The essential points you should know about saving for retirement

Your best bet is to set up a pillar 3a account with a bank. This gives you far more flexibility than with an insurance company, whose policies usually require you to pay a fixed amount annually. This can quickly become a burden, especially at the start of your working life.

You are limited to how much you can pay into pillar 3a each year, which is currently CHF 7,056 (2024). Doing so will allow you to save for retirement. It is a good idea to start paying in from a young age – even small amounts during the first few years are enough.

A full AHV pension is only available to those who have continuously paid in during their professional lives from the age of 21. Students and unemployed individuals are required to pay a minimum amount. Those who didn’t pay in during their studies or who worked abroad will have to repay afterwards. The good news is that with the AHV (pillar 1), you can repay the amounts owed for the previous five years. Contact the compensation office if you’re not sure whether you have any payment gaps. After all, better safe than sorry.

One drawback of part-time work is that not all of the money you earn from each job is insured in the pension fund. A so-called “coordination deduction” of CHF 25,725 is deducted from your salary. If you have two jobs, this amount is deducted twice, meaning that you and your employer will contribute less to the pension fund.

If you pay into pillar 3a with a bank, you don’t just save on taxes. In pension funds, you can invest some or all of your savings in securities. You are free to decide how much to invest based on your own risk appetite. This is almost always worthwhile in the long term and increases your savings.