If your pensions from the AHV and the pension fund are not enough to cover your living expenses in retirement, there are various ways to close this gap:
- Saving: one option is to analyse your own expenses and identify savings potential. Many towns and cantons as well as Pro Senectute offer free budget advice to support you.
- Working longer: if your personal situation allows it, later retirement can make sense. This increases your pension entitlements in old age.
- Drawing down assets: if you have saved assets in addition to the pension fund, you can use them to close the gap between expenses and income.
- Investing in pension provision: you can make voluntary additional contributions to the pension fund. This increases the funds available to you at retirement.
- State supplementary benefits: under certain conditions you are entitled to supplementary benefits and can thus receive financial support from the state after retirement.
If you want to use your privately saved assets to close a possible needs gap after retirement, a simple calculation lets you estimate how long your assets will suffice for this:
available assets at retirement / needs gap
The result shows you for how many years you can finance this gap from your assets.If the assets are no longer sufficient later on, supplementary benefits can be applied for under certain conditions. Among other things, you must be resident in Switzerland, draw an AHV or IV pension and not exceed the statutory asset limit, which currently stands at CHF 100’000 for single people.
Further information can be found in the leaflet on state supplementary benefits.
Within occupational pension provision, the question of the timing of retirement arises. As a rule: the longer you work, the higher your accumulated retirement assets. This also improves your pension entitlements at retirement.
The ordinary retirement age is 65. The statutory provisions do, however, allow retirement between the ages of 58 and 70. With every additional working year your retirement assets keep growing. Your lifelong PF pension can thus increase by around 5% to 7% per year.
Voluntary buy-ins into the pension fund are a further way to increase your retirement assets and thus your later pension entitlements. Like payments into pillar 3a, they can be deducted from and are therefore attractive for tax purposes. In addition, the amounts paid in earn interest until retirement and thus increase your retirement assets. Your buy-in potential is shown on your insurance certificate.
You may also be wondering whether a buy-in into the pension fund or a payment into pillar 3a is more advantageous for you. Compare in particular the interest paid by your pension fund with the expected returns of your 3a solution after deducting costs.
Note: if a person plans to use up part of their assets in retirement, it can make sense to examine whether a voluntary buy-in into the pension fund is an attractive alternative. Free assets can thus be converted into a higher lifelong retirement pension while reducing the tax burden at the same time.