It's never too early to start thinking about your retirement provision. The latest Fairplay study by Zurich Switzerland and the Vita Collective Foundations shows: Around half of the retired persons surveyed regret their retirement provision decisions in hindsight.
The best time to start thinking about retirement is from the age of 50. This gives you enough time to rectify any pension shortfalls. It is worth reviewing your plan a few years before your desired date of retirement: When would you like to retire, and how do you envisage your retirement? Find out from the Swiss Federal Old-Age and Survivors' Insurance (AHV) organization and your pension fund about the options for pension and lump-sum withdrawals. What many people don’t know: The AHV pension is not paid out automatically. You must register with the AHV organization three to six months before retirement.
How much money do you need to live on? Originally, pensions from the 1st and 2nd pillars were intended to replace around 60 percent of the final salary. However, pensions from the AHV organization and pension fund are often no longer sufficient to maintain the accustomed standard of living after retirement – this affects high earners and part-time employees in particular. You can rectify such pension shortfalls with tax-privileged payments into pillar 3a or by buying into your pension fund, for example.
Get an overview of your finances – a budget is the basis of all successful financial planning. Make a list of your expected living costs: How much money do you need to cover your basic needs, such as housing, household bills, mobility or health? Also think about larger expenses, such as a long trip or investments in your own home.
The next step is to calculate the pensions you can expect from the 1st (AHV) and 2nd pillar (pension fund). To do this, order a statement of your individual account from the AHV organization or a pension forecast. On the pension certificate from your pension fund, you can see at a glance what pension you can currently expect and how much retirement savings capital you already have. Have you saved additional assets in the 3rd pillar? You can draw on these at the earliest five years before reaching the AHV reference age (currently 65).
Is the money from your AHV, your pension fund and the 3rd pillar sufficient to cover your expenses? If not, early planning will give you enough time to find solutions. If you are unable to finance your living expenses in retirement with your AHV and pension fund income and your savings, you may be entitled to supplementary benefits. Entitlement and the amount of the contributions depend on your personal and financial situation.
Would you like to get an initial overview of your retirement provision now? It's easy with the Vita pension calculator.
It makes sense to discuss your personal situation with an independent financial planner. Careful planning is particularly worthwhile for lump-sum withdrawals and buying into your pension fund – this way you can take advantage of tax benefits and take any blocking periods into account.
The decision between a pension fund annuity or a lump-sum withdrawal will have a significant impact on your retirement. Once the decision has been made, it can no longer be reversed. It is therefore essential that you obtain good information and advice. Both options have their pros and cons. Your personal life situation and health play an important role when making the decision.
You should also check how much lead time your pension fund requires for a lump-sum withdrawal and whether you can withdraw all of your capital. Good to know: After a purchase, there is often a three-year blocking period during which you may not withdraw any capital. It is best to clarify these points directly with your pension fund.
An AHV pension (1st pillar) can be drawn at the earliest at the age of 63. Depending on the regulations of your pension fund, a pension from your pension fund (2nd pillar) is possible from the age of 58. Please note that annuities will be reduced and the retirement savings capital you have saved in the pension fund will be significantly lower in the event of early withdrawal. An important point: You must continue to pay AHV contributions until the reference age of 65, even if you stop working earlier. You can withdraw your pillar 3a balance at the earliest at the age of 60.
Depending on the pension fund, you may be able to retire in several stages and thus gradually reduce your workload. Ask your pension fund what options are available. You should also seek advice on whether early or semi-retirement is financially feasible – the costs are often underestimated.
Would you like to work beyond normal retirement age? Both the AHV and pension fund pensions can be deferred – though you must draw them by the age of 70 at the latest. Deferral can make sense, as you pay tax on pension payments and your salary together as income. Partial withdrawal of an AHV or pension fund pension is also possible.
If you own your own house or apartment, affordability is recalculated at the time of retirement. As your pension income is usually lower than your last salary, it can be more difficult to prove the affordability of your property. In addition, your mortgage must not exceed two thirds of the market value of your property from this date. You may therefore have to pay off part of the mortgage. Seek advice on whether it makes sense to repay part or all of the mortgage. Only pay off an amount that means you still have sufficient reserves for unforeseen expenses.
If you know that you would like to live in your own home after retirement, plan major renovations while you are still working and before the abolition of the imputed rental value (the earliest this change is expected to take effect is in 2028) if possible. This allows you to make optimum use of the tax deduction.
It is time to deal with the topics of advance care directives, living wills, wills and inheritance contracts when planning your retirement strategy, if not before. This allows you to make independent decisions and relieve the burden on your relatives. If you leave no instructions, your assets will be distributed in accordance with the statutory order of succession after your death. A cohabiting partner receives nothing. It can also happen that your spouse may have to sell their home if children have to be paid off. Such situations can be avoided with a will, a marriage contract and/or an inheritance contract.
An advance care directive states who may make decisions for you in the event of your incapacity. Like a will, this document must be written by hand or notarized. It can make sense to draw up an advance care directive at any age, because even an unexpected accident can lead to you no longer being able to make decisions. An important point: The person you appoint must know where the original document is kept so that it can be submitted to the child and adult protection authority (KESB) in an emergency. With a living will, you specify which medical treatments you want if you can no longer decide for yourself.
Find out about these topics in good time and seek advice from a specialist.
Handing over your own company into new hands is an emotional and complex undertaking. Many entrepreneurs have invested a large part of their assets in their company. If no additional private assets are available, the only option in order to ensure the standard of living to which you are accustomed in retirement is often to sell. But a handover within the family also needs to be well planned. Think early on about what you want to do with your company after you retire – and whether you might even want to continue working beyond the reference age.
Retirement marks a new stage in your life. Whereas your everyday life was previously dominated by work, you will have more free time in future. Ask yourself at an early stage:
Talk to your employer in good time about your planned date of retirement – especially if you want to retire before the official reference age or work beyond it. Clarify whether and when you need to terminate your employment contract. Also think about your last day at work: How do you wish to say farewell to your professional life and your colleagues? Not everyone finds it easy to let go – so it's important to find a good ending. With the end of gainful employment, the familiar daily structure also disappears. Take time to find your own rhythm and a new daily routine in retirement.
Now you finally have room for everything that used to have little or no space alongside your work. Whether you're dreaming of a long trip, finally getting a good night's sleep, spending time with friends and family, discovering a new hobby or getting involved in voluntary work, think about what you enjoy doing: Write a personal wish list for your retirement. Some people take a break after their last day at work – and allow themselves time to adjust to the new situation. Others fulfill big dreams and start their retirement with a trip around the world. Find out what's right for you. But don't put off fulfilling your life's dreams for too long. Life sometimes turns out differently than you imagined.
Who am I when my professional identity disappears? What tasks do I perform, and how can I continue to feel useful? You should ask yourself these questions at an early stage. For many people, their job is a source of appreciation, meaning and affirmation. It is quite natural that saying farewell to everyday working life can also trigger uncertainty and emptiness. Use this phase as an opportunity to reorientate yourself and find a new purpose in life. Consider: What skills and interests would you like to develop further? What childhood dreams are still unfulfilled? Studies show: People who give their lives meaning live happier and often longer lives. Now you have the opportunity to shape your life in a conscious and fulfilling way.
A lot changes when you retire – including with respect to your partner. Suddenly you are spending more time together, and familiar routines are changing. Talk early on about how you would like to organize your everyday life as a couple: Who will take on which household tasks? How much time would you like to spend together? How much space do you need for yourself? What wishes and plans do you have for the new phase of your life?
Your social environment also often changes in retirement. There is no more interaction at work. Think actively about social contact before you retire, and cultivate your relationships with family, relatives, friends and neighbors. Loneliness is common among older people – especially if their long-term partner is no longer around or their children have their own lives. This makes it all the more important to cultivate friendships. Or discover a new hobby that connects you with like-minded people.
