Calculating your retirement in Switzerland: how to estimate your income

The three sources of retirement income

The Swiss system rests on three complementary pillars. The 1st pillar (AVS/AHV) covers basic needs and is mandatory for everyone. The 2nd pillar (LPP) maintains your usual standard of living for employees. The 3rd pillar (3a/3b) is optional individual savings that bridge the gap.

Calculating your retirement therefore means estimating each of these three amounts, then checking that their sum covers your retirement budget. A common target is around 80% of your last income to keep your standard of living — but the right figure depends on your actual spending.

1st pillar: how the AVS pension is calculated

The AVS pension depends on two things: your number of contribution years and your average annual income across your whole career. A full pension assumes continuous contributions from age 21 to the reference age (about 44 years); each missing year reduces the pension by roughly 1/44.

For 2025, the maximum monthly AVS pension is about CHF 2,520 for a single person and capped at about CHF 3,780 for a married couple; the minimum is about CHF 1,260. The reference age is 65 (women's age is gradually rising to 65 under the AVS 21 reform). Check your contribution years with an AVS account statement to spot any gaps.

2nd pillar: LPP capital, pension and conversion rate

Your pension fund builds up capital throughout your career (your contributions, your employer's and interest). At retirement, this capital can be taken as a pension, as a lump sum, or as a combination of the two.

If you choose the pension, it is calculated by multiplying the accumulated capital by the conversion rate. The minimum legal conversion rate is 6.8% on the mandatory portion: capital of CHF 500,000 thus generates an annual pension of about CHF 34,000. The pension-versus-lump-sum choice is one of the most important financial decisions of retirement — see our dedicated guide.

3rd pillar: the savings that complete the calculation

Pillar 3a is voluntary, tax-advantaged retirement savings: contributions are deductible from taxable income. For 2025, the annual cap is about CHF 7,056 for employees affiliated with a pension fund. The 3a capital is added to the AVS and LPP at retirement.

In a retirement calculation, the 3a often serves to bridge the gap between your AVS + LPP income and the standard of living you target. The earlier you start, the greater the effect of compound interest.

A worked example

Take a single person, salary of CHF 100,000, full career. The 1st pillar pays an AVS pension close to the maximum (about CHF 30,000 per year). The 2nd pillar, with capital of CHF 500,000 and a 6.8% conversion rate, generates about CHF 34,000 per year. The 3rd pillar, taken as a lump sum, adds a one-off supplement.

Estimated annual retirement income: about CHF 64,000 of pensions (AVS + LPP), roughly 64% of the last salary — plus the 3a capital. This example is indicative: your situation depends on your canton, your pension fund and your choices. A personalised calculation is essential.

The factors that change the calculation

Several elements significantly change the result: early retirement reduces the AVS and LPP pensions; contribution gaps lower the AVS; LPP buy-ins increase your 2nd-pillar capital (and reduce your taxes); and cantonal taxation affects net income, especially with a lump-sum withdrawal.

Because these factors interact, estimating your retirement 'by hand' rarely gives a reliable result. That is exactly what the RetirePlan tool does: it calculates your three pillars, applies your canton's taxation and projects your income year after year.

Frequently asked questions

How do you calculate your retirement in Switzerland?

Add up the income from your three pillars: the AVS pension (1st pillar, based on your contribution years and average income), the pension or lump sum from your pension fund (2nd pillar / LPP, capital × conversion rate) and your 3rd-pillar (3a) savings. Then compare this total to your expected retirement budget.

What percentage of salary do you receive in retirement?

Together, the AVS and LPP target about 60% of the last salary for average incomes. The 3rd pillar helps get closer to the roughly 80% generally needed to maintain your standard of living.

At what age can you retire in Switzerland?

The reference age is 65 (women reach it gradually under the AVS 21 reform). Early retirement is possible from age 63 (sometimes earlier depending on the fund), but it permanently reduces the AVS and LPP pensions.

Is the RetirePlan retirement calculator free?

Yes: you get a free first verdict in a few minutes, with no credit card. The calculation accounts for the AVS, 2nd pillar, 3rd pillar and your canton's taxation.