Planning Your Retirement in Switzerland

When people retire there are often a lot of questions asked and a lot of planning that goes into the proper retirement. This can be a stressful time for most, however it doesn’t need to be if you understand the basics. Below are the 3 pillars of retirement for Swiss residents. When you retire is Switzerland you receive an AHV pension, your occupational pension, and your private pension (if you contributed to one).

1st Pillar: Calculating your AHV pension

The amount of your AHV pension completely depends on the number of years you contributed, on your income and on any credits for child-rearing and care. For one to receive a full pension, they must contribute to the pension continuously from age 21 and up until the statutory retirement age. In Switzerland that age is 65 for men and 64 for women.

The combined income of both spouses made up over the years of their marriage is equally divided and allocated to each spouse when:

• Both spouses are entitled to an AHV or IV pension
• A widow or widower is entitled to a retirement pension
• The marriage is dissolved by divorce

The sum of the individual annuities of a couple may not be greater than 150% of the maximum pension. If this limit is exceeded, the individual annuities are reduced to fit.

2nd Pillar: Calculating the amount of your occupational pension

Occupational benefits are always calculated on the basis of the contributions you have accumulated from the time you began working. The regulations of your pension fund are used to calculate the statutory benefits you are allowed to receive. The total amount (‘retirement savings’) depends on your salary and also on the terms & conditions of the pension schemes you paid your contributions.

The pension you receive (conversion rate) is a percentage of your retirement savings, which is is defined by law. In 2013, the minimum conversion rate for the mandatory BVG savings is set at 6.9% for males (65) and 6.85% for females (64). In 2014 however it will be equally set at 6.8% for both men and women.

3rd Pillar: People With a Private Pension

If you have decided to join a private pension, you will receive additional capital for your retirement. Contact your advisor for the total amount of money saved and retained, and also ask for the terms of withdrawal.