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Imagine this: It's the year 2055 and you're sitting on your terrace overlooking the lake, enjoying your morning coffee and thinking about whether to go hiking today or meet up with friends for lunch. No financial worries cloud your thoughts, because you made the right decisions 30 years ago.
The Swiss 3-pillar principle has enabled you to enjoy your standard of living in retirement. But how does this Pension system actually? And why is it so important that you deal with it today - regardless of whether you are 25, 35 or 45 years old?
In this article we take the 3-pillar system in Switzerland and show you how you can use simple but effective strategies to optimise your Pension gap and secure your financial future.
The Swiss pension system is one of the best in the world - and not without reason. With its 3-pillar principle it offers a clever combination of state protection, occupational pension provision and private initiative.
What makes the system so special?
But don't worry - we won't disappear into the theoretical financial jungle. Instead, we'll use concrete examples to show you what the individual Columns for your real life.
The First pillar is like the foundation of a house - nothing works without it. It should be your Basic needs in old ageand consists of various social insurance schemes.
Practical example: Laura, 32, a graphic designer with an annual income of CHF 78,000, pays around CHF 4,680 a year into the AHV to the pension fund. Her employer contributes the same amount. At retirement age, she can expect a monthly AHV pension of around CHF 2,200 - which is only about 34% of their last income corresponds.
Important to know: The 1st pillar provides a safety net, but is not enough on its own for a comfortable retirement.
"Intelligent people learn from the mistakes of others".
We have compiled our top selection for you from all our tests and experience reports:
The second pillar is like the walls of your retirement home - it provides structure and stability. In the form of the occupational pension scheme (BVG) resp. Pension Fund it supplements the AHV and together with it should cover around 60% of your last salary.
What makes the 2nd pillar special?
Practical example: Marco, 45, project manager with an annual income of CHF 110,000, already has CHF 280,000 in his Pension Fund saved. If he continues to pay in the same amount and earns an average return, he will have around CHF 480,000 at retirement age. Together with the AHV, this will give him a pension benefit of around 50% of his last salary.
Important: The Occupational pension scheme (BVG) is mandatory for employees with an annual income above the BVG minimum salary. Self-employed and Part-time employees below this limit must take out voluntary insurance - or fall through the cracks!
The third pillar is like the roof of your retirement home - it protects you from the rigours of old age and enhances your financial home. It is voluntary, but offers tangible benefits:
Practical example: Sophie, 28, software developer, pays the maximum amount annually into her Pillar 3a at Finpension one. She chooses a strategy with an 80% equity component. Assuming an average return of 5%, she will have CHF 700,000 at retirement age - tax-privileged and in addition to her AHV and pension fund.
Pro Tip: The opening of several 3a accounts you can take a phased withdrawal at a later date and save considerable tax. Find out more in our Pillar 3a comparison.
Now it's getting exciting: despite the 1st and 2nd pillars, most people still have a considerable gap between their final income and their pension. This Pension gap can dramatically affect your quality of life in old age.
This is how your personal pension gap is calculated:
Sample invoice: With an annual income of CHF 100,000:
The higher your income, the larger this gap becomes. With an annual income of CHF 150,000, it can quickly amount to 50% or more.
The good news: With the right strategy in the 3rd pillar you can reduce or even close this gap!
Depending on your age, income and personal goals, there are different ways in which you can improve your pension provision. But be careful: not every payment makes sense at every stage of life. Here you will find an overview of the most important tips - and the most common pitfalls.
Start pillar 3a earlyTake advantage of the compound interest effect and make regular payments into your pillar 3a - ideally into a solution with a high equity component (up to 99 % possible).
👉 Pillar 3a comparisonFind the best providers with top return opportunities.
Check pension fund benefitsWhen changing employer, it is worth taking a look at the pension fund benefits. Not every pension fund is equally good.
Build pillar 3b with ETFsWith an ETF savings plan, you can also build up long-term assets - independently of state-regulated pension schemes.
👉 Online broker comparison Switzerland: You can find the best brokers for ETF savings plans here.
Build up pillar 3a in stages: Pay attention to this during assembly, several 3a accounts with different providers or within one provider. This is the only way you can staggered withdrawals and tax savings.
👉 More on this in the Contribution to pillar 3a withdrawal
Payments into the pension fund onlyPre-purchases into the pension fund should generally be only a few years before retirement and only after careful analysis. Pay attention to the Blocking period of 3 yearsespecially if you are planning a lump-sum withdrawal.
Be aware of risksOnce you have paid capital into the pension fund, it is tied up and difficult to access again. This can limit your flexibility, e.g. if you change jobs or move abroad.
Targeted PK pre-purchasesPre-purchases can now be very attractive from a tax perspective - and help to close pension gaps. It is important to bear in mind the vesting periods and the planned capital withdrawal.
Clever use of 3a accountsWho can use pillar 3a built up at an early stage can now also receive these on a staggered basis and thus avoid high tax charges.
Plan purchaseDecide early on whether you want capital or a pension - this also influences when and how you should optimise.
Voluntary pension fund or foundationSelf-employed persons can voluntarily join a pension fund or save for old age through a pension foundation.
Utilise maximum contribution in 3a: As a self-employed person you may up to 20 % of net incomepay a maximum of CHF 35,280 (as at 2025) into pillar 3a.
👉 Find the right provider in the Pillar 3a comparison find.
Self-employed people have more flexibility3a assets can be used for emigration, self-employment or the purchase of residential property (WEF). prepaid become. This creates additional options - but also obligations.
The Swiss 3-pillar system offers you a solid framework for your retirement provision - but it's up to you to make the most of this framework. The most important insights:
Your concrete next steps:
Bonus tip: At FinanceTimetable we approach your pension provision and investments with strategy together!