What budget do you need to live in retirement in Switzerland?

The 80% rule and its limits

It is often assumed that you need about 80% of your last income to maintain your standard of living in retirement. The idea: some expenses fall (social contributions, savings, work-related costs), while others stay stable or rise.

This rule is only a starting point. Someone who has paid off their mortgage will need much less, whereas a couple who travel often or pay a high rent will aim closer to 90 to 100%.

The main spending categories

Housing: rent or ownership costs (mortgage interest, maintenance, condominium charges). This is almost always the heaviest item.

Health insurance: premiums do not drop in retirement and rise every year. Factor in the deductible and out-of-pocket costs too.

Day-to-day living: food, transport, telecoms, insurance, leisure and holidays. This category reflects your lifestyle directly.

Taxes: even in retirement, AVS and LPP pensions and capital withdrawals are taxable. Do not leave them out of the budget.

A sample monthly budget

For a retired homeowner couple in French-speaking Switzerland, a typical budget might look like this: housing CHF 1,500, health insurance CHF 700, food CHF 900, transport CHF 400, leisure and holidays CHF 800, taxes CHF 800, miscellaneous CHF 400, for around CHF 5,500 per month.

These figures vary widely by canton, owner-versus-renter status and habits. The useful exercise is to start from your current spending, then remove what disappears and add what appears.

Compare the budget with your retirement income

Once your budget is estimated, compare it with your expected income: AVS pension, 2nd-pillar pension or lump sum, 3rd pillar and other assets. Any shortfall is your pension gap.

If your guaranteed income does not cover your essential spending, you need to build more capital, adjust your lifestyle, or plan a gradual drawdown of your capital.

Anticipate how spending evolves

A retirement budget is not fixed. The early years are often the most active (travel, projects), then leisure spending falls while health and home-care costs may rise with age.

Accounting for inflation is essential: at 2% per year, the cost of living doubles in about 35 years. A budget that is comfortable today must stay so in twenty or thirty years.

Frequently asked questions

How much do you need to live in retirement in Switzerland?

It depends mainly on housing and lifestyle. A homeowner couple can live on roughly CHF 5,000 to 6,000 per month, but a city renter or a retiree who travels a lot will need more.

Is the 80%-of-last-income rule reliable?

It is a useful benchmark, not a certainty. It assumes some expenses fall in retirement. The right figure comes from your real budget, not a theoretical percentage.

Do you still pay taxes in retirement?

Yes. AVS and LPP pensions are taxed as income, and capital withdrawals are subject to a reduced one-off tax. Tax remains a budget item to plan for.

How do I know whether my income will cover my budget?

Add up your expected retirement income (AVS, 2nd and 3rd pillar) and compare it with your budget. RetirePlan calculates this comparison and quantifies any pension gap.