{"id":5443,"date":"2017-04-23T12:56:55","date_gmt":"2017-04-23T10:56:55","guid":{"rendered":"https:\/\/www.smolio.ch\/wissen\/how-much-money-does-a-pensioner-need-in-switzerland-having-enough-to-make-ends-meet-in-retirement\/"},"modified":"2022-04-10T13:34:27","modified_gmt":"2022-04-10T11:34:27","slug":"how-much-money-does-a-pensioner-need-in-switzerland-having-enough-to-make-ends-meet-in-retirement","status":"publish","type":"post","link":"https:\/\/www.smolio.ch\/en\/wissen\/how-much-money-does-a-pensioner-need-in-switzerland-having-enough-to-make-ends-meet-in-retirement\/","title":{"rendered":"How much money does a pensioner need in Switzerland: having enough to make ends meet in retirement"},"content":{"rendered":"Lesedauer<\/span> 5<\/span> Minuten<\/span><\/span>\n

How much money a pensioner needs in Switzerland varies from person to person. What you can assume, however, is that as a retired person you will have much less than today without your own precautionary measures. And around 40% less income that you have to get by with. How does this loss of income come about and how can you compensate for it?<\/span><\/p>\n\n\n\n\n\n\n\n

A replacement rate of 60% is the benefit target of the first and second pillars<\/h2>\n\n\n\n

The Swiss pension system consists of two mandatory and one voluntary pillar. The first pillar ( AHV<\/a> , old-age and survivors’ insurance) and the second pillar ( BVG<\/a> , law on occupational pensions) should ensure you an income of around 60% of your gross income after retirement – i.e. 40% less than you have now. However , this only applies under certain conditions<\/a> . Some of the most important are: you will retire “properly” (men at 65, women at 64) and since the age of 20 you have always paid in at least as much as the average of everyone else. Do you have? After all. Because according to <\/span>Federal Office for statistics<\/span><\/a> around 40 percent of the labor force retires before the normal retirement age \u2013 voluntarily or involuntarily. And bear the corresponding lifelong pension losses in the first and second pillars. <\/span><\/p>\n\n\n\n

How much money does a pensioner need in Switzerland? The third pillar brings it<\/h2>\n\n\n\n

If you do not act yourself, you will receive the state-regulated benefits (AHV, BVG) as retirement income after your retirement. That much and no more. So that this does not have to be the case, there is a third pillar<\/a> in Switzerland. It is intended to enable Mr. and Mrs. Swiss to reduce or close pension gaps. <\/span><\/p>\n\n\n\n

According to a<\/span> study<\/span><\/a> at the Zurich University of Applied Sciences, however, only around 60% of German-speaking Swiss take care of their third pillar. This is consistent with studies such as the representative one <\/span>Pension monitor from UBS<\/span><\/a>. As a result, only slightly more than half of the Swiss workforce has a pillar 3a account. Do you belong too?<\/span><\/p>\n\n\n\n

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This is what your income mix should look like in old age<\/h2>\n\n\n\n

Your retirement income should come from three pillars and additional free assets. Based on Swiss averages, your retirement income could look like this. The best thing to do is use your numbers in our free pension<\/a> calculator to work out what it looks like for you in 1 minute.
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\"How<\/figure>\n\n\n\n

How much money does a pensioner need: The basics of Swiss old-age provision<\/h2>\n\n\n\n

1st pillar: the pay-as-you-go compulsory insurance for everyone <\/h3>\n\n\n\n

Pay-as-you-go<\/strong> means that the contributions of some (employed payers) are immediately distributed to others (pensioners). The AHV keeps a so-called individual account for you at the various compensation offices. This collects information needed to calculate your future OASI pension. But it is not an asset account with real values. The AHV is a basic security that is intended to secure your livelihood and prevent poverty in old age<\/strong> .<\/p>\n\n\n\n

2nd pillar: funded insurance for employed people<\/h3>\n\n\n\n

Funded<\/strong> means that your contributions as a payer are credited to your individual account with your pension fund. You can compare this to a blocked account at a financial institution that you don’t access until you retire. The “financial institution” is usually your pension fund, which manages and increases your assets. These assets are yours and should allow you to cover your living expenses after retirement.<\/strong><\/p>\n\n\n\n

3rd pillar: voluntary and private provision <\/h3>\n\n\n\n

Voluntary<\/strong> means you can, or rather should, but you don’t have to put something aside privately. There is pillar 3a, where you can really save on taxes<\/a> , and pillar 3b<\/a> to build up additional assets. As with the second pillar, you have one or more individual accounts. Like the second pillar, these are funded \u2013 you pay into your account. In the case of pillar 3a, the money is generally blocked until you retire. This is called \u201cbound self-provision\u201d. Before that, there are precisely defined cases in which you can withdraw the tied 3a funds again: if you become self-employed, emigrate from Switzerland, need the funds for a property you use yourself or want to buy into your pension fund. In order to motivate you to save money, Pillar 3a is heavily tax-deductible. Your assets in the third pillar (tied pension provision pillar 3a and the so-called untied pension provision, i.e. your free assets in pillar 3b) should supplement the first and second pillars. This is how you reduce or close pension gaps from the first and second pillars.<\/strong><\/p>\n\n\n\n