefit cuts that mainly affect women. As of 2026, the draft is still being discussed.

Life Stages That Become Traps

Maternity leave (14 weeks, 80 percent salary, max. CHF 220/day): During this time, pension fund contributions continue – on a 100 percent salary basis. No gap arises here.

Part-time after children: The aforementioned 50 percent trap. Over 20 or 30 years, this adds up to six-figure pension gaps.

Divorce at 45: On average, this leads to a pension gap of 37 percent. Those who have not built up their own pension start almost from zero after 40.

Marriage without a contract: Participation in acquisitions applies automatically. This divides assets created during marriage – but it does not protect against pension gaps from care years.

What You Can Do Concretely

1. Start pillar 3a as early as possible – and consistently. Anyone who pays in CHF 7,258 annually from age 25 and achieves 5 percent return will have around CHF 877,000 at 65. Those who start at 35: around CHF 460,000. The first 10 years matter for a lifetime.
2. After each employment break: check pension fund buy-in. Pension fund buy-ins are fully deductible from taxable income. With a CHF 30,000 buy-in and 30 percent marginal tax rate: immediate tax saving of CHF 9,000 – and the gap is filled.
3. Pay attention to pension fund choice with part-time work. Some pension funds have abolished the coordination deduction or made it proportional. When starting a new part-time job: compare pension fund regulations.
4. Marriage contract and advance care directive. Both documents cost little to prepare – and provide massive protection. Not mistrust, but clarity.
5. Structure financial conversations as a couple. Sit down together at least once a year: budget, care splitting, pension contributions, long-term goals.

Political Initiatives 2026

• Individual taxation: Approved on 8 March 2026 with 54.23 percent. Implementation earliest 2029.
• UKibeG (passed Dec. 2025): First permanent federal contribution (CHF 200 million) for childcare.
• Childcare initiative: In the National Council in spring 2026. Demanding: legal right to a childcare place, parent contributions max. 10 percent of income.
• Survivor pension reform: Ongoing Federal Council bill following the ECtHR ruling.

Conclusion

The gender pension gap is not an abstract problem. It is the mathematical consequence of concrete mechanisms: coordination deduction, part-time rate, care work, missing 3a contributions, divorce gaps. Each of these mechanisms can be addressed individually – best early, best systematically.

Switzerland has one of the most differentiated pension systems in the world. But the system rewards a continuous full-time employment biography. Those who deviate from it for whatever reason – and most women do – must actively compensate. No one does this automatically for you.

There is no political reform on the horizon that will close the gap in the short term. But there are clear, individual levers that work. Those who know and use them will close over 30 or 40 years exactly what the system does not provide.

On 12 June 2026, the Federal Council amended three ordinances on retirement pension. Two of them concern pension funds and run in the background for you. The third affects you directly as soon as you have a pillar 3a account and are married, live in a registered partnership or have children: From 1 June 2027, you can decide yourself that your children or your life partner will participate in your 3a savings alongside your spouse. Today, the ordinance excludes this. We show you what currently applies, what's new and what you can do by then.

The most important points at a glance

• Today, the spouse or registered partner receives the entire 3a savings. Children only benefit if there is no spouse.

• From 1 June 2027, you can move children, life partners and other people from rank 2 into the first rank and set the shares yourself.

• Protection clause: Every beneficiary in ranks 1 and 2 receives at least 10 percent. An exclusion is not possible.

• If you do nothing, everything stays as it is. You report the change in writing to your 3a foundation, not in your will.

What it's about: Who gets your 3a savings when you die

Your pillar 3a savings do not belong to your estate. They are not distributed according to a will or inheritance law, but according to a fixed order set out in Article 2 of the BVV 3 ordinance. Experts call this the beneficiary order. It knows five ranks:

1. Spouse or registered partner
2. Children (direct descendants), life partners after at least five years of shared household, people who provide for shared children, and people you have supported substantially
3. Parents
4. Siblings
5. Other heirs

The rule behind it is simple: The first rank in which someone stands receives the entire savings. All subsequent ranks come away empty-handed. If you are married, your spouse receives everything, even if you have children from a previous relationship who are still minors or in education. Today, you can only arrange within rank 2 (how much children and partners receive) and the order of ranks 3 to 5. You cannot change anything at the top of the list.

The Federal Council investigated this problem at the instigation of the Nantermod postulate (22.3220) and noted in 2024 that patchwork families are poorly served by the current rule. The ordinance amendment of 12 June 2026 implements this.

What's new from 1 June 2027

The change concerns paragraphs 2 and 3 of Article 2 BVV 3 and can be summarised in three points.

First: People from rank 2 may move up to rank 1. You can place your children, your life partner or another person from rank 2 on the same level as your spouse. This works for a single person or for several. You can also move just one of two children forward and leave the other in rank 2.

Second: You set the shares, with a lower limit of 10 percent. If several people are in the same rank, you determine who receives how much. If you determine nothing, it is divided per head (three people in the first rank: one third each). New is a protection clause: Nobody in ranks 1 or 2 may be set to less than 10 percent of the savings. An exclusion through the back door (e.g. 1 percent for the spouse) is thus explicitly forbidden. This lower limit does not apply to ranks 3 to 5.

Third: If you do nothing, nothing changes for you. The standard order remains. Without your written notification to the 3a foundation, the spouse continues to receive everything. The rank change is an option, not an obligation. And it only works from rank 2 to rank 1: you cannot move parents or siblings past the spouse.

Table: Beneficiary order today vs. new

Beneficiary order pillar 3a: today and from 1 June 2027

Source: Art. 2 BVV 3 (current version) and ordinance amendment of 12.06.2026 (Art. 2 paragraphs 2 and 3 BVV 3, in force from 01.06.2027).

The Federal Council gives providers around a year to adapt their regulations and have them approved by the Federal Tax Administration. That is why the rule only applies from 1 June 2027 and not already from August 2026 like the other changes.

Timeline of the ordinance amendments

Three situations in which something changes

Example: How the split could look new

Married, two children from a previous relationship

• Today: Spouse 100%
• From 06/2027: 50% / 25% / 25%

Married, two joint children (example from the BSV)

• Today: Spouse 100%
• From 06/2027: 80% / 10% / 10%

Spouse / Child A / Child B

The shares are freely selectable. The only limit: at least 10% per beneficiary in ranks 1 and 2.

The second example comes from the explanatory report of the Federal Social Insurance Office (BSV): A married father named his wife as sole beneficiary in 2020. In 2027, he raises his two children to the first rank and assigns 80 percent to his wife and 10 percent to each child. Less than 10 percent per child would not be permitted.

For scale: In 2023, the average 3a capital withdrawal at retirement was CHF 49,381 for men and CHF 41,772 for women (source: FSO, cited in the explanatory report). In the event of death before retirement, the savings are usually smaller. However, anyone who pays in the maximum amount over years (2026: CHF 7,258 with a pension fund, CHF 36,288 without; since 2025 also with catch-up payments) quickly reaches six-figure amounts. Then it makes a difference whether a child from a first marriage receives 0 or 25 percent of it.

What you concretely need to do

The beneficiary designation belongs to the 3a foundation, not in a will. You notify the bank, insurance company or pension foundation in writing who you designate as beneficiary, in which rank and with what share. Whether a designation via will is valid is disputed among lawyers; the BSV therefore recommends reporting the names directly to the 3a provider. This applies to each of multiple 3a accounts individually.

Existing designations remain valid. What you determined before 1 June 2027 continues to apply. As soon as you change the split after this date, new law applies including the 10% lower limit. The foundations must adapt their regulations and inform you; if you hear nothing in summer 2027, an inquiry is worthwhile.

Vested benefits accounts run in parallel. There, the rank change was already possible before; new is that the 10% lower limit also applies in the first two ranks (Art. 15 paragraph 3 FZV, also from 1 June 2027). The pension fund itself is not affected; there, your fund's regulations continue to apply.

Keep taxes and compulsory portions in mind. Capital benefits from pillar 3a are taxed for the beneficiaries separately from other income at a reduced rate; the amount depends on the canton of residence and the amount. If you distribute the savings among several people, the progression per person usually decreases. Under inheritance law, the 3a savings do not fall into the estate, but can be counted when calculating compulsory portions. Anyone redistributing larger amounts should coordinate beneficiary designation, marriage contract and will (see also our article on matrimonial property regime and protection in an emergency).

Checklist until June 2027

1. List all 3a accounts and vested benefits accounts. 2. Check which beneficiary designation is currently stored per account. 3. Consider who would economically depend on the money after your death. 4. From June 2027, store the desired split in writing with the provider and align it with your will or marriage contract.

The two other changes, briefly explained

13th AHV pension and the 85% limit (from 1 August 2026). For salaries above CHF 90,720 (upper BVG limit 2026), an adequacy rule applies: pension fund pension and AHV pension together may not exceed 85 percent of the last AHV salary. If the 13th AHV pension were included in this calculation, the limit could be exceeded, and the fund would have to reduce its benefits. That is exactly what the initiative did not want. Therefore, the 13th old-age pension is explicitly excluded from the calculation. For you this means: The 13th AHV pension, which will be paid out for the first time in December 2026, will not lead to a reduction in your pension fund benefits.

Repo transactions for pension funds (from 1 August 2026). Pension funds hedge their foreign currency investments and need short-term cash in times of strong currency fluctuations. New: they may temporarily pledge securities against liquidity – a maximum of 1 percent of assets for general liquidity management, a maximum of 3 percent for at most 30 days for currency hedging, without a permanent leverage. This is only relevant for large funds. As an insured person, you notice nothing directly; at best, your fund's hedging costs decrease slightly.

In addition, there are two formal corrections: In the event of divorce, the savings to be divided accrue interest until the initiation of divorce proceedings (instead of until the judgement), and from 2030, the partial liquidation rules of pension funds use the terminology of Swiss GAAP FER 26.

Conclusion

The new beneficiary order is a step towards more self-determination, with a clear guardrail: spouses and children remain protected with at least 10 percent. Whether you want to make use of it depends on your family situation, your matrimonial property regime and the size of your 3a savings. We advise independently, without commissions and without our own 3a products. If you want to know how the change interacts with your will, your marriage contract and your 3a accounts, we will look at it together.

Want to know what it concretely means for your situation?

In the strategy meeting, we look at your 3a accounts, your family situation and your will together. Independent, without commissions.

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Frequently Asked Questions

What is the beneficiary order of pillar 3a?

The legal order in which your 3a savings are paid out in the event of death (Art. 2 BVV 3). It knows five ranks: spouse or registered partner, then children and life partners, then parents, siblings and other heirs. The first occupied rank receives the entire savings.

Can I already name my children as beneficiaries alongside my spouse today?

No. If you are married or in a registered partnership, the partner receives the entire savings today. Only from 1 June 2027 can you raise children or life partners to the first rank and set shares.

When does the new rule apply?

From 1 June 2027. The Federal Council decided it on 12 June 2026; providers need around a year to adapt and have their regulations approved.

Can I completely exclude my spouse?

No. Beneficiaries in ranks 1 and 2 are entitled to at least 10 percent of the savings. A share of 1 or 5 percent is not permitted. No lower limit applies to ranks 3 to 5.

What happens if I do nothing?

Then the previous order continues to apply: spouse first, then children and life partners. You must actively use the new flexibility and store it in writing with your 3a foundation, bank or insurance company.

Does this also apply to vested benefits accounts and the pension fund?

For vested benefits accounts, the rank change was already possible before; new from 1 June 2027 is the 10% lower limit (Art. 15 paragraph 3 FZV). The pension fund is not affected; there, your fund's regulations apply.

What changes for me because of the 13th AHV pension?

The 13th AHV pension will be paid out from December 2026 and has not counted towards the 85% limit in the pension fund since 1 August 2026. Your pension fund benefits will therefore not be reduced.

Sources

• Federal Council, media release "Ordinance adjustments in the 2nd and 3rd pillar", 12.06.2026: admin.ch
• BSV, explanatory report "Ordinance on the amendment of various ordinances in the area of occupational pension 2026", June 2026: PDF, ordinance texts and explanations
• BSV, report on the results of the consultation BVV 2 / BVV 3, June 2026: PDF
• Ordinance BVV 3, Art. 2, current version: fedlex.admin.ch
• Nantermod postulate 22.3220 "BVV 3. More flexibility in succession planning": parlament.ch

As of May 2026 · By Lukas Bachmann & Alessandrina Gull, innoVorsorge AG

Saving taxes in Switzerland is not secret knowledge, but most people only use a fraction of the legal levers. In this article you will find the most effective strategies for 2026 – with concrete CHF amounts, thresholds and calculation examples. From pillar 3a to pension fund buy-ins to the municipal tax rate: what actually makes a difference, what is new and where the most common mistakes happen.

Pillar 3a: The Most Obvious Lever

Pillar 3a remains the simplest tax deduction in Switzerland. The amount paid in is fully deducted from taxable income – federal, cantonal and municipal.

Maximum amounts 2026:

• With pension fund (employees): max. CHF 7,258 per year
• Without pension fund (self-employed without 2nd pillar): 20% of net income, max. CHF 36,288

What this means concretely: at a marginal tax rate of 30%, the full 3a contribution saves you about CHF 2,177 per year in taxes. Over 30 contribution years, that is over CHF 65,000 – from just this one deduction.

New since 2025: 3a catch-up

Since 1 January 2025, you can catch up on missed 3a contribution years. This applies to gaps from 2025, retroactively up to 10 years. Three conditions:

1. You must first pay the current year's contribution in full before filling a gap.
2. The gap of one year must be closed completely in one payment – partial catch-ups are not possible.
3. In the gap year, AHV-liable income must have existed.

Pension Fund Buy-In: Large Amounts, Large Impact

A voluntary buy-in into the pension fund is the strongest single lever for high incomes. The buy-in amount is fully deductible from taxable income – without an upper limit, as long as there is a buy-in gap in the pension fund statement.

Calculation example: CHF 50,000 buy-in at a marginal tax rate of 35% results in tax savings of CHF 17,500 – in a single tax year.

The most important rule: after a pension fund buy-in, a 3-year lock-in period applies for any capital withdrawal from the fund. The deadline runs day-precise. Anyone who withdraws capital within the lock-in period (e.g. for home ownership or early retirement) receives a retroactive tax bill – the original deduction is annulled, plus default interest.

Stagger 3a Accounts: Less Tax on Withdrawal

Paying into pillar 3a saves taxes. But upon withdrawal, the 3a funds are taxed separately at a reduced rate – which increases progressively with the withdrawal amount. Those who withdraw everything in one year pay unnecessarily much.

The solution: Maintain multiple 3a accounts and withdraw them staggered over different tax years. Only one account is liquidated per year, keeping the withdrawal amount low and the tax rate low.

• Optimal number: 3–5 separate 3a accounts
• Open a new account from about CHF 50,000 savings per account
• Example calculation: CHF 150,000 3a savings withdrawn over 3 years instead of all at once saves about CHF 4,693 in capital withdrawal tax

Home Ownership: What You Can Actually Deduct

Anyone who owns a property has the choice each year between two deduction types for property maintenance:

• Flat rate: 10% of imputed rental value (property under 10 years old) or 20% (from 10 years). In Canton Zurich, always 20% applies regardless of age.
• Actual costs: If your actual maintenance costs are higher than the flat rate, you can deduct these instead.

You may make this choice anew each year. In a year with a boiler replacement or roof renovation, take the actual costs; in quiet years, the flat rate.

Important distinction: Only value-preserving measures are deductible (repairs, renovations, energy measures). Value-enhancing work (extensions, pool, conservatory) is not tax-deductible.

Mortgage interest is 100% deductible from taxable income. This is one of the main reasons why many owners deliberately do not fully amortise their mortgage.

Other Deductions Often Forgotten

Beyond the big levers, there are a number of deductions that many tax returns do not fully utilise:

The commuter allowance in particular is often underestimated. Since 2026, a kilometre rate of CHF 0.75 applies. With 30 km one-way commute and 220 working days, that amounts to CHF 9,900 – of which a maximum of CHF 3,200 is deductible at federal level, but often significantly more at cantonal level.

The childcare costs of max. CHF 25,800 per child were massively increased in 2023 (previously CHF 10,100). Those who do not submit daycare receipts are potentially giving away several thousand francs in tax savings.

The Residence Effect

In no other country does the place of residence have such a direct impact on the tax burden as in Switzerland. The municipal tax rate determines how much you pay in addition to the cantonal tax.

Canton Zurich 2026 – the extremes:

• Cheapest municipality: Zumikon at 71% (since 2026 the lowest in the canton)
• City of Zurich: 119%
• Most expensive municipalities: Maschwanden and Bachs at 128%

The range is 57 percentage points. With a taxable income of CHF 200,000, the difference between Zumikon and Maschwanden can amount to several thousand francs per year.

A change of municipality is particularly worthwhile from a taxable income of around CHF 150,000 upwards. Below that, the difference in rental or property prices often eats up the tax advantage. The calculation must always consider housing costs and tax burden together.

Conclusion

Saving taxes in Switzerland does not work through a single trick, but through combining multiple levers. Maximising pillar 3a is the foundation. Pension fund buy-ins staggered over several years bring the greatest impact per franc. Staggering 3a accounts saves on withdrawal. Property deductions and the commuter allowance are chronically underutilised.

Anyone who systematically uses all levers can realistically save CHF 5,000–20,000 per year on middle to high incomes. Catch-up of missed 3a years from 2025 is a new tool that younger professionals in particular should use.

The concrete tax savings depend on your canton, municipality, income and family situation. Generalisations help little – an individual calculation brings clarity.

Crashes are unpleasant. But they are not the exception – they are part of the system. Anyone who invests long-term experiences at least two to three major downturns in their investing lifetime. The crucial question is not whether the next crash will come. But how you behave when it does.

The harsh truth: It is not the market that eats up your returns. It is you yourself.

What History Shows

Every crash feels uniquely terrible in the moment. Only in hindsight does it become clear how similar they are in their pattern: steep decline, longer recovery, then new highs.

Those who sold at the SMI low of March 16, 2020, exited at about 7,650 points. Six years later, the index stands at around 13,268 points – an increase of 73 percent without dividends. CHF 100,000 on the sidelines has shrunk in real purchasing power. CHF 100,000 that stayed in the portfolio would be worth around CHF 173,000 today.

The Most Expensive Return: The One You Give Away Yourself

The renowned Dalbar study has measured for decades the difference between the return an index generates and the return private investors actually achieve. The result is consistently disappointing.

Over 20 years, the average investor achieved 9.24% per year, while the index achieved 10.35%. Extrapolated to a CHF 500,000 portfolio over 20 years: the average investor gave away roughly CHF 700,000 in final wealth, purely through bad timing.

The Morningstar study "Mind the Gap" comes to a similar conclusion: over ten years, investors lose on average 1.1 percentage points per year compared to the fund return – that is about 15 percent of the total return. Sector funds are hit hardest: minus 2.6 percentage points per year. Volatile products lead to more emotional trading – and emotional trading costs money.

Why We All Make the Same Mistakes

Two psychological effects dominate every crash behavior.

Loss Aversion

The work of Nobel laureates Daniel Kahneman and Amos Tversky (Prospect Theory) shows: losses are felt about 2.25 times as strongly as equally large gains. The pain of losing CHF 10,000 feels greater than the joy of gaining CHF 10,000. In a crash, you want to stop the pain – so you sell. That this sale only cements the real loss feels irrelevant in the moment.

Recency Bias

We project recent events disproportionately into the future. After a week of red days, more red days seem inevitable. After three months of rising prices, rising prices feel like the norm. Both are wrong – but both feel right.

Anyone who knows these two biases recognizes them in themselves. Recognition alone does not heal. But it is the first step to overruling them.

Lump Sum vs. Staggered Investing

The Vanguard study examined from 1976 to 2022 whether a lump sum investment or staggered investing (dollar-cost averaging, DCA) performs better. The surprising result:

Why DCA at all? Because it is easier psychologically. Anyone who invests a fixed amount each month does not think about the optimal entry point. This prevents panic selling – and panic selling costs significantly more than the DCA disadvantage.

The best strategy is therefore usually not the mathematically optimal one, but the one you can stick with emotionally.

What You Should Actually Do in the Next Crash

The next crash will come. No one knows when. Whoever pretends to know is lying. What works instead of timing:

1. Keep automated saving.
   Your savings plan continues – especially during a crash. At the low you buy cheaply. This is not brave, but systematic.
2. Do not look at your portfolio daily.
   Anyone who checks prices hourly during a crash overloads themselves emotionally. One look per quarter is enough.
3. Build emergency fund first, then invest.
   Three to six months of expenses in cash. Those with an emergency fund do not have to sell at the worst time in a crash.
4. Take your risk profile seriously.
   If you panic at -30 percent, you were never "risk-seeking." A portfolio with 80 percent equities is not suitable for everyone.
5. Write down long-term goals.
   Why do you invest? Retirement? Home purchase? Freedom? In a crash, it helps to remember the reason.

The 2026 Context

What is the current situation? The Swiss National Bank has kept the key interest rate since March 2026 at 0.0%. Inflation is low at 0.3%, GDP growth is projected at around 1%. The SMI is trading at about 13,268 points – near the 52-week high of 13,323.

The Role of Independent Advice in a Crisis

Here it gets concrete: an independent advisor does not tell you in a crash to switch holdings, change your strategy or buy a new product – just because a commission can be earned. They tell you what you actually do not want to hear: "Stay the course."

That is not advice that generates much revenue. But that is exactly why it is most valuable in a crisis.

Conclusion

Crashes are normal. They are the price for the long-term superior return of equities. Those who do not accept them pay a different price: the lost return through emotional timing, which the average investor has demonstrated for decades.

The best strategy is rarely the most complex. It is the one you stick with. If you can honestly admit to yourself how much volatility you can tolerate, and if you have a plan you can cling to in the storm – then you are already ahead of 95 percent of investors.

In March 2026, the Swiss National Bank left the key interest rate at 0.0% again. After six consecutive cuts since 2024, Switzerland is effectively back at zero interest. To many this sounds abstract – but the impact on your everyday life is real. And it affects three areas simultaneously: saving, housing and pension.

Your Savings Account: Safe, but at a Cost

At first glance, a savings account is the safest thing there is. No risk, no effort, the money just sits there. But that is precisely the problem.

The major banks currently pay virtually no interest on savings accounts. UBS, Raiffeisen and ZKB are at around 0.05%, PostFinance at 0.00%. Even niche providers rarely exceed 0.5–1.0%. At the same time, inflation is around 0.3% – low, but not zero. And with larger amounts, wealth tax also becomes a factor.

This does not mean savings accounts are pointless. A liquidity reserve of 3–6 months of expenses belongs in a savings account. But anything beyond that slowly loses purchasing power.

Your Mortgage: SARON vs. Fixed – Three Scenarios

For property owners and buyers, the zero interest environment is fundamentally good news. But which mortgage fits? The honest answer: It depends on how interest rates develop. Instead of guessing, we calculate three scenarios – based on a mortgage of CHF 600,000.

The right choice depends on your situation – not on a rule of thumb. What matters is your risk tolerance, how long you want to hold the mortgage, and whether your budget can handle rate increases. Both models have their justification – and it is often worth comparing different providers before committing.

Your Pension: Saving vs. Investing Was Never So Clear

The zero interest environment is most evident in pillar 3a. Anyone who keeps their 3a savings in a pure savings account currently receives between 0.05% and 0.20% interest from major banks. Over a working life, that adds up – but barely.

In comparison, 3a fund solutions (e.g. with a high equity allocation) have achieved returns of 5–8% per year in recent years. The difference is enormous:

What Should You Do Now?

The zero interest environment is no reason to panic – but a good opportunity to review three things:

1. Savings account: Is there more than your liquidity reserve sitting there? Then your money is not working for you.
2. Mortgage: When does your current mortgage expire? Comparing multiple providers – not just your house bank – can save thousands of francs. And the question of SARON vs. fixed deserves a sober analysis rather than a gut feeling.
3. Pillar 3a: Is your 3a savings in a savings account? Depending on your investment horizon, switching to a fund solution could make a six-figure difference over the years.

Conclusion

A 0% key interest rate means: leaving money in a bank account has a price. Not in fees, but in missed opportunities. Those who consciously decide where their money sits – and do not just leave it where it has always been – will be better off in the long run.

Have you not paid the full amount into your pillar 3a in recent years? Perhaps due to a job change, further education, part-time work or simply because other things were a priority. Until now, the money was irrevocably lost – pillar 3a did not allow "catching up." That has changed.

Since 1 January 2026, the federal government has for the first time allowed contribution gaps in pillar 3a to be closed retroactively. This is the biggest innovation in private pension in years – and potentially affects hundreds of thousands of employed people in Switzerland.

What Exactly Is New?

If you paid in less than the maximum amount to pillar 3a in a given year, you can now close this gap retroactively. The key points:

• Retroactively up to 10 years – but only for gaps from the 2025 contribution year onwards. Older gaps remain unfortunately lost.
• Maximum amount 2025/2026: CHF 7,258 (employees with pension fund) or CHF 36,288 (self-employed without pension fund).
• Catch-up payments are tax-deductible – just like regular 3a contributions.

What Conditions Apply?

The catch-up payment is subject to clear conditions. All must be met simultaneously:

1. Earned income in the gap year: You must have had AHV-liable income in the gap year. Years with no gainful employment at all cannot be caught up.
2. Earned income in the catch-up year: You must also be employed in the year you make the catch-up payment.
3. Current year first: The maximum amount for the current year must be paid in full before catch-up payments are possible.
4. No age-related capital withdrawal: Anyone who has already withdrawn capital from a 3a account from age 59 (women) or 60 (men) loses the right to catch-up payments.
5. One gap = one payment: Each gap must be closed with a single payment – splitting over multiple years is not possible.

How Much Can I Catch Up?

An important restriction applies here: the catch-up payment is limited to the small maximum amount – i.e. CHF 7,258 per year (as of 2026). This also applies to the self-employed; the large maximum amount does not apply here.

How Does the Catch-Up Payment Affect Taxes?

The tax deduction applies in the year of payment – not retroactively for the gap year. So if you close a gap from 2025 in 2026, the catch-up payment reduces your taxable income in the 2026 tax return. Not that of 2025.

This is not a disadvantage – on the contrary: you can deliberately control which year you make the catch-up payment. Have a particularly high income? Then the catch-up payment is most worthwhile in exactly that year, because you can "save yourself down" into a lower tax bracket.

Who Benefits Most?

How to Proceed Concretely

What Else You Should Know

The 10-year rule builds up over time. Since only gaps from 2025 count, you can catch up a maximum of one year in 2026. In 2027, then two years, and so on. The full effect unfolds only from 2035.

Conclusion

The new catch-up option makes pillar 3a significantly more flexible. Those who have not maximised their contributions in recent years get a second chance. But: the rules are precise, and depending on your situation, an individual calculation is worthwhile.

As of February 2026 · By Lukas Bachmann & Alessandrina Gull, innoVorsorge AG

You found your dream property, the bank offers you 1.58% interest for ten years – sounds good. But did you know that another bank would have offered you 1.38% for the same property? On a mortgage of CHF 700,000, that is CHF 14,000 difference over the term. Just like that.

What most people do not know: if you had obtained multiple interest offers and negotiated, you would now be paying 0.2 percentage points less. That is CHF 14,000 more you pay on a CHF 700,000 mortgage over ten years! Just because you did not compare.

The Two Biggest Mistakes When Getting a Mortgage

Mistake 1: Only Getting One Interest Offer

Most buyers go to their house bank and accept the first offer. The Swiss mortgage market is a negotiation market. Banks, insurance companies and pension funds have different refinancing costs, risk models and margin targets.

Mistake 2: Not Getting a Second Opinion After a Rejection

If a bank rejects your financing, it does not mean the property is too expensive. It only means: this one bank, with its specific internal guidelines, comes to this conclusion.

Why Provider Differences Are So Large

• Valuation tools: Each bank uses its own models with different results.
• Treatment of pension assets: Some banks fully credit pillar 3a and vested benefits, others only partially.
• Risk appetite: Depending on portfolio strategy, banks have different LTV limits.
• Terms for existing customers: House banks often offer worse conditions than competitors.

What Independent Financing Advice Concretely Delivers

1. Analysis of your financial situation – income, assets, equity, affordability.
2. Selection of suitable providers – based on property, LTV and risk profile.
3. Obtaining and negotiating offers – including interest comparison and terms review.
4. Support until closing – with option for renewed comparison at renewal.

Conclusion

Independent financing advice costs something but usually saves a multiple. Those who compare multiple offers save tens of thousands of francs over the term. And those who do not give up after a rejection may secure their dream property.

You sign the new employment contract, resign from your old employer, look forward to the change. And in the coming weeks, things happen in the background that no one systematically informs you about – with financial consequences that can be five to six figures.

A job change is one of the most underestimated moments in Swiss retirement pension. Pension fund assets are shifted, risk insurance policies expire, tax planning opportunities open up. Those who only see the new job usually miss the three or four decisions that really matter.

What Happens When You Leave the Old Pension Fund

When you resign, you are entitled to the so-called leaving benefit – your entire retirement savings accumulated so far. The calculation is based on the Vested Benefits Act (FZG):

• Defined contribution (standard today): sum of all contributions paid in + entry benefits + interest.
• Defined benefit (rarer, especially public sector): according to a more complex formula.
• Minimum amount (Art. 17 FZG): contributed benefits and entry benefits plus interest (BVG minimum rate); risk premiums do not count.

The old pension fund must transfer the leaving benefit within 30 days of availability. After that, default interest applies (BVG minimum rate + 1%).

The Most Important Scenarios After Leaving

Vested Benefits Account vs. Vested Benefits Policy

The 3-Year Lock-In Period for Pension Fund Buy-Ins

One of the most important rules that hardly anyone knows – and that can cost thousands of francs in taxes.

Splitting: The One-Time Opportunity When Leaving

A rarely used but valuable lever: when leaving a pension fund, you can split your leaving benefit across up to two vested benefits accounts. This is the only opportunity – once consolidated, it remains on one account.

Why this matters: with a later capital withdrawal, you pay capital benefits tax. This is strongly progressive.

With even larger amounts, the effect grows. Those who withdraw CHF 1 million in three tranches can save CHF 20,000 to 40,000 in taxes compared to a one-time withdrawal.

Forgotten Pension Fund Assets: A Swiss Billion-Franc Problem

Every year, Swiss employees search for forgotten pension fund balances – billions of francs sit in vested benefits accounts whose holders have forgotten them. Those who have changed jobs several times, especially with foreign assignments, know this problem.

The good news: the Central Office 2nd Pillar at the BVG Security Fund offers a free search. Online form at sfbvg.ch, or in writing to Central Office 2nd Pillar, PO Box 1023, 3000 Bern 14.

The Most Common Mistakes

From our consulting practice:

1. Pension fund buy-in three years before retirement – and then capital withdrawal. Tax reclaim triggered.
2. No splitting done. Everything consolidated on one account – later only withdrawable as a whole.
3. Risk protection in the gap forgotten. Anyone who has an accident or dies between two jobs leaves dependents without pension fund claims.
4. Lost assets after multiple changes. With three or more job changes at companies that have merged or disappeared, the risk is real.
5. Wrong choice of pension vs. capital at later retirement, because the course was set wrongly years earlier at the job change.

Your Job Change Checklist

Conclusion

A job change is administratively trivial – but financially one of the moments where decisions move several thousand to several tens of thousands of francs. Most of these decisions cannot be reversed later: once consolidated, you cannot split again. Those who missed the continued coverage have missed it.

The effort of going through the points in a structured way at the next change is small. The benefit over 20 or 30 years is six figures.

While the money is in the pension fund or pillar 3a, much is regulated. The investment strategy is predetermined, fluctuations are barely noticed and decisions do not have to be actively made. With the withdrawal, this changes abruptly. The capital becomes visible, available and thus emotionally tangible.

All too often, it then sits in the account for months or years. Out of caution. Or because it is unclear what would be "right." Yet this phase is precisely the decisive one. Because from this point on, the capital bears the responsibility of securing a significant part of your livelihood.

Why Doing Nothing Is Also a Risk

A high bank balance initially conveys security. The money is available, visible and subject to no price fluctuations. In real terms, however, it is constantly losing value. Inflation also affects you in retirement – often even more strongly because a large part of your expenses is fixed or only limitedly adjustable.

A look at the development of consumer prices in Switzerland in recent years shows how quickly purchasing power is lost. Even in a comparatively stable environment like Switzerland, prices have risen noticeably since 2021. This effect is not spectacular, but constant. And therein lies the danger: the loss of value occurs gradually and is often underestimated in everyday life.

Anyone who withdraws capital from the pension fund or pillar 3a and leaves it in an account for a long period assumes that purchasing power remains stable. This assumption is deceptive. Every franc in the account may nominally feel the same, but in real terms, less and less can be financed with it year after year.

Structuring Assets in Retirement: A Framework

The goal of investing in retirement is not maximum returns, but a reliable combination of liquidity, return and security – tailored to your personal time horizon.

Differentiate between three pots:

1. Short-term liquidity (0–3 years)
This portion covers your regular expenses for the next 2–3 years. It stays in cash or very safe short-term investments. No market risk. Purpose: you do not have to sell investments at an unfavorable time to pay your bills.

2. Medium-term pension (3–10 years)
This portion is invested in conservative mixed funds or bonds with a slight equity component. The goal is to achieve a modest real return – enough to at least compensate for inflation.

3. Long-term accumulation (10+ years)
This portion is invested broadly in equities or equity ETFs. It is intended to continue growing in the long term and serve as a reserve for the later phase of retirement. Here, fluctuations are accepted because the time horizon allows for recovery.

The advantage of this three-pot strategy: You avoid the fatal sequence-of-returns risk – having to sell assets in a down market because you need liquidity. The short-term pot acts as a buffer so that the long-term pot can recover from market downturns undisturbed.

What Changes with Investment Strategy in Retirement?

Before retirement: Regular savings contributions balance out market fluctuations. Buying low is automated.

In retirement: Withdrawals replace deposits. If you have to withdraw capital when prices are low, you permanently destroy substance. This is called sequence risk.

Countermeasure: The three-pot model described above. Plus a withdrawal strategy that is adjusted annually rather than monthly or quarterly. This gives the portfolio time to recover between withdrawals.

Conclusion

Investing in retirement is not speculating. It is the conscious decision to protect your purchasing power instead of entrusting it to an account that loses value year after year. A structured approach with clear pots, defined time horizons and a solid withdrawal strategy has nothing to do with gambling – it is the responsible management of the capital you have built up over a lifetime.

Do not know where to start with your pension fund or pillar 3a capital? In our retirement planning, we develop a strategy that fits your personal situation and life goals – independent, clear, implementable.

Learn more about retirement planning

We have created a sample of a typical pension fund statement. In this blog, we go into the individual numbers and figures and explain how you can interpret them.

The Key Numbers on Your Pension Fund Statement

Annual salary
Your insured salary forms the basis for your pension fund contributions and benefits. It is usually your gross annual salary minus the coordination deduction.

Coordination deduction
This is the portion of your salary that is considered covered by AHV. In 2026, it is CHF 25,725. The coordination deduction reduces your insured salary.

Insured salary
Your annual salary minus the coordination deduction. This is the amount on which your contributions and benefits are calculated.

Savings balance
This is the capital you have accumulated so far. It grows through your regular savings contributions and employer contributions plus interest.

Interest rate on savings
The interest rate your pension fund credits to your savings balance. Compare it with other pension funds – differences of 1-2% per year make a huge difference over decades.

Purchased years (buy-ins)
Voluntary contributions you can make to close gaps or improve your benefits. These are tax-deductible.

Projected retirement pension
An estimate of your future pension based on current savings and projections. This is not a guarantee – it depends on future interest rates and your further contributions.

Why You Should Definitely Read Your Statement

Your pension fund statement tells you:

• Whether you are on track for retirement
• Whether you have coverage gaps
• Whether voluntary buy-ins make sense
• Whether your pension fund is performing well compared to others

Tip: Compare the interest rate on your savings balance with the average of other pension funds. If your pension fund is permanently below average, switching may be an option.

Common Misunderstandings

"The projected pension sounds low – will I really get that little?"
The projection is usually based on conservative assumptions. Many pension funds calculate with an interest rate of 2-3%. If your fund performs better, your pension may be higher.

"I cannot change anything anyway."
You can influence your pension: through voluntary buy-ins, choice of savings plan (if your fund offers one), and comparison with other funds when changing jobs.

"The statement is too complicated for me to understand."
That is exactly why we wrote this guide. Go through the numbers step by step. If you still have questions, we are happy to help.

Conclusion

Your pension fund statement is one of the most important documents for your retirement planning. The ten minutes it takes to read it are among the best invested time for your financial future. Keep the statement, compare it with the previous year, and note any changes.

Would you like a professional review of your pension fund situation? In our retirement planning, we review your pension fund together with all other pension components.

Learn more about retirement planning

As of May 2026 · By Lukas Bachmann & Alessandrina Gull, innoVorsorge AG

Fee-only advice means: you pay your financial advisor directly – by the hour or a fixed fee. Your advisor receives no commissions, retrocessions or payments from product providers. In Switzerland, there is no legally protected title for this. Anyone can call themselves "independent" – even those who live on kickbacks. This article explains how to recognise true independence and why it is crucial for your wealth.

Commission-Based vs. Fee-Only: Two Worlds

In Switzerland, there are basically two compensation models for financial advice:

Commission-based (brokerage model): The advisor is paid by product providers – banks, insurance companies, fund companies. You pay seemingly nothing for the advice. In reality, you finance the commission through hidden costs in the product: front-end loads, trail commissions, retrocessions.

Fee-only: You pay the advisor directly. No money flows from product providers. The advisor has no financial incentive to recommend a particular product. The advice costs you a transparent CHF 150–400 per hour or a fixed fee per topic.

CHF 3 Billion: The Hidden Redistribution

According to SFAMA, around CHF 3 billion in distribution commissions flow annually in the Swiss fund market. The consulting firm Finalix estimated the total volume of retrocessions at CHF 4.2 billion – that is 12.4% of total value creation in the banking sector.

How high are these kickbacks concretely?

With a classic Swiss asset management, according to VZ Wealth Center, you often pay 1.5–3% per year in total costs. On CHF 500,000, that is CHF 7,500 to CHF 15,000 per year. Over 10 years: up to CHF 150,000.

What Does the Law Say? The Swiss Special Model

The Financial Services Act (FIDLEG), introduced in 2020, regulates transparency in financial advice. Article 26 FIDLEG allows retrocessions under two conditions:

1. The advisor informs you in advance about the type and scope of the compensation and you expressly waive its surrender, or
2. The advisor passes the retrocessions on to you in full.

That sounds like protection. In practice, it means: most clients sign a standardised waiver in the terms and conditions – without understanding how much money they are waiving.

The Federal Court Has Set Clear Boundaries

What many do not know: the Federal Court has clearly ruled in several judgments:

• BGE 132 III 460 (2006): Retrocessions belong to the client. They must be disclosed and surrendered.
• BGE 138 III 755 (2012): All types of distribution compensation – trail commissions, distribution fees – fall under this obligation.
• BGE 144 IV 294 (2018): Those who conceal retrocessions may be criminally liable for disloyal business management (Art. 158 Criminal Code).

The statute of limitations is 10 years. Yet few clients reclaim their retrocessions – simply because they do not know how much money they are owed.

Who Is Really Independent in Switzerland?

The term "independent" is used generously. A critical look at common models:

Large advisory firms position themselves as independent. Critics – including the Handelszeitung and Basel-based lawyer Monika Roth – point out that some of these firms earn money with their own investment solutions and use free retirement advice as an acquisition channel for in-house asset management.

Digital asset managers (robo-advisors) work transparently with low costs (0.45–0.72% all-in) and forego retrocessions. Their model is close to the fee-only idea, but offers no individual advice on pension, taxes or protection.

True fee-only advisors – firms that are paid exclusively by the client and receive no compensation from product providers – are still rare in Switzerland. There is no central association and no public register.

How to Recognise True Independence

Five questions you should ask any financial advisor:

1. "Do you receive commissions or retrocessions from product providers?" – An honest fee-only advisor clearly says no.
2. "How exactly do you earn money from my advice?" – The answer must be a concrete amount or hourly rate, not "the advice is free."
3. "Do you use your own investment products or funds?" – In-house products are a conflict of interest.
4. "Can you recommend products from any provider?" – True independence means: open product universe.
5. "What does your compensation look like if I buy nothing?" – Those who only earn on completion do not advise independently.

What Fee-Only Advice Costs – and What It Saves

Fee-only advice has a clear price. You pay for the advice, not for a product. Typical costs:

• Single topic (e.g. pension, budget, investing): CHF 390–690
• Comprehensive financial plan: CHF 840–2,000
• Hourly rate: CHF 150–400/h

That sounds like a lot – until you compare it with hidden costs: anyone investing CHF 500,000 with a traditional bank at 2% total costs pays CHF 10,000 per year. In 10 years: CHF 100,000. A one-time fee-only consultation for CHF 840 that puts you in a cost-efficient portfolio saves a multiple of that.

Conclusion

In Switzerland, there is no protected title for independent financial advice. FIDLEG allows retrocessions as long as they are transparent. Most clients sign the waiver. CHF 3 billion flow annually as kickbacks – money that belongs to you.

True fee-only advice means: your advisor has no income other than your fee. No commissions. No product sales. No conflicts of interest. That is uncomfortable for the industry. But that is exactly what makes it valuable for you.

As of January 2025 · By Lukas Bachmann & Alessandrina Gull, innoVorsorge AG

The Swiss retirement system consists of three pillars: AHV/IV (1st pillar), occupational pension (2nd pillar) and private pension (3rd pillar). The 3rd pillar has become an indispensable supplement for securing your financial future. In 2025, there are several points to consider to get the most out of private pension.

What is the 3rd Pillar?

The 3rd pillar is the private supplement to state and occupational pension, serving to close individual pension gaps. It is divided into two areas:

Maximum Contribution Amounts 2025

Contributions to pillar 3a can be directly deducted from taxable income. The amount of tax savings depends on your income and place of residence and can quickly amount to several thousand francs per year.

New Regulation: Closing Gaps from 2025

A key innovation affects people who had contribution interruptions in pillar 3a. Until 2024, it was not possible to catch up on missed payments. Since 2025, eligible individuals can close gaps of the last ten years through additional contributions under certain conditions.

Investment Strategy by Life Phase

Optimising Your 3a Account

1. Start early: The earlier you begin, the longer your capital can grow.
2. Spread across multiple accounts: Optimise tax progression upon withdrawal.
3. Invest in funds: Instead of a savings account, use pension funds for higher return potential.

Conclusion

In 2025, pillar 3a remains one of the best ways to secure your financial future. Use the current contribution limits, close any gaps and adapt your investment strategy to your life phase.

And when they come, it is usually too late to change anything. That is why insurance and finances are an annoying topic for many – yet it is essential to engage with them precisely for the scenarios described above. In this blog post we cover everything you need to know on this topic and give you a step-by-step framework for ensuring that you are at least financially okay in an emergency.

Note: We are completely independent. As an independent company, we have not a single commission agreement with any insurance company or any other company. That is why you will not find any company names or recommendations with us. We educate and tell you how to proceed.

Overview of Scenarios

There are 4 different scenarios relevant to protection:

1. Disability due to accident
2. Disability due to illness
3. Death due to accident
4. Death due to illness

Each of the 4 scenarios has different prerequisites and consequences. Let us look at them more closely.

Disability due to illness – what does that mean concretely?

If you can no longer work due to illness (called incapacity for work or disability) , a patchwork of benefits kicks in.

These benefits are possible:

• Continued salary payments: Legally regulated, can last between 3 weeks and 6 months. This depends on your years of service with your employer.
• Daily sickness benefit insurance: From the end of the continued salary obligation, daily sickness benefits cover approx. 80% of your last salary. However, daily sickness benefit insurance is not mandatory for an employer. Smaller employers in particular often do not have such insurance, creating a gap.
• IV pension (1st pillar): Entitlement only after 2 years at the earliest and only with >40% disability. The degree of disability is determined by the doctor and determines the benefits you receive from insurance. You receive a full pension from a disability degree of at least 70%. You then receive an AHV pension calculated based on your previous salary until retirement (on average approx. CHF 1,800 per month).
• BVG disability pension (2nd pillar): If you have a pension fund connection through your employer, you also receive a disability pension there. How much depends heavily on your income and the pension fund.

As you can see, a lot depends on your individual situation. However, the following problems are common in Switzerland:

• Gaps between continued salary payments and receipt of a disability pension. If your employer does not have daily sickness benefit insurance, you are financially stranded after 6 months at the latest.
• Partial disability is poorly covered. If you become only partially disabled, benefits from IV and the pension fund can quickly become vanishingly small.
• Self-employed individuals or people with a large commission portion of their salary. For these people, the insured salaries and therefore the benefits they would receive in case of disability are often significantly lower than their current income.

Disability due to accident – what does that mean concretely?

If you can no longer work due to an accident, the situation looks different.

Since accident insurance is mandatory for employers in Switzerland, you are already well covered as an employee in this regard. In case of disability, you receive about 80% of your last salary from the accident insurance from the 3rd day after the accident. After 2 years following the accident, this "pension" can even increase to 90% due to supplements from the disability insurance.

Conclusion: Only 6% of all disability cases in Switzerland are caused by accidents. Therefore, accident insurance is cheap and usually sufficiently covered. For self-employed individuals, taking out accident insurance is therefore essential!

Death (illness or accident) – what does it mean for surviving dependents

In case of death, it depends on how well you have arranged what happens afterwards:

These benefits could flow:

• AHV widow's/orphan's pension: Only with marriage or children – often minimal amounts. Depends again on the income of the deceased person.
• Pension fund benefits: Only if beneficiaries are correctly registered. This is often forgotten, especially in registered partnerships.
• 3rd pillar funds: Payout to defined persons – but often outdated or even incorrectly declared.

Typical gaps we often see in consultations:

• Unmarried couples: There is no entitlement to partner pensions from AHV. Often no entitlement arises in the deceased's pension fund either. And if so, only with a shared household of at least 5 years before death or shared minor children. In addition, due to very low tax-free allowances in inheritance tax, bequeathing to a life partner can become expensive.
• Patchwork families: Legal inheritance often contradicts the will of the deceased and therefore must be specially regulated.
• Single parents: Children often receive only minimal orphan's pensions.

Conclusion: While it no longer matters to the deceased, the surviving dependents are often dependent on everything having been properly arranged during their lifetime. Especially for people with their own home, not regulating this can be costly.

Concrete Guide: How to Proceed

☐ Check your pension fund statement – what does it say under "Benefits in case of disability"? Note the pension you would receive (Important: you only receive this pension for full disability; with a degree of disability of 40-69% you receive a portion of it).

☐ Get an AHV pension estimate – how much IV pension would you receive in an emergency? You can easily do an estimate online using the following link. Enter your details and average income (the IV calculates your past average income and extrapolates it to retirement). AHV/IV pension estimate

☐ Compare with your budget – are these two pensions enough to live on in case of disability? Create a budget for this (what you would actually still have in expenses in such a case), without savings contributions, pillar 3a, etc. If the pension amount is greater than your budget – congratulations, you do not need to change anything. If not, the next point is relevant for you.

☐ Check life insurance – cover your gaps, but no more! If you already have life insurance, look at the policy more closely. Is a loss-of-earnings pension insured in it? You would also receive this in case of disability. Simply put: if you have a gap between pensions and your budget, you need loss-of-earnings insurance in the amount of this gap. If your existing policy covers this – perfect. If not: insure exactly this gap amount and nothing more. IMPORTANT: The big business of insurance companies consists of combining these insurances with lots of other stuff – death insurance, 3rd pillar, etc. Make sure this is not the case and avoid exorbitant costs.

Do you have life insurance but are unsure whether it makes sense? We review the policy independently as part of our pension consulting and tell you what it covers and what it costs:

Pension & Protection Consulting →

☐ Check daily sickness benefits – clarify with your employer whether daily sickness benefit insurance is taken out for you. You can often find this information in your employment contract. Otherwise, ask your boss or HR. If it is not taken out, definitely insure this with an insurance company. Same principle as above, only insure what you need and nothing more!

☐ For couples, nominate each other in the pension fund – if not already done, definitely register your partner as a life partner with your pension fund. If you have lived together for more than 5 years or have shared minor children, this is possible. This prevents the other person from being left completely empty-handed in case of death.

☐ Look at the death scenario – what would happen if you died tomorrow? As a rule of thumb: if financially no one depends on you (partner, children, etc.), you do not need death insurance. If someone depends on you financially, the situation becomes very individual. Basically: check the need first before taking out expensive insurance.

Why Independence Is So Important on This Topic

Unfortunately, the only companies that currently look at this topic with you are insurance companies. They do it for free but clearly with the goal of selling you insurance. This alone shows why independence is so incredibly important on this topic. Because:

• Insurance salespeople live on commissions
• Many recommendations are not need-driven but profit-driven
• People are often over-insured – and at the same time forget the essentials: the costs!

Example from our daily life: A single man in his mid-20s has death insurance of CHF 100,000. No property, no children, no obligations. Completely pointless, right? No one is financially dependent on him. Completely wrong priorities, triggered by sales pressure.

That is why it is so important to look at this topic with someone who can also honestly tell you when you are already well positioned and do not need new insurance.

A Quick Word from Us

If you now want to look at this with someone completely independent, want to save yourself the effort of a protection analysis, or have special questions: take a look at our pension analysis. In it, we analyze these exact points among others, but also discuss your general financial, pension and investment situation. Because we have no commission contracts, the consulting does cost something, but relative to the cost of taking out insurance you do not even need, it is still significantly cheaper 😉

And if you have read this far, use the discount code "INNO50" when booking for CHF 50 discount.

Learn more about the Pension Analysis

Conclusion

Anyone who has not arranged what happens in case of accident, illness or death leaves themselves and their loved ones to chance – or the state. The biggest gap does not arise from missing insurance, but from missing clarity.

The good news: You do not need complicated products, but clarity. We hope to have given you a suitable guide with this article.

As of May 2026 · By Lukas Bachmann & Alessandrina Gull, innoVorsorge AG

One of the most important decisions of your life – made with heart and mind. You stand at a viewpoint and look over the landscape of your coming years. In your luggage: your pension fund savings – hard-earned over decades. Now the big question arises: Would you like to receive a reliable monthly amount as a pension, or rather decide yourself how to use the capital?

Both paths have their appeal – and both bring responsibility. In this article we show the opportunities, risks and give you the tools to choose with confidence the right path for you.

Two Paths, One Goal: Security in Retirement

At retirement, you generally have two options for withdrawing your pension fund savings:

• The pension: A monthly amount, guaranteed for life.
• Capital withdrawal: A payout of your accumulated savings that you can freely use.

Many people also consider a combination of the two options – a decision that deserves careful thought.

The Pension – Predictability and Security for Life

Perhaps you know someone who already receives their pension month after month and does not have to worry about stock market prices or life expectancy. That is exactly the great advantage of the pension.

Capital Withdrawal – Freedom with Responsibility

A world trip, a cottage in the countryside or support for the children – all of that sounds tempting. But: Capital withdrawal is primarily there to cover your living costs. Dreams are allowed – but only if your financial security is guaranteed in the long term.

Pension vs. Capital: The Direct Comparison

The Mixed Solution – Pension & Capital Combined

While a combination is not possible or sensible for everyone – many Swiss people increasingly choose this option. It secures a certain basic income through the pension, while the capital leaves more room for freedom.

Practical Tips for a Sound Decision

1. Inform yourself early: Start planning at least 2 to 3 years before retirement. Ideally from age 50.
2. Check the regulations: Some pension funds require notification of capital withdrawal 6 months before retirement – otherwise the pension is automatically chosen.
3. Have taxes simulated: Calculate together with a professional how capital or pension withdrawal affects your tax burden – for years ahead.
4. Include your life partner: Especially for married couples, the allocation of benefits can be strategically sensible.
5. Think long-term: Life expectancy is rising – plan better with 90 or 95 years, not 80.

Conclusion: A Decision for Life

The decision for pension or capital is one-time – and final. It cannot be reversed or changed later. That makes it all the more important to take your time, play through different scenarios and seek professional advice.

Especially when it comes to your own retirement, financial protection or long-term life planning, you need clarity, trust and an honest look at your own situation. The independence of the consulting plays a central role – it is the foundation for objective recommendations and sustainable decisions. But not every consulting that calls itself independent actually is.

What True Independence Means

True independence in financial consulting means: The advisor is exclusively committed to the client – not to a product, not to a provider, not to a bank or insurance company.

Concretely, this means:

• No commissions for the conclusion of insurance policies, investments or other products
• No hidden agreements with banks, fund providers or insurance companies
• No bonus targets that reward the sale of certain products
• No distribution contracts that limit product selection to certain providers

Only when none of these conflicts of interest exist can a recommendation be truly objective.

Where Independence Often Ends

Many advisors advertise their independence but work with so-called "independent brokerage houses." These receive commissions from product providers, which are partially passed on to the advisor. The consequence: even if no direct commission is visible to the client, the product selection is still influenced by the compensation structure.

Indicators that reveal a lack of independence:

• The analysis is offered free of charge (costs must be recouped somewhere)
• You are shown only products from certain provider groups
• The same product is recommended regardless of your individual situation
• The advisor cannot or will not explain the compensation structure

True Independence Has a Price – But Saves More

Independent consulting is not free. Fee-based consulting models – also called fee-only consulting – are paid directly by the client. This means: you pay for the advisor's time and expertise instead of indirectly financing it through commissions on products.

A common misconception is that free initial consulting is the rule. In reality, when consulting is free, the product is usually the one paying – and that product is rarely the cheapest or best solution for you.

Independent consulting in comparison:

Why We Founded innoVorsorge

We founded innoVorsorge precisely because we were convinced that truly independent retirement consulting is not a luxury but a necessity. Without commission contracts with banks, insurance companies or fund providers, we can focus entirely on what matters: your best interests.

Our consulting is paid exclusively by our clients. This is the only way we can guarantee that our recommendations are objective, transparent and solely based on your personal situation.

Conclusion

True independence in financial consulting is not a marketing label but a fundamental attitude. It requires a business model that does not live from product commissions but from client fees. Anyone who relies on truly independent advice has the best chance of receiving recommendations that are tailored to their needs – and not to the margin of a product provider.

Would you like to experience true independence? In our consulting, we demonstrate what it means to receive objective advice without hidden interests.

Learn more about our consulting services

In Switzerland, there are three variants that govern your financial partnership – and determine what belongs to both of you, what belongs to each individually, and how assets are divided in case of separation or death.

Sounds dry? Maybe. But the choice of property regime is like a foundation. If it fits, it carries you safely through all phases of life. If it does not, things can get quite uncomfortable in stormy weather.

1. Participation in Acquisitions – the default

Without a special marriage contract, participation in acquisitions applies automatically. Simply put: everything you jointly earn during the marriage is shared in case of separation or death. This includes salaries, interest, pension fund assets – the so-called acquisitions.

What remains yours personally?
Your pre-marital assets, inheritances and gifts – these are your personal property. They continue to belong to you alone even in case of separation or death.

Suitable for:
Couples without special risk – e.g. when both earn similarly and have no complex asset structures.

2. Community of Property – everything in one pot

This one is binding: with community of property, everything you have belongs to both of you jointly – including what you owned before marriage.

Advantage:
There is no complicated division between personal and joint assets. Everything is simply "ours."

Disadvantage:
Debts also belong to both. Anyone running a business or taking financial risk involves their partner more heavily.

Suitable for:
Couples who truly want to share everything – including responsibility and risk. Popular with older couples or when there are no children from previous relationships.

3. Separation of Property – clear lines

With separation of property, everything that belongs to you remains strictly separate – even during the marriage. Income, assets, inheritances: each person manages and keeps what belongs to them.

Advantage:
Clear arrangements, especially when one person is entrepreneurial or takes on larger risks.

Disadvantage:
There is no financial participation in the other's success – even when that success was made possible through shared life decisions.

Suitable for:
Entrepreneur couples, patchwork families, or when one partner brings very substantial personal assets.

How to find the right property regime

The right choice depends not just on gut feeling, but on your goals, your assets and your risk tolerance. Ask yourselves these questions:

• Do we want to manage everything jointly or set clear boundaries?
• Are there businesses, properties or inheritances that need protection?
• What does our protection look like in case of separation or death?

Tip: Talk openly about money – even when it is uncomfortable. The biggest conflicts arise when you do not talk about it.

Our advice from practice

We repeatedly encounter couples who only think about the property regime when it is already too late. Yet early, independent advice can help avoid later disputes and costly court proceedings.

In our pension analysis or retirement planning, we look not only at your finances and insurance but also at legal framework conditions such as marriage contracts, inheritance law and advance directives. Because pension is more than just a retirement pension – it often begins on the wedding day.

Conclusion

The property regime is not a romantic topic – but it is one that can protect your relationship long-term. Those who choose it consciously save themselves many worries later on.

Would you like to know which property regime suits your life and asset situation?

Book a holistic pension analysis

Whether you are a new parent or already navigating everyday life with school-age children: suddenly it is not just your own life that matters, but also that of your little ones. And with this new sense of responsibility come new questions:

• How can we ensure our family is protected in an emergency?

• How can we possibly save money when everything is getting more expensive?

• And what does pension actually mean for families?

That is exactly what this article is about. No jargon. No sales. Instead, three concrete tips that will help you immediately.

1. Budget: The foundation of family pension

Most young families experience it sooner or later: More expenses, less income – because of part-time work, daycare costs, or unexpected expenses.

A family budget is worthwhile – not just for control, but to create security:

• What comes in? (Salaries, child allowances, side income)
• What goes out? (Fixed costs, groceries, childcare, insurance)
• What remains – and how can you plan with it consciously?

Tip: Do not calculate "optimistically" – be honest. And plan for real everyday life – with spontaneous birthday parties, burst rain boots, and unplanned doctor visits.

Use our free budget calculator

2. Protection: When everything changes suddenly

What happens to your family if one of you suddenly cannot work? Whether due to illness, accident or death – nobody wants to experience such situations. But especially with children, you should think them through.

The problem:
State benefits (AHV, pension fund) often only cover part of the need – and apply only under certain conditions (e.g. marriage).

The solution:

• A private risk insurance policy costs little but secures your existence in an emergency. However, this should be well planned to avoid unnecessary costs!
• Even in case of disability, supplementary insurance can help cover gaps in income protection.
• Couples living in a registered partnership must take action themselves – otherwise children and partners remain unprotected.

Tip: Have your current protection reviewed by an independent party – and then obtain various suitable quotes.

3. Saving: Possible even with a family – just differently

Many families think: "We have nothing left to save." But often it is not the money that is missing – it is the system.

Here is how it still works:

• Automate saving: Standing order right when salary arrives – even CHF 50 monthly makes a difference long-term
• Do not forget your own pension: The best security for your child is financially stable parents. Save primarily for yourselves to remain flexible.
• Children's saving done right: Instead of a savings account, invest in broadly diversified ETFs to benefit from compounding long-term.

Example: Anyone investing CHF 100/month for a child in an ETF savings plan can achieve over CHF 35,000 after 18 years – without paying in more than with a classic savings account, which would yield barely CHF 22,000.

Conclusion: Family pension is not a luxury – it is common sense

You do not need to be finance professionals – but you should consciously engage with your new phase of life.

That is why we at innoVorsorge AG have developed a compact, honest guide specifically for young families – with all important topics explained clearly:

Download for free

What awaits you in the guide:

• Budget checklist
• Death and disability protection
• Savings strategies for families and children
• Practical links and templates (advance directive, living will, etc.)

Would you like to discuss your individual situation with an expert independently and optimize it concretely? In our pension analysis, we holistically review your financial and pension situation and guide you step by step through the pension jungle.

Learn more

Early retirement offers opportunities – but also risks. It affects not only finances but also your psychological, social and health situation. In this article, we show you what you should absolutely consider when retiring early – including pitfalls that are often overlooked.

The Big Question Before Early Retirement: Will Your Money Last Until 90 (or Longer)?

Anyone who stops working earlier not only has to expect less income – but also has to live off it for longer. And this is exactly where the first pitfall lies: many people underestimate the duration of retirement. Life expectancy today is over 85 years – with an upward trend.

An example: If you retire at 60, you need at least 25 years of income – without ongoing salaries, often without AHV (until 65) and often with reduced pension fund benefits.

The typical financial impacts:

• AHV reduction: If you take AHV early, you must accept lifelong deductions of up to 13.6%. Reversing this is not possible.
• Pension fund reduction: Early retirement from the pension fund usually means a reduction. Many pension funds calculate a penalty of 0.3–0.5% per year of early withdrawal.
• Longer funding period: The same capital must last for more years – which increases pressure on the withdrawal rate.

A rough calculation: If you retire at 63 instead of 65 and have a pension fund capital of CHF 500,000, you lose around two years of contributions and price increases. Depending on the pension fund, this can mean a permanent pension reduction of CHF 400–800 per month. Over 25 years, that adds up to CHF 120,000–240,000 less in retirement income.

The Psychological Side: An Often Underestimated Factor

Many people focus exclusively on the financial aspects of early retirement. Just as important, however, is the psychological preparation. Work provides not only income but also structure, social contacts and a sense of purpose.

Typical challenges:

• Loss of daily structure and social environment
• Sudden transition from "full schedule" to "endless free time"
• Identity questions: who am I without my professional role?
• Partnership dynamics: couples who have not spent much time together for years must first find a new way of living together

Tip: Plan your transition. A phased retirement over 2-3 years – with gradually reduced workload – gives you time to adjust socially and psychologically.

Hidden Costs That Are Often Forgotten

Early retirement changes not only your income situation but also your spending structure. Some costs increase:

• Health insurance: Premiums often increase after retirement and usually cannot be reduced below a certain minimum.
• Hobbies & travel: More free time often means higher spending on leisure activities.
• Household & living: If you no longer commute, everyday costs shift – not always downwards.
• Tax burden: Depending on how you withdraw your pension fund capital, the tax progression can be significant in the year of withdrawal.

Our Framework for Early Retirement

A well-planned early retirement follows four steps:

Step 1: Financial inventory – Review all assets, pension entitlements (AHV, pension fund, pillar 3a) and expected expenses. Create a realistic retirement budget.

Step 2: Gap analysis – How much money will you have each month from age X? Compare this with your expected expenses. The gap shows you how much additional capital you need.

Step 3: Strategy development – Should you purchase pension fund years? What is the optimal withdrawal strategy for pension fund and pillar 3a? Does a phased retirement make sense?

Step 4: Stress test – Test your plan for different scenarios: What happens if the stock market falls? If life expectancy increases? If care costs arise?

Tip from our practice: A common mistake is insufficient diversification of pension fund withdrawals. Anyone who withdraws the entire pension fund capital in one year often faces a heavy tax burden. Staggered withdrawal over several years or a mix of pension and capital can significantly reduce the tax burden.

Conclusion

Early retirement can be a wonderful thing – but only if you plan it carefully. The financial aspects are complex, the psychological side effects are often underestimated, and the tax consequences can be painful if not thought through.

If you are considering retiring early, take enough time for the planning. An independent, holistic review of your situation is the best investment you can make for your retirement.

Would you like to know whether early retirement is an option for you? In our retirement planning, we simulate various scenarios and show you exactly what it means financially.

Learn more about retirement planning

As of July 2025 · By Lukas Bachmann & Alessandrina Gull, innoVorsorge AG

Many people believe that retirement planning only becomes relevant shortly before retirement. A dangerous misconception, because early planning offers enormous advantages. This article shows why pension pays off at every age – and why starting today is the best strategy.

Why Starting Early Pays Off

Compound interest is the most powerful force in finance. The earlier you start saving, the more time your money has to grow. Anyone who starts saving CHF 200 per month at age 25 will have around CHF 330,000 by age 65 – with 5% return. The same amount starting at age 45 yields only about CHF 80,000.

What Happens at Different Life Stages

The Danger of Waiting

Those who start late face significantly higher hurdles: catch-up requires much higher savings rates, compound interest has less time to work, and options like pension fund buy-ins become more expensive at an older age. Withdrawal strategies are less flexible.

Conclusion

Retirement planning is not a question of age – it is a question of mindset. Starting early gives you the greatest flexibility, the lowest costs and the best chance of a financially secure retirement. The best time to start? Today.