Calculate the pension gap in Switzerland and close it with Pillar 3a

1. Calculate the pension gap in Switzerland: how it works

For the calculation, you compare around 80 percent of your last gross income with the expected pensions from OASI (1st pillar) and the pension fund (2nd pillar). What remains is your pension gap. Reference points for the expected pensions are provided by the pension fund certificate and the OASI account statement.

Example calculation: A 49-year-old marketing manager from Winterthur earns CHF 100'000 per year. For her accustomed standard of living, she reckons with 80 percent, so CHF 80'000. From OASI and the pension fund she expects around CHF 56'000 together.

_{Illustrative example calculation. The actual pension depends on contribution period, salary history and pension fund.}

Over the entire retirement period, this gap quickly adds up to several hundred thousand francs. The earlier you know your own figure, the more room you have to counter-steer.

2. What costs do OASI and the pension fund cover?

The first and the second pillar are designed to replace together about 50 to 60 percent of the last income. With higher incomes, the value is often at the lower end, because OASI is capped at the top. For the accustomed standard of living, however, around 80 percent is considered necessary. Exactly this difference remains as a gap.

How the three pillars interlock is explained in detail by the three-pillar system. OASI secures the basic need, the pension fund supplements it and private provision covers the rest.

3. What does pension gap mean?

The pension gap is the difference between your need in old age and the pensions from OASI and the pension fund. Everything these two pillars do not cover, you have to build up privately. If the difference remains uncovered, the standard of living drops noticeably after retirement.

The gap turns out especially large in several situations. Those who work part-time over many years pay less into the pension fund. Employment interruptions, self-employment without a pension fund or a high income with capped OASI enlarge the difference additionally. It often affects women more strongly due to motherhood and part-time work. A divorce or a long partnership in cohabitation also change provision long-term.

The gap can be closed most specifically with Pillar 3a. Regular contributions build up capital over the years and at the same time help to save taxes. Which contribution and investment form fits is shown by the pension type.

An example illustrates how strong the effect is: CHF 300 per month make CHF 3'600 per year. Over 30 years, at an average 4 percent return, this grows into pension assets of around CHF 202'000, although you paid in only CHF 108'000 yourself. The difference is made by the compound interest effect. With higher contributions or a longer investment horizon, the final capital grows accordingly:

_{Illustrative values, tuned to the chosen investment strategy. Returns fluctuate and are not guaranteed.}

More on the Pillar 3a maximum contribution

Pillar 3a maximum contribution 2026

How much you may pay into Pillar 3a per year and how you fully use the tax deduction is shown by the overview of the maximum contribution.

4. How much money do I need at least in old age?

As an absolute lower limit applies the amount that the supplementary benefits set for the general living need: in 2026 that is CHF 20'670 for single persons and CHF 31'005 for married couples per year. On top come recognised costs for housing and health.

The minimum OASI old-age pension in 2026 is around CHF 1'260 per month, the maximum pension CHF 2'520 (single persons). So those who only draw OASI stay close to the subsistence minimum. Only the pension fund and private provision create the necessary distance.

5. How much money do I need to keep my accustomed standard of living?

As a rule of thumb, 80 percent of the last gross income applies to continue everyday life as usual. The missing 20 percent result from the fact that after retirement job-related costs and the savings contributions for provision fall away.

With rising income, the gap grows disproportionately, because OASI and the pension fund cover a smaller share. The following values show the order of magnitude:

_{Guide values based on the 80-percent rule. The individual gap depends on salary history and pension fund.}

6. What influence does retirement have on saving behaviour?

Most clearly, after retirement the savings share changes. Before retirement, a large part of households sets aside a noticeable share of income every year. After the age of 65, this savings rate drops sharply; with single-person households it often slides into negative territory. Retirees then draw on savings instead of building up further.

These figures are collected by the Federal Statistical Office as part of the household budget survey. For pension planning this means: the buffer built up in younger years co-determines how comfortable retirement turns out.

7. Which costs rise after retirement?

Not all expenses sink in old age. Above all, health costs increase over the years, for example for deductibles, dental treatments or care. At the same time, the hoped-for tax saving turns out smaller than expected: as a pensioner, the professional expenses fall away as a deduction and contributions to Pillar 3a are no longer possible either.

Because contributions to Pillar 3a end with retirement, an early planning of the withdrawal is worthwhile. A staggered withdrawal over several years lowers the tax on the capital and gets more out of the saved pension assets.

Whoever knows their own pension gap early can close it with manageable contributions via Pillar 3a. Decisive is a solution with low costs and an investment strategy that fits the investment horizon.

This article was first published on 16/04/2026