How Retirees Can Benefit From Health Insurance in Switzerland

Photo of author

( — August 10, 2023) — Retirement and pensions in Switzerland are a crucial part of the social security system, ensuring that retirees benefit from health insurance during their retirement years. Switzerland has a well-developed pension system that consists of three main pillars, each contributing to different aspects of retirement income.

First Pillar

The OASI state pension, referred to as the 1st pillar, is designed to provide essential retirement support. Upon reaching retirement age, individual pensions range from CHF 1,225 to CHF 2,450 per month. Your pension is influenced by factors like years of OASI contributions; consistent payments secure a full pension, while missed contributions lead to reduced pensions (e.g., a year of missed payments reduces pension by about 2.3%).

Higher earnings result in increased OASI contributions and subsequently higher pensions. Achieving the maximum pension requires an average annual income of approximately CHF 88,200. Married couples’ or partners’ pensions are capped at 150% of the maximum single pension (CHF 3,675), even if combined pensions surpass this.

Standard retirement ages in Switzerland are 64 for women and 65 for men. Opting for early retirement (1 or 2 years before) results in pension reductions of 6.8% or 13.6% respectively. Conversely, delaying retirement by up to 5 years boosts pension payments due to extended work duration.

Pension estimates can be requested at any time, though they depend on prevailing laws and prior contributions. Supplementary benefits are accessible if the OASI pension doesn’t cover essential living expenses. OASI recipients can also obtain medical and support equipment like walking aids, glasses, prosthetics, and lifts.

Second pillar

Upon attaining retirement age, the calculation of your 2nd pillar pension relies on the combination of your work-related contributions and the guidelines set by your chosen pension fund. Once you’ve reached this milestone, it’s customary to receive a monthly pension based on the sum you’ve accrued over your career. Different pension funds extend options, such as receiving a portion (e.g., 25%) of your 2nd pillar savings upfront as a lump sum, while the remainder can be obtained as a recurring monthly pension, or you might choose to receive the entire accumulated amount as a lump sum. The calculation of this pension involves the utilization of a conversion rate, which is applied to your 2nd pillar savings. This rate determines the assistance that will support you throughout your lifetime; by law, the minimum conversion rate stands at 6.8%. To illustrate, if you’ve collected CHF 200,000 in savings and the conversion rate is 6.8%, your yearly assistance would amount to CHF 13,600, equivalent to CHF 1,133 per month. For a comprehensive understanding of your 2nd pillar savings, payout alternatives, and the pension to which you’re entitled, it’s recommended to establish contact with your pension fund. As for the prospect of retiring early or deferring retirement, the regulations of pension funds allow for the choice of early retirement (beginning at age 58) with a diminished pension or the option to delay retirement until age 70, which results in an elevated conversion rate and subsequently, a more substantial pension. For precise and tailored information pertaining to your pension, do not hesitate to get in touch with your pension fund.

Third pillar

By voluntarily contributing to a 3rd pillar account, you enhance your overall retirement funds. Generally, you have the option to withdraw your 3rd pillar savings all at once (starting as early as five years before the official retirement age and up to five years after if you can verify ongoing employment).

To ascertain your capital, withdrawal alternatives, and the sum available if you choose early retirement or postponement, it’s advisable to communicate with the financial institution where your 3rd pillar account is held.

It’s important to note that the retirement age in Switzerland varies depending on the pillar and gender. The official retirement age for women is currently 64 and for men is 65. There are discussions and ongoing reforms in Switzerland to address potential challenges associated with the aging population and maintaining the sustainability of the pension system.

For accurate and up-to-date information on retirement and pensions in Switzerland, it’s advisable to consult official government sources or financial advisors who are knowledgeable about the Swiss pension system.