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Pillar 1 is our state pension system, the AHV. Premium payments are split equally between you and your employer, with the money being deducted directly from your salary. However, the simultaneous fall in the number of employed people and rise in the number of retirees is putting increasing pressure on the AHV fund. The question of how much money the AHV fund will be able to pay out in pensions and whether the standard retirement age will have to be raised is currently the subject of much discussion among politicians.

Pillar 2, the occupational pension system, is where you save for your retirement yourself. The money is deducted from your salary today and then paid out to you later as part of your pension. As people are growing older all the time, pensions have to be financed for a longer period. Here, too, politicians are considering how to shore up pillar 2 to ensure that recipients can maintain an acceptable standard of living in retirement. Benefits are likely to be reduced in the future, however.

Private retirement planning makes a big difference. You can pay into pillar 3a voluntarily every year – up to a maximum of CHF 7,258 in 2025 – and doing so will actually save you money as every franc you pay in is tax-deductible, thereby reducing your tax bill. You can do this for the first time in the year in which you turn 18 and start to earn an income subject to AHV contributions. The earlier you begin and the more money you deposit in your account, the bigger the payout will be when you retire.

The good news is that you can already get a rough idea today of how much you will accumulate in your personal retirement provision over all the years. Then it is easy to work out how much will be paid into your account when you retire, which in turn gives you additional security and makes planning easier.