Early Retirement at a Glance
- OASI (1st pillar): Early withdrawal of the pension is possible from age 63 (2 years before the reference age).
- AVS pension reduction: The annuity is reduced to between 6.8% (1 year) and 13.6% (2 years)
- Pension fund (2nd pillar): Possible early retirement from age 58 in most pension funds
- Contributions: In the event of early retirement, contributions to the OASI and BVG are maintained
- Fill in the gaps: There are many options available, primarily through Pillar 3a and BVG buybacks
In Switzerland, it's possible to retire before the ordinary retirement age (65 for men, 64 for women until the AVS 21/OASI 21 reform is fully in effect). However, leaving the workforce earlier also means giving up several years of income, with notable consequences for the amount of your AVS/OASI pension, your LPP benefits, and your personal finances.
A successful early retirement cannot be improvised. It requires thorough planning in terms of both occupational and personal retirement savings, a detailed analysis of future needs, and appropriate tax strategies.
Harmonization of the Retirement Age
The AVS 21/OASI 21 reform sets the reference age at 65 for everyone. For women of the transitional generation (born between 1961 and 1969) who don't opt for early retirement, a lifelong pension supplement is provided.
What Is Early Retirement in Switzerland?
Early retirement refers to the option of stopping your professional activity before the reference age set by law for AVS/OASI and occupational pension provision. In Switzerland, the three pillars of the retirement system each have their own conditions:
- AVS (1st pillar): Early retirement is possible starting at age 63 (men) or 62 (women), with a reduction in the pension ranging from 6.8 % to 13.6 % per year of early retirement.
- Occupational pension (2nd pillar):Most pension fund regulations allow for early withdrawal from age 58, with a pension reduced according to age and the technical parameters of the fund.
- Tied Pension Plan (Pillar 3a): Assets in a tied individual pension plan can be withdrawn starting 5 years before the standard AHV retirement age, which is currently 60
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Early Retirement: Is It a Good Idea?
The prospect of early retirement is the stuff of dreams: more free time, a better quality of life, and the chance to travel or pursue personal projects.
Financially, retiring earlier means living longer without income from work. By bringing your departure forward, you'll receive a permanently reduced AVS/OASI pension, and your occupational pension (2nd pillar) benefits will also be lower. You'll also need to cover several years without a salary, all while covering living costs that are sometimes higher than expected (healthcare, leisure, unforeseen expenses).
Despite these challenges, retiring early can still be an excellent choice, provided it's well thought out and carefully planned. By anticipating the impacts, building up sufficient reserves, and optimizing your retirement provision and tax situation, it's entirely possible to make the most of this new phase of life.
What Will My Early Retirement Pension Amount To?
1st pillar (AVS)
You can calculate your own AVS/OASI old-age pension based on your average annual determining income and scale 44, reduced by the percentage corresponding to your early retirement:
- For a departure 1 year before the legal age, the pension is reduced by 6.8 %.
- For a departure 2 years before, the reduction can reach nearly 13.6 %.
The compensation fund allows the AVS/OASI pension to be brought forward by between 1 month and a maximum of 2 years. This means the earliest possible retirement age is 62 for women born between 1961 and 1969, and 63 for everyone else.
| Duration of anticipation | Discount | Impact on the maximum pension (2,520) |
|---|---|---|
| 6 months | - 3.4 % | 2'434 (- 86) |
| 1 year | - 6.8 % | 2'349 (- 171) |
| 1 year and 6 months | - 10.2 % | 2'263 (- 257) |
| 2 years | - 13.6 % | 2'177 (- 343) |
If you are not sure of your calculation, ask for a simulation from the OASI. Conversely, a deferral of the pension is possible up to the age of 70. Once your OASI pension has been determined, you will need to reduce it according to the planned early withdrawal (maximum 2 years before the reference retirement age):
Example: A policyholder decides to take early retirement 2 years before the standard retirement age, with a determining average annual income of CHF 85,000.
He would normally receive an annuity of CHF 2,460 / month or CHF 29,520 / year.
Because of the anticipation, he wouldn't receive more than CHF 25,505 per year, or 2,125.44 per month, and this will remain the case for the rest of his life.
Occupational Pension (2nd Pillar)
In the 2nd pillar (LPP), early retirement is generally possible from age 58 if your pension fund's regulations allow it. If you choose to receive an annuity, the amount will depend on your accumulated capital, the applicable conversion rate, and your age at retirement. The lower your age, the lower the conversion rate. You'll find your estimated pension amount on your pension certificate.
You can also choose to withdraw the capital in full or in part. The LPP allows a lump-sum withdrawal of at least 1/4 of your assets (for the mandatory portion). If you withdraw capital, the amount will be subject to the tax on capital benefits (reduced rate). The choice between an annuity and a lump sum must be carefully evaluated before making a decision, as it's irreversible.
If you hold LPP assets in one or more vested benefits accounts or policies, they can be paid out at the earliest 5 years before, and at the latest 5 years after, retirement. The full capital must be withdrawn. To avoid excessive taxation upon withdrawal, it's recommended to open 2 separate accounts with two different vested benefits foundations (this choice can only be made when the account is opened).
- If you are unsure whether you have LPP assets in vested benefits accounts or with the LPP Supplementary Foundation, we recommend that you request a free search from the 2nd Pillar Central Office to identify and repatriate vested benefits.
Individual Retirement Savings (3rd Pillar)
If you've saved through a tied 3rd pillar (Pillar 3a), you can withdraw your assets up to 5 years before the legal retirement age — meaning from age 60 onward. Do keep in mind, though: just like a pension fund withdrawal, a Pillar 3a withdrawal is subject to capital tax at a preferential rate, and it also reduces your future reserves. In any case, comparing Pillar 3a providers will help you choose the right product for your goals. To avoid a high tax rate on capital benefits, open several Pillar 3a accounts and stagger your withdrawals over several years.
A Pillar 3b is also worth considering, keeping in mind that some cantons (Fribourg and Geneva) offer tax deductions on contributions, and that withdrawing the capital is tax-exempt (as long as the contract meets the genuine retirement-provision requirement). A life annuity is also an option depending on your situation, although income plans are often preferable for investing pension fund capital.
How Can I Optimize My Early Retirement?
When considering early retirement, it is rare for benefits from OASI and occupational pension plans to be fully sufficient to maintain one's standard of living. The gap between financial needs and expected pensions can be significant, especially as life expectancy increases. Fortunately, several strategies make it possible to anticipate and bridge this gap, provided one starts early enough.
1. Pension fund buy-ins
One option is to make voluntary buy-ins to your pension fund. By voluntarily increasing your LPP capital, you directly boost the future pension you'll receive. Buy-ins are all the more attractive because they're tax-deductible: every amount paid in reduces your taxable income and lets you achieve significant tax savings.
Of course, the redeemable amounts are capped and dependent gaps that you have accumulated over the course of your professional career. Ideally, these buybacks should be planned over several years in order to optimize their tax efficiency.
2. Contribute to a 3a pillar
The second approach is to make full use of the tied 3rd pillar, or Pillar 3a. This is a private retirement savings vehicle particularly well-suited to early retirement. Each year, you can contribute a set amount: in 2026, the ceiling is CHF 7,258 for people affiliated with a 2nd pillar. The amounts you contribute are directly deductible from your taxable income, making it a doubly effective way to save.
The earlier you start saving in a Pillar 3a, the more powerful the compounding effect becomes. As early retirement approaches, these funds can be withdrawn as a lump sum, giving you valuable financial flexibility to offset the reduction in your pensions.
3. Take out a 3b pillar
The Pillar 3b is more flexible than pillar 3a: it is not limited in terms of amounts contributed, and the funds remain available without age restrictions. However, it does not automatically offer federal tax advantages. Its taxation actually depends on how the product is structured and the canton of residence.
When a single-premium Pillar 3b contract is structured to meet the genuine retirement-provision requirement, the capital paid out at maturity is exempt from income tax. This makes it a highly attractive vehicle for anyone planning early retirement, since it allows you to build up capital that's tax-free at retirement.
If the Pillar 3b takes the form of a life annuity funded by a single premium, taxation works differently. Only a portion of the capital converted into an annuity is subject to tax, at a reduced rate. In 2026, that portion is 4% of the annual annuity amount, compared with 40% of the theoretical income under the old rules that applied until 2024. This change makes single-premium life annuities significantly more tax-attractive for future retirees.
Lastly, it's worth noting that in certain Swiss cantons — particularly Geneva and Fribourg — contributions to an insurance-based Pillar 3b are deductible from taxable income, up to a certain ceiling.
4. Investment in securities
For those wishing to build up an additional financial reserve with a view to early retirement, investing in securities represents an attractive solution.
From a tax perspective, capital gains realized on securities held in a private account are exempt from income tax in Switzerland. This means that if you sell your shares or funds at a profit, you won't pay tax on that gain, as long as you're considered a private investor rather than a professional trader. Your portfolio will, however, be subject to wealth tax, calculated on the net value of the securities held at year-end.
As such, investing in securities fits naturally into an overall financial plan, alongside traditional retirement provision solutions. It's important to start early enough, though, since investing in equities is beneficial — but only over a long-term horizon.
5. Buy-ins in pillar 3a (starting in 2026)
Starting in 2026 (for the 2025 tax year), it will be possible to retroactively buy back up to ten years of unpaid Pillar 3a contributions, up to CHF 7,258 per year, on top of the ordinary contribution.
Pour pouvoir effectuer ce rachat, il faut avoir perçu un revenu soumis à l’AVS durant l’année concernée et avoir déjà versé la cotisation maximale au moment du rachat. Les montants rachetés sont entièrement déductibles du revenu imposable.
6. Tax Planning
One of the biggest pitfalls of early retirement is the tax shock, particularly when simultaneously withdrawing assets from your pension fund (2nd pillar) and your tied pension plan (pillar 3a). In Switzerland, these capitals are taxed separately from ordinary income, but at a progressive rate.
To avoid paying too much in taxes, several tax-planning strategies are essential:
- Staggered withdrawals: Don't withdraw everything in the same year. By spacing out withdrawals from your 3a and vested benefits accounts over several years (ideally across different spouses or accounts held with separate pension foundations), you can avoid the progressive tax rate and save several thousand francs.
- The choice between a lump sum and an annuity: A lump-sum withdrawal is taxed immediately in a single payment, while an annuity is taxed annually as income. You should simulate the long-term tax impact based on your future tax rate.
- Intercantonal planning: If you are planning to move to another canton or municipality upon retirement (which is often more tax-advantageous), the timing of your capital withdrawal must be carefully coordinated with your change of official residence.
- The case of cross-border workers: Withdrawals of Swiss pension funds are subject to withholding tax in Switzerland, but their final tax treatment depends on the tax treaty between France and Switzerland. Coordinating the timing of your departure and your capital withdrawals can help you avoid double taxation or a disproportionate tax burden, depending on your place of residence at the time you liquidate your assets.
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Alternative: Partial Retirement
Retiring all at once often comes with pensions that fall short of maintaining your standard of living. Phased retirement offers a much gentler alternative: by gradually reducing your working hours, you keep contributing to your retirement savings, resulting in noticeably higher benefits once you fully stop working.
Pension funds allow this approach between the ages of 58 and 70, and the AVS now permits a payment spread out over three stages between the ages of 63 and 70. Spreading out capital withdrawals can also save several thousand francs in taxes. And since early 2024, contributions made after the reference age can even increase the old-age pension, up to the maximum limit.
Frequently Asked Questions
What happens to my AVS contributions if I stop working before reaching the official retirement age?
If you stop all gainful employment before reaching the standard retirement age, you are still required to pay AVS contributions as a non-working person. The minimum amount is approximately CHF 530 per year (in 2026), but it can be much higher depending on your net worth and your replacement income.
Contributions to the AVS, AI, and APG are calculated based on net worth, as well as annual income received in the form of a pension multiplied by 20.
I work in construction: When can I retire?
The FAR Foundation allows construction workers to retire starting at age 60, provided they can show 15 years of activity in the industry (including 7 continuous years). The transitional pension amounts to roughly 65% of base salary plus CHF 6,000/year, capped at 80%. The application must be submitted 6 months in advance, through the FAR Foundation or the Syna/Unia unions.
In Geneva, agreements (RAMB) apply to technical trades starting at age 61. For sheet metal work and plumbing, a new scheme is planned for 2027/2028, with possible retirement starting at age 60 and a full pension at 62.5.
Is it possible to take early retirement at age 60 in Switzerland?
Yes, in most pension funds (2nd pillar), it is possible to retire as early as age 58. Pillar 3a funds can also be withdrawn starting at age 60.
In contrast, the AVS (1st pillar) allows retirement only 2 years before the standard retirement age (63).
What are the conditions for early retirement?
- OASI (1st pillar): 63 years old at the earliest
- Pension fund (2nd pillar): 58 years old at the earliest
- 3rd pillar: 60 years old at the earliest
Can I take early retirement at 55 in Switzerland?
Nothing stops you from retiring at 55 in Switzerland — however, you won't receive anything from the pension system until you reach the minimum ages allowed for early retirement (from age 58).
Can I continue to contribute to the second pillar after leaving my job?
No, once you leave your job, you also stop making contributions to the 2nd pillar. Your accumulated funds are transferred to a vested benefits account or policy. They no longer accrue new retirement benefits but remain invested according to the terms of the chosen institution. Some vested benefits foundations allow you to optimize these funds until you reach normal retirement age.
If you're 58 or older and have been laid off, you can remain affiliated with your current pension fund. You'll continue to benefit from death and disability coverage, while continuing to make contributions.
What happens to my health insurance if I take early retirement?
Even in early retirement, health insurance remains mandatory in Switzerland. When you leave your employer, you lose your LAA (accident insurance) coverage and will need to take out accident insurance on your own. Be sure to carefully compare benefit levels as well as supplementary insurance options.
Can I withdraw my vested benefits to fund my early retirement?
Yes, starting at age 58. If you permanently stop working and don't take up salaried employment again, you can request the payout of your vested benefits before the ordinary retirement age. This withdrawal is subject to separate taxation at a reduced rate, calculated based on your canton of residence.
Once the funds have been withdrawn, you are solely responsible for managing your capital to cover your needs until you reach AVS retirement age.
What are the risks of a poorly planned early retirement?
The main risk is prematurely depleting your capital, particularly if your expenses are underestimated or expected returns don't materialize. Poorly anticipating fixed costs (health insurance, taxes, housing) or future needs (healthcare, unexpected family expenses) can undermine your financial independence. Careful planning, done several years in advance, is essential to limit these risks.
How do I know if I can afford to retire early?
To find out if early retirement is possible, you'll need to calculate a retirement assessment in order to analyze projected income, assets, and liabilities, as well as to identify all sources of income. A budget will also need to be drawn up to determine fixed and variable expenses, as well as the desired standard of living.
Having a personalized retirement plan drawn up by a wealth advisor is a modest investment to avoid costly mistakes.
Should I make additional contributions to my pension fund before taking early retirement?
When can I start planning my retirement?
The earlier, the better. At 25, even if retirement feels far off, the early years of your career are crucial for laying the foundations of your retirement provision — and these early years are ideal for benefiting from the cumulative effect of compound interest (particularly through pension funds).
From age 40 onward, you start to get better visibility on your professional, family, and wealth situation. This is the ideal time to carry out a first comprehensive pension review, identify any gaps, plan buy-ins to your pension fund, project a target retirement age, and structure your investments.
From age 50 onward, planning becomes more concrete. You can look into a precise estimate of your AVS/OASI and LPP pensions, a tax analysis in preparation for lump-sum withdrawals (LPP, Pillar 3a), decumulation strategies for your wealth, and simulate an early or deferred retirement.
Starting early helps spread out efforts, reduces financial pressure as retirement approaches, and keeps all options open (early retirement, gradual reduction, flexible retirement, optimized wealth transfer).