How large is the typical pension gap in Switzerland?

As a rule of thumb, the replacement ratio from OASI and mandatory pension fund is around 60% of the last salary up to CHF 90,720. For higher incomes, it drops to 40-50%. The gap to the desired living standard (usually 70-80% of the last salary) typically amounts to 10-30% or CHF 10,000-40,000 per year.

Does the calculator compute the pension gap for married couples?

Yes. For married couples, the OASI cap is taken into account: the sum of both OASI pensions may not exceed 150% of the maximum pension (CHF 3,780/month) (Art. 35 AHVG). The pension fund and Pillar 3a calculations refer to one person -- for complete planning, both partners should calculate their gap separately.

When is the best time for a pension fund purchase?

Pension fund purchases are most effective 3-10 years before retirement, when the marginal tax rate is high and the investment horizon is still long enough. Note the 3-year waiting period for capital withdrawals after a purchase (Art. 79b para. 3 BVG). Shortly before retirement, a purchase is particularly worthwhile when an annuity is planned.

Pillar 3a or free savings: which is better?

Pillar 3a offers an immediate tax deduction (Art. 33 para. 1 lit. e DBG) and tax-privileged payout. However, the capital is locked until 5 years before retirement. Free savings (Pillar 3b) is flexible, and private capital gains are tax-free. At a high marginal tax rate, 3a is almost always worthwhile; beyond that, free savings makes sense.

Does the calculator account for inflation?

No, the calculation is nominal (without inflation adjustment). At 1% inflation over 20 years, money loses around 18% of its purchasing power. OASI pensions are periodically adjusted to wage/price developments (mixed index), but pension fund annuities generally are not. For conservative planning, you should choose a higher income target (e.g. 85% instead of 80%).

Calculate Pension Gap

How large is your pension gap? OASI + pension fund + Pillar 3a vs. your income needs.

The pension gap is the difference between the desired income in retirement and the actual benefits from OASI, pension fund, and Pillar 3a. According to the Federal Social Insurance Office, OASI and mandatory occupational pension together cover around 60% of the last income -- significantly less for higher salaries. Knowing this gap early is the first step towards financial security in old age.

Three-pillar system: how much comes together?

The first pillar (OASI) pays a maximum of CHF 2,520/month for single persons or CHF 3,780/month for married couples (Art. 34 AHVG). This only covers basic needs. The second pillar (pension fund) depends on the accumulated retirement capital and the conversion rate. The BVG minimum conversion rate is 6.8% (Art. 14 BVG). With CHF 500,000 in capital, this yields CHF 34,000/year. The third pillar (Pillar 3a) is voluntary. The maximum contribution for 2026 is CHF 7,258 for employees with a pension fund (Art. 7 BVV 3). The capital is taxed as income upon withdrawal but can be spread over 20+ years.

Why OASI alone is not enough

The often-cited rule of thumb that OASI and pension fund together replace 60% of the last salary only applies for incomes up to approx. CHF 90,720 (upper OASI scale). Those who earn more still receive only the maximum pension. With an income of CHF 150,000, the maximum OASI pension covers only around 20%. Occupational pension age credits are also based on the coordinated salary, which is capped (CHF 64,260 above the coordination deduction of CHF 26,460). Non-mandatory benefits vary widely and are often converted to annuities at a lower conversion rate.

Strategies to close the pension gap

Pension fund purchase (Art. 79b BVG): Voluntary contributions to the pension fund are deductible from taxable income. One of the most effective measures at a high marginal tax rate. Pillar 3a staggering: Withdrawing multiple 3a accounts over different tax years significantly reduces the tax progression upon payout. Voluntary savings: The gap can be closed through Pillar 3b (free savings) or ETF investments. Private capital gains are tax-free in Switzerland (Art. 16 para. 3 DBG). Working beyond 65: OASI deferral brings a 5.2-31.5% surcharge (1-5 years), and you continue saving in the pension fund.

Early retirement and its costs

Those who stop working before 65 pay a triple price: 1. OASI reduction: 6.8% per year of early drawdown, for life (Art. 40 AHVG). With 2 years early drawdown, the pension drops by 13.6%. 2. Missing occupational pension years: The last working years bring the highest age credits (18% from 55, Art. 16 BVG). Each missing year counts double. 3. OASI contributions as non-employed: Until 65, OASI contributions based on wealth must be paid (Art. 10 AHVG). Rule of thumb: each year of early retirement costs 5-8% of retirement income.

Frequently Asked Questions

How large is the typical pension gap in Switzerland?+
Does the calculator compute the pension gap for married couples?+
When is the best time for a pension fund purchase?+
Pillar 3a or free savings: which is better?+
Does the calculator account for inflation?+

Three-pillar system: how much comes together?

Why OASI alone is not enough

Strategies to close the pension gap

Early retirement and its costs