Partial retirement in Switzerland: easing into retirement step by step

What does partial retirement mean?

With partial retirement, you reduce your working hours and draw a matching share of your retirement benefits. If you go from 100% to 60%, for example, you retire 40%: 40% of your retirement savings become payable as a pension or lump sum, while the remaining 60% stays insured and keeps growing.

In your pension fund, partial retirement is possible from the earliest retirement age in the regulations. The law allows regulations to set that age at 58 at the earliest (Art. 1i BVV 2/OPP 2). Many funds allow partial retirement from 58 or 60, some only later. Since 2024, the LPP explicitly provides for drawing retirement benefits in steps.

Most pension funds require a minimum reduction in working hours or salary, often at least 20% of a full-time position. If you only cut back by 10%, you may not be able to draw any retirement benefits, depending on the regulations. Your fund's regulations are what count.

Pension fund: no more than three lump-sum withdrawals

Since 1 January 2024, Art. 13a LPP states that retirement benefits taken as a lump sum can be drawn in no more than three steps. Under current practice, one step covers all lump-sum withdrawals in the same calendar year. Drawing a pension is not affected by this limit: you can start partial pensions in several stages, provided your regulations allow it.

Your pension fund may set stricter rules, for example only two steps, a minimum reduction per step, or a lump sum only at the final stage. Clarify these points with your fund early, before agreeing new working hours with your employer.

Important for tax: the tax authorities accept staggered lump-sum withdrawals as part of a genuine partial retirement, meaning each stage matches a real and lasting reduction in working hours. A buy-in into your pension fund in the three years before a lump-sum withdrawal can be reversed for tax purposes.

Keeping your previous salary insured (Art. 33a LPP)

If you reduce your salary by no more than half from age 58, you can choose to keep your previous insured salary insured, provided your regulations offer this option. That way your future retirement savings do not fall in step with your salary.

You generally pay the contributions on the salary you no longer earn yourself, including the employer's share, unless your employer agrees to contribute. Maintaining insurance is an alternative to a partial withdrawal: if you choose it, you usually do not draw retirement benefits during that phase.

AVS: drawing or deferring part of your pension

AVS 21 has also made the AVS more flexible. You can draw between 20% and 80% of your old-age pension early, from 63 at the earliest (from 62 for women of the 1961-1969 transition generation). The portion drawn early is reduced for life by 6.8% per year of early withdrawal; the rest is not reduced. You can likewise defer part of your pension beyond the reference age to receive a lifelong supplement.

As long as you work, you keep paying AVS contributions on your salary. After the reference age, an allowance of CHF 16,800 a year (CHF 1,400 a month) applies unless you opt out of it. Since 2024, contributions paid after 65 can, under certain conditions, still improve your own pension, for example by filling contribution gaps. If you only work a small percentage before 65, check whether you also owe contributions as a non-employed person: this is the case if the contributions on your part-time salary are less than half of what you would pay as a non-employed person.

Worked example: 80%, then 50%, then full retirement at 65

Ms Keller, 62, has retirement savings of CHF 600,000 and wants to stop gradually. Her pension fund allows partial retirement from 60 and a lump-sum withdrawal in three steps. She drops to 80% at 62, to 50% at 63 and retires fully at 65. She takes each stage as a lump sum.

Because lump-sum withdrawal tax is progressive, the three tax bills add up to less than a single withdrawal of CHF 600,000. Ms Keller also keeps earning a part-time salary until 65, and the insured part of her savings keeps earning interest. She withdraws her 3a accounts in the in-between years, at 64 and 66, so they are not added to the pension fund instalments.

Pros and cons at a glance

Advantages: a gentle transition, a part-time salary instead of pension capital for the first years, continued AVS and LPP contributions, staggered lump-sum withdrawals with a lower tax bill, and more time to decide between pension and lump sum for the rest.

Disadvantages: not every employer accepts reduced hours, and the regulations can set hurdles. A partial withdrawal as a lump sum is final. Withdrawing too much capital too early also weakens your disability and death cover on the withdrawn portion.

Your partial retirement in your plan

How much to work, how many instalments, pension or lump sum, and when to withdraw your 3a accounts? In RetirePlan, you model your partial retirement year by year, with salary, AVS, pension fund, tax and assets, and compare unlimited scenarios, free.

If you would also like an expert to review your plan, a personal analysis is available as an option; the tool itself remains free.

Frequently asked questions about partial retirement

From what age is partial retirement possible?

In your pension fund, from the earliest retirement age in its regulations, at 58 at the earliest. You can draw part of your AVS pension early from 63 (from 62 for women born 1961 to 1969).

How many times can I withdraw a lump sum in partial retirement?

Since 2024, the LPP allows no more than three lump-sum withdrawals (steps), with all withdrawals in the same calendar year counting as one step. Your regulations may allow fewer. Partial pensions are not affected by this limit.

By how much do I have to reduce my working hours?

Your regulations decide. Many pension funds require at least 20% of a full-time position per step. Smaller reductions often do not entitle you to a partial withdrawal.

Can I keep my previous salary insured even though I earn less?

Yes, if your regulations provide for it: from 58, with a salary reduction of no more than half, you can keep your previous insured salary insured (Art. 33a LPP). You generally pay the extra contributions yourself.

Does partial retirement save tax?

Often, yes, if you withdraw the capital in instalments over several calendar years. Each instalment is taxed separately at a lower rate. Plan your pillar 3a too, so it is not paid out in the same year as a pension fund instalment.

Do I keep paying AVS contributions during partial retirement?

Yes, on your part-time salary as before. With small working hours before 65, you may also owe contributions as a non-employed person. Your AVS compensation office checks this every year.