Living to 100, stress-free. Does it add up?
Living to 100, stress-free. Does it add up?
We are living longer and staying healthy for longer. The only question is how to finance these extra years. Our magazine on longevity and pensions provides the answers and shows you which pension decisions come up at each stage of life – with personal checklists to take away.
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Find out here which pension decisions lie ahead at your age.
Five life stages, five checklists
When saving for retirement really begins
First job, first salary, and the pension fund deducts contributions. It is tempting to assume that saving for retirement starts now. It is not that simple. Cover for death and disability kicks in early, but actual retirement saving only begins at 25 by law – and only if your salary from one employer exceeds CHF 22’680.
«Pensions aren’t an issue yet at 25.»
They are – now is exactly when saving pays off.
Retirement saving in the 2nd pillar legally starts at 25. Anyone who starts pillar 3a at the same time gains forty years of compound interest at work. Those years cannot be made up later.
francs in pillar 3a after 40 years, with annual contributions of CHF 5’000 earning 5% interest. Of this, CHF 200’000 are contributions; the rest is compound interest.
What compound interest does with your contributions
Contributions made at the end of each year, calculated up to age 65.
The return assumptions are hypothetical and not a forecast.
Building up your 3rd pillar
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Pensions are a team effort
Cutting your working hours, buying a home, starting a family or even your own business? These are life decisions with far-reaching consequences for your pension.
«Getting married sorts out your pension automatically.»
Only partly.
Marriage settles a lot, but not the pension gap. Anyone who reduces their working hours for the family loses contribution years – and every lost year also means a year less of compound interest. This can be offset in a targeted way, for example by making contributions from the joint budget in favour of the partner who is working less.
That is how much the insured salary drops when working hours are cut to 60% on a gross salary of CHF 60’000. The reason is the fixed coordination deduction, which weighs disproportionately on part-time work.
«I’ll finance my home with my pension fund money too.»
Possible, but costly.
It is possible, but it costs more than it seems. CHF 100’000 in the pension fund grows to around CHF 243’000 by retirement at 3% interest. An advance withdrawal forfeits this effect and blocks voluntary buy-ins until it has been repaid. Pledging is often the better solution.
Your checklist
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In the driving seat
High earners have more options – including when it comes to pensions. From an annual salary of CHF 136’080, a 1e solution with a free choice of investment strategy becomes an option. By staggering buy-ins to your pension fund year by year, you can also save tax right now.
«I earn well, so I don’t need to think about my pension.»
Especially not then.
Above CHF 136’080 in particular, your pension becomes room for manoeuvre: your own investment strategy, staggered buy-ins, planned withdrawals. This room goes unused precisely when it is taken for granted.
francs less tax: anyone who buys in CHF 150’000 staggered over three years pays CHF 48’000 instead of CHF 62’000 in this example. City of Zurich, single, without church tax.
«Buying into the pension fund only pays off shortly before retirement.»
Rather the opposite.
The opposite: anyone who buys in early and spreads it over several years saves more tax than with a single large payment. Note the three-year lock-in period for lump-sum withdrawals after a buy-in. Planning the last buy-in in good time makes it easy to comply.
Your checklist
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Capital or pension? The mix makes the difference
Now is when decisions are made that cannot be undone: pension, capital or a combination of both. And for anyone leaving earlier – a sabbatical, resignation, returning from abroad – the question of vested benefits arises.
«I’ll decide shortly before retirement how I want to draw my pension assets.»
By then it’s too late.
The lump-sum option must be notified to the pension fund at least one year before withdrawal; some regulations require three years’ notice. Anyone who only decides shortly beforehand has, in effect, already lost the choice.
That is how long cover for disability and death continues after leaving the pension fund. After that, it is advisable to take out private cover.
«Without a job, there’s nothing I can do for my pension.»
On the contrary.
On the contrary: when you leave, it is decided whether your assets end up with the substitute occupational benefit institution at a low rate of interest or in a solution of your choosing. Splitting them across two vested benefits accounts gives you flexibility at withdrawal and saves tax. Later on, splitting is no longer possible.
Your checklist
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Will the capital last a lifetime?
For those who keep working, the tax burden often comes as a nasty surprise. To cushion it, PensExpert has developed the «Stop & Go» pension.
«Contributions to pillar 3a are no longer possible if you keep working after 65.»
They are.
As long as you are gainfully employed, pillar 3a remains open. Rejoining the pension fund is also possible, and the additional savings contributions remain tax-deductible.
years is the life expectancy at 65 today. When the AHV/AVS was introduced in 1948, it was 13 years on average.
Rejoining the pension fund
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The pension checklist for every stage of life
All the lists in one document, to print or pass on.
Download complete documentOne PDF, freely available, no registration required.
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Tipson how you
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life. Living to 100, stress-free.
Does it add up?
Pensions, the way life brings them
From your first payslip to waking up without an alarm clock. With the most common misconceptions, stories of people who faced the same decisions, and the checklists you have just worked through.
Available in German, French and English.
Pension issues on the political agenda
What happens in Bern helps determine how you can plan for retirement. We follow political and regulatory developments continuously and keep the timeline up to date.
Retroactive pillar 3a buy-ins possible for the first time
Federal Council sends the «AHV 2030» reform for consultation
13th AHV/AVS pension paid out for the first time
New order of beneficiaries in pillar 3a
Uniform reference age of 65 for women and men
Withdrawal of vested benefits aligned with pillar 3a
Any questions? We take the time to answer them.
Which decisions really matter in your situation only becomes clear in an individual pension plan. Book an appointment with a member of our advisory team.
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