Introduction: what you need to get right before you retire
If you plan to retire in Switzerland within the next 10 years, there are a few critical areas you must review before your salary stops: income sources, pension optimisation, investment structure, taxes and lifestyle planning. Missing just one of these can cost you flexibility, income or peace of mind later.
This article gives you a clear retirement preparation checklist tailored to people who live in Switzerland. You will learn how to assess whether you are financially ready, how to combine pension pillars with investments, how taxes change after retirement and how to avoid common mistakes many near-retirees make.
Step 1. Clarify what “retirement” actually means for you
Retirement is no longer a single event. For many people in Switzerland, it is a transition phase rather than a full stop.
Before running numbers, ask yourself:
- Do you want to stop working completely or work part-time?
- Will you stay in Switzerland long term or relocate later?
- What will your annual spending realistically look like?
- How important are flexibility and liquidity to you?
A person retiring at 58 with plans to travel extensively needs a very different structure from someone retiring at 65 and staying locally with a stable lifestyle. The clearer your vision, the easier it becomes to build the right financial setup.
Practical tip:
Write down your expected annual spending in today’s CHF, then add a buffer of 10–20% for uncertainty.
Step 2. Map all future income sources
Near-retirees often underestimate how fragmented retirement income can be. If you live in Switzerland, your income usually comes from multiple sources, not just one pension.
Create a simple overview of:
- AHV (1st pillar) expected benefits
- Occupational pension (2nd pillar)
- Pillar 3a assets
- Investment portfolios (total amount and annual income out of it)
- Rental income from real estate or other passive income
- Part-time work or consulting income
Seeing everything on one page helps identify gaps and overlaps.
Practical Tip:
A simple table showing the income sources, total asset value, and expected income from those assets, expected start date and understand how reliable those income resources are.
Step 3. Understand your AHV (1st pillar) options
The Swiss AHV provides a base level of income, but rarely covers full retirement needs.
Key points to review before retirement:
- Your full contribution record (check for gaps)
- The impact of early or deferred AHV withdrawal
- Coordination with a spouse’s AHV benefits
Deferring AHV can increase annual payments but only makes sense if you have sufficient income from other sources during the gap years.
A common mistake we see often is deciding on early AHV withdrawal without reviewing cash flow needs and tax consequences.
Step 4. Review your occupational pension (2nd pillar) strategy
For many near-retirees, the 2nd pillar is their largest single asset. Decisions made here are often irreversible.
Key questions to answer:
- Lump sum or annuity? There're pros and cons for both.
- What do you do with the income that you receive?
- How will withdrawals be taxed?
A lump sum offers flexibility and inheritance advantages, while an annuity provides predictable lifelong income. The right choice depends on health, family situation and risk tolerance.
Different cantons can tax lump-sum withdrawals differently. Timing and location matter too.
Step 5: Take full advantage of your 3rd pillar (Pillar 3a)
Your 3rd pillar is one of the most powerful and often underused retirement tools in Switzerland.
It combines tax savings today with long-term capital growth, making it especially valuable in the final years before retirement.
Key points to review:
Contributions to Pillar 3a are tax-deductible, which can significantly reduce your taxable income during your highest-earning years.
Many 3a accounts remain in low-yield cash by default. Depending on your time horizon, an investment-based 3a solution may better support long-term growth.
Pillar 3a assets are taxed separately at withdrawal. Holding multiple 3a accounts and withdrawing them over different years can reduce your overall tax burden.
Used intentionally, the 3rd pillar can act as a bridge between work and retirement, not just a tax-saving tool.
Step 6. Reassess insurance coverage
Insurance needs change significantly after retirement.
Checklist:
- Do you still need certain life insurance policies?
- Is supplementary health insurance still cost-effective?
- Have you reviewed long-term care considerations?
- Are you over-insured or under-insured?
Reducing unnecessary premiums can free up cash flow for other priorities.
Step 7: Build your investment strategy (if you don’t have one yet)
Many people come to me and ask the same question:
“Charlene, I’m in my 40s.”
“I’m in my 50s.”
“Even in my 60s.”
“Is it too late for me to build an investment portfolio?”
My answer is always the same. Yes, starting early helps. Of course it does.
But starting now is always better than not starting at all.
What is risky is following a strategy that was never designed for your life. A 25-year-old just starting their career, a 35-year-old saving for a property, and someone approaching retirement should not be investing in the same way.
If you don’t yet have an investment portfolio, this step is about building your own strategy, not copying someone else’s.
Key things to consider when building investment strategy
Your age matters less than your objectives. Whether you’re investing for income, capital preservation, or long-term growth, your strategy should reflect your personal timeline and priorities.
Risk is not about chasing returns. It’s about understanding how much volatility you can realistically accept without losing sleep or making emotional decisions.
A clear strategy helps you stay invested through market ups and downs, instead of reacting to headlines or comparing yourself to others.
It is never too late to invest, but it’s always a mistake to invest without a strategy. The right approach is the one that fits your goals, your time horizon and your comfort with risk.
Step 8: Review your investment strategy (if you’re already invested)
If you already have investments, this step is about adjusting, not restarting.
As you move closer to retirement, your strategy should naturally evolve. What worked well during your accumulation years may no longer be optimal when your focus shifts toward stability, income and capital preservation.
A regular review helps ensure your portfolio still supports your current life stage.
Key things to review
Many investors gradually move from a purely growth-oriented approach toward a more balanced or slightly value-oriented strategy, with increased focus on income and resilience.
Some asset classes may need to play a smaller role, while others become more important as retirement approaches.
Your portfolio should support not only your own financial security, but also the legacy you want to leave behind, whether that’s supporting family, future generations, or long-term causes you care about.
Common red flags to watch for
- Your portfolio no longer matches your goals
If you can’t clearly explain what each investment is for, it’s a sign the strategy needs review. - Too much concentration in one area
Heavy exposure to a single market, currency, or asset class can create unnecessary risk. - A portfolio built on past trends, not today’s reality
Strategies designed for a different life stage may quietly increase risk as retirement nears.
Reviewing and rebalancing your investments regularly allows you to stay aligned with your goals, while remaining flexible as life evolves.
9. Plan your tax strategy for retirement
Taxes do not stop when you retire. Instead, they simply change. One of the mistakes near-retirees make is focusing on how much they have saved, without planning how and when they will withdraw it.
Key areas to review before retirement:
- Coordinate withdrawal timing across income sources
Pensions, investment income and pillar withdrawals can stack up and push you into higher tax brackets if taken in the same year. Spreading withdrawals over time can significantly reduce taxes. - Understand how your tax profile changes after work income stops
Without a salary, deductions change, but so do taxable income sources. This often creates opportunities, if planned in advance. - Consider canton-specific tax differences
Taxation on pension lump sums and investment income varies by canton. For some people, timing or location of retirement can materially affect net income.
10. Stress-test your retirement plan
Before retiring, ask “what if” questions:
- What if markets drop early in retirement?
- What if you live longer than expected?
- What if healthcare costs rise?
- What if a partner passes away earlier?
Stress-testing highlights vulnerabilities and gives you time to adjust while still employed.
Preparing for retirement in Switzerland is not about predicting markets perfectly or having everything figured out decades in advance. It is about building structure, clarity and flexibility around the life you want to live next. When pensions, investments, taxes and lifestyle decisions are viewed together, the risk of unpleasant surprises drops significantly.
And it’s important to say this clearly: it is not too late to start investing. I regularly meet people in their 50s and even 60s who successfully build a solid, well-structured investment strategy. The key is not age, but having a personalised approach that reflects your goals, timelines and risk tolerance, not someone else’s strategy from a different life stage.
The earlier you start preparing, the more options you preserve. But even later preparation is far better than none. Retirement planning is most powerful when it is intentional and proactive, giving you confidence and choice as you move into the next chapter of life.
The content in this article is provided for educational purposes only. It does not constitute investment advice, financial recommendations, or promotional material.
