Retirement income. Financially independent thanks to regular payments.

Your retirement income comprises several components of our social insurance system. It is an interplay of three pillars: state pension provision (OASI/DI), occupational pension provision and private pension provision.

In principle, you receive retirement benefits in the form of an OASI pension from the first pillar (OASI).

If you have paid into the second pillar, i.e. into your employer's pension fund, you will also receive a pension – unless you withdraw your pension assets as a lump sum.

If you have made private provision in the third pillar, you can use it to supplement your OASI and pension fund pensions individually.

The key factor determining your OASI pension is the extent to which you have paid in your contributions without any gaps (eligible contribution years). The eligible average annual income is also important. OASI shortfalls usually arise through missing contribution years. You can also find further information in our guide to the 1st pillar.

With the pension fund, the amount of your old-age pension depends on whether you were always a member of a pension fund during your professional activity. Career breaks can result in gaps here as well. You can see your expected retirement benefits on the insurance certificate provided by your pension fund. The decisive element is always your pension fund’s regulations. You can also find further information in our guide to the 2nd pillar.

Only for OASI is there a fixed limit for the maximum retirement pension. It is difficult to calculate your OASI pension yourself. There are too many factors to take into account: the actual number of years of contributions, all the changes in your salary, changes in your marital status, children, etc. That is why your relevant OASI compensation office calculates your definitive OASI shortly before you retire.

However, it makes sense to request a statement of your individual account from your OASI compensation office every four to five years, especially if you change jobs frequently. The statement allows you to check the OASI contributions paid and to pinpoint, and compensate for, any missing years of contributions.

You can see your expected retirement pension on the insurance certificate which you receive each year from your pension fund. It also includes the amount available for a voluntary purchase. In this way you can improve the retirement benefits you will receive from your pension fund.

It is best to answer this question in the context of your future provisions or pension planning. Our advisors will be pleased to assist you. Basically this is about determining the income sources available to you after retirement. These are usually OASI plus your pension fund and any private assets.

As a rule, you will stop receiving a considerable part of your income once you retire. With the benefits from OASI and your pension fund you will at best achieve around 60% of your previous income.

Now is a good time to consider the monthly budget that will cover your needs after retirement. Factor in a buffer to create some financial leeway. You can use the 3rd pillar to build up the difference between your budgeted expenses and any available retirement income.

You must submit an application for an OASI pension to the relevant OASI compensation fund office around three to four months before you retire. The compensation fund office then calculates the definitive pension amount, so that the first pension payment can be made on time.

The relevant regulations determine the retirement pension you receive from your pension fund. As a rule, the pension is paid out as of the time you retire. Contact your pension fund in good time. This will simplify the planning.

If you have taken out private retirement pension insurance, the pension will be paid out in line with your policy.

Your retirement income is basically taxed in the same way as your previous income. However, there are some differences.

The OASI and pension fund pensions must be taxed as income. If you withdraw the pension assets as a lump sum instead of as a pension this must be taxed once at a separate, reduced rate.

Only 40% of a private pillar 3b retirement pension is taxed as income. If you accumulate a retirement pension in pillar 3a over the long term, you can deduct the annual contributions from your taxable income and thus save on taxes each year. However, the pensions are taxable as income.

With a private retirement pension you are covered by an insurance solution. During the savings phase you can protect the savings process with a waiver of premiums. During the pension withdrawal phase, the amount of the pension payments is guaranteed, and the pension payments are made in this amount, usually for the rest of your life. This affords you long-term planning security for your retirement income. If you wish, you can also get insurance coverage for your partner.

With a payment plan you waive any insurance coverage. Instead, you participate in market trends with the money you have invested and can take advantage of profit opportunities. For your security and to improve planning, the amount of the minimum payments is guaranteed. However, additional income can increase these payments. You determine how long the payment phase should last.

You have to decide, based on your personal situation, which solution is best for you. A combination may make sense: a retirement pension for secure, life-long additional income and a payment plan for a temporary increase in income needs. This can be useful, for example, in the first phase after retirement. Or to bridge early retirement or a career break.

Private retirement pensions as an insurance solution are basically taxed as income. Only 40% of a pension paid out of a flexible pillar 3b pension scheme is taxed as income.

However, the payment plan is not an insurance solution. This means that no stamp duty is due with a one-off investment. The payouts are tax-free up to the amount of your total investment. On the other hand, the income generated is subject to tax.

With OASI, missing contribution years can be offset with a one-off payment. This is only possible for the past five years, however.

Your pension fund may allow voluntary purchases. If so, you can make one-off payments to supplement your benefit scheme assets, thereby improving the pension you receive from your pension fund in the future.

Your private third-pillar retirement pension can also be increased with additional one-off payments – even if you already draw a pension.