At a glance
- Start early: from age 50 to take stock, because closing a gap takes years.
- Three income sources: AHV and LPP aim for about 60% of your last salary; pillar 3a and savings fill the rest.
- Work out your gap: expected expenses minus expected pensions; that is the amount to fund.
- Irreversible decisions: pension or lump sum, and staggered withdrawals, are planned years ahead.
- Nothing is automatic: the AHV pension claim is filed 3 to 6 months before retirement.
Preparing for retirement in Switzerland means estimating your future income from the three pillars, comparing it with your expected expenses, closing the gap and optimising how you draw down your assets. The earlier you start, the more levers you have: buy-ins, pillar 3a, choice of retirement date, tax staggering. Here is the roadmap, step by step.
The steps at a glance
- From age 50: review your three pillars, search for forgotten assets, draft a first budget.
- Around 55: close the gaps, LPP and pillar 3a buy-ins.
- 5 years before: set your retirement age and prepare the pension-versus-lump-sum choice.
- 1 to 2 years before: irreversible decisions and pension-fund notice periods.
- 3 to 6 months before: AHV claim, employer notice, accident insurance.
Where to start: your three retirement incomes
In Switzerland, your retirement income comes from three sources, each with its own rules. Understanding them is the basis of any planning.
- 1st pillar (AHV): the state pension covering basic needs. Its amount depends on your contribution years and average income. Details in our guide to AHV pensions.
- 2nd pillar (LPP): occupational pension, designed to maintain your standard of living. See our guide to the 2nd pillar.
- 3rd pillar: voluntary private savings that top up the first two while reducing your taxes. See our guide to pillar 3a.
The system aims for AHV and LPP together to cover about 60% of your last salary. That rarely suffices to maintain your standard of living: it is precisely this gap that planning sets out to close.
When to prepare for retirement? The timeline
Retirement planning happens in stages, each with its own decisions. Here is the ideal timeline.
From age 50: take stock
This is the time to assess, while there is still time to act.
- AHV statement: request your individual account statement to spot any contribution gaps.
- LPP certificate: review your pension certificate to see your projected capital and buy-in potential.
- Forgotten assets: search for old assets and consolidate your vested benefits accounts.
- First budget: estimate your future expenses to set a savings target.
Around 55: close the gaps
This is the strategic phase for your taxes and future benefits.
- LPP buy-ins: every franc paid into your fund is deductible from taxable income. Mind the 3-year rule before any lump-sum withdrawal.
- Pillar 3a: pay up to the annual limit and, since 2025, consider retroactive buy-ins to close missed years. See our pillar 3a guide.
5 years before: set the age and plan
Two major decisions are prepared here.
- Retirement age: ordinary, early or deferred. Each option changes your pensions for life.
- Pension or lump sum: an irreversible choice for your 2nd pillar. Compare both in our pension or lump sum guide.
1 to 2 years before: the irreversible decisions
Time to lock in the choices and meet the deadlines.
- Confirm pension or lump sum: and tell your fund within the notice period, often 3 months to 3 years before retirement.
- Stagger withdrawals: spread capital withdrawals over several tax years to reduce tax. See our withdrawal tax guide.
Notice period: if you miss your fund's deadline to request a lump sum, the benefit is paid automatically as a pension. Check your rules from age 55.
3 to 6 months before: the formalities
The administrative home stretch.
- AHV pension claim: file it with your compensation office 3 to 6 months before reference age. Nothing is automatic.
- Employer notice: within your notice period.
- Accident insurance: once you stop working you are no longer covered; add cover through your health insurer.
Work out your pension gap
The pension gap is the difference between your needs and your guaranteed retirement income. It is simple to calculate:
Annual gap = expected expenses − (AHV pension + LPP pension + private income)
If the result is positive, you will need to fund it through savings, investments or pension capital. It is the central figure of any planning: it sets how much to save and which levers to pull.
Estimate your retirement income in 2 minutes
Work out your future pensions (AHV, LPP, pillar 3a capital), your gap and the capital available at retirement.
Simulate my retirement
Draw up your retirement budget
To estimate your expenses, separate fixed from variable. That is the basis of a realistic budget.
- Fixed expenses: housing (rent or ownership costs), health insurance and care, taxes, insurance, transport, telecoms.
- Variable expenses: travel and leisure, sports and culture, dining out, small pleasures, everyday equipment.
- One-off future expenses: home renovation, replacing a car, health or home-care costs.
Compare this budget with your projected income: the difference is the gap to fund. Also consider your mortgage, whose affordability is reassessed at retirement.
The optimisation levers
Three levers can improve your situation. Each has its own guide; here is the essence.
LPP and 3a buy-ins
Paying voluntarily into your pension fund or making up missed 3a years reduces your taxable income and increases your benefits. The tax saving follows your marginal rate. Mind the 3-year rule between an LPP buy-in and a lump-sum withdrawal.
Tax staggering of withdrawals
Pension capital is taxed separately, at a reduced but progressive rate. Withdrawing your assets (2nd pillar, vested benefits, 3a accounts) over several tax years breaks this progression and saves thousands of francs. For couples, withdrawals in the same calendar year are added together: they must be coordinated.
The pension-versus-lump-sum choice
A pension guarantees income for life but largely ends on death and is taxed as income. A lump sum offers flexibility and inheritance, but must be invested to last. A mixed solution is often the most balanced.
Your specific situation
Some paths call for specific planning:
- Early retirement: bridge the income gap before AHV and measure the reduction in pensions. See our retirement planning guide.
- Self-employed: without a 2nd pillar, pillar 3a and voluntary LPP affiliation become central. See pillar 3a for the self-employed.
- Cross-border workers: two tax systems to coordinate and withdrawal taxation to anticipate. See cross-border retirement planning.
- Couples: both spouses' lump-sum withdrawals in the same year are added together; cross-staggering is essential.
Frequently asked questions
When should you start preparing for retirement?
Ideally from age 50. That is the time to review your three pillars, spot any gaps and still have enough time to close them through buy-ins or pillar 3a. Even 5 years before retirement, useful levers remain.
How much do you need to live on in retirement in Switzerland?
The Swiss system aims for AHV and LPP together to cover about 60% of your last salary. To maintain your standard of living, 70 to 80% is often the target, with the gap filled by pillar 3a, savings and investments.
When should you file your AHV pension claim?
The AHV pension is not paid automatically. File your claim with your compensation office 3 to 6 months before reference age.
How can you reduce tax on pension withdrawals?
By staggering withdrawals of your assets (2nd pillar lump sum, vested benefits, pillar 3a accounts) over several tax years. As the capital withdrawal tax is progressive, several smaller withdrawals are taxed less than one large payment.
Pension or lump sum: which to choose for your 2nd pillar?
A pension provides a guaranteed income for life but largely ends on death and is taxed as income. A lump sum offers flexibility and inheritance, but must be managed and invested. The choice is irreversible and depends on your situation.
Review your retirement
Preparing for retirement involves irreversible decisions. In a first conversation, we assess your situation and see how a full pension analysis can optimise it. Free first meeting at our offices in Vernier (Geneva) or by video call.
Book an appointmentInvexa, a Geneva-based advisory firm for pensions, retirement and investments, a non-tied insurance intermediary registered with FINMA (F01537672) and an investment adviser affiliated with ARIF (LSFin). This article is for information only and does not constitute personalised advice.