- Retiring at 62 lowers your pension fund pension for life: fewer contributions, less interest, a lower conversion rate.
- AHV is only reduced if you draw it early. You can wait until 65 to receive it in full.
- You need bridging capital to live three years without a pension, and you keep paying AHV contributions.
The balance: 62 versus 65
In our example, retiring at 62 costs about 6'600 francs of pension a year, for life, plus almost 300'000 francs to finance the first three years.
| Retire at 62 | Retire at 65 | |
|---|---|---|
| Pension fund capital | CHF 400'000 | ~CHF 483'000 |
| Conversion rate | ~4.4% | ~5.0% |
| Pension fund pension per year | CHF 17'600 | ~CHF 24'200 |
| AHV per year (from 65) | CHF 26'400 | CHF 26'400 |
| Capital to finance from 62 to 65 | CHF 288'000 | None |
| Pensions per year, for life | CHF 44'000 | ~CHF 50'600 |
Profile: CHF 400'000 in the fund at 62, AHV of CHF 2'200 a month at 65, a need of CHF 8'000 a month, CHF 15'000 of pension fund contributions a year, fund return of 3% a year, estimated conversion rates. Your real figures are on your certificate and in your fund's regulations.
Over 20 years of retirement, the lower pension adds up to more than 130'000 francs, on top of the bridging capital used up.
Why your pension fund falls on three fronts
- Fewer contributions: three years without payments, often the years with the highest salary.
- Less interest: your capital no longer has three years to grow.
- A lower conversion rate: often 0.2 to 0.3 points less per year of early retirement, for life.
Your pension certificate often shows the projected capital and pension for early retirement. How the rate works is explained in our article on the conversion rate.
AHV: you do not have to draw it early
Stopping work at 62 does not trigger AHV: it is a separate decision. You can draw it early from 63 at the earliest. In 2026, each year drawn early reduces the pension by 6.8%, for life: on an AHV pension of 2'200 francs, drawing it at 63 costs about 300 francs a month.
In return, you receive two more years of pension. The calculation breaks even around 78: beyond that, drawing early makes you lose money.
Stop working at 62, live on your 3a and savings, and only claim AHV at 65. You then receive it in full, for life.
Financing the years without a pension
Three years without a pension require capital equal to 36 months of spending. With a need of 8'000 francs a month, that is almost 300'000 francs. The possible sources, in the order they are often used:
- Savings and free investments: available with no conditions, capital gains not taxed for a private investor.
- Pillar 3a: withdrawable from 60. With several accounts, you spread the withdrawals. See the 3a limit.
- Vested benefits accounts: old pension fund assets set aside.
- Pension fund capital: if your fund's regulations allow a partial withdrawal. It reduces the future pension accordingly.
Spread withdrawals to pay less tax
Withdrawals from the pension fund, vested benefits and 3a are taxed separately, at a rate that rises with the total withdrawn in the same year. Early retirement gives you exactly the time to spread them: one 3a account at 60, another at 61, another at 62, then vested benefits or part of the pension fund in the following years. On large capital, the saving often runs into tens of thousands of francs.
A pension fund buy-in cannot come out as a lump sum for 3 years (BVG art. 79b). If you buy in to improve your early retirement, do it early enough.
Going further
You still pay AHV until 65. Without gainful employment, you must pay contributions calculated on your wealth and pensions. If your spouse still works and contributes enough, you may be exempt. Register with your compensation office, otherwise a gap can reduce your pension.
Early drawing rates are changing. From 2027, AHV early drawing reductions will be adjusted to life expectancy, with smaller reductions for low incomes. Check the rates for the year you leave.
Retiring early abroad? If you leave Switzerland when you stop working, your pension fund and 3a follow the leaving rules, and you stop contributing to AHV. See leaving Switzerland.
Lump sum or pension if you retire early?Compare both with your reduced conversion rate.
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Frequently asked questions
What does retiring at 62 really cost?
In our example: about CHF 6'600 less pension fund pension every year for life, and capital of CHF 216'000 to 360'000 to live from 62 to 65 depending on your lifestyle. AHV is only reduced if you draw it early.
Can I stop working at 62 without drawing AHV?
Yes. Stopping work and claiming AHV are two separate decisions. You can live on your 3a and savings until 65, then draw AHV without any reduction. During those years, you pay AHV contributions as a non-employed person.
From what age can I draw AHV early?
From 63, two years before the reference age. In 2026, the pension is reduced by 6.8% per year drawn early, for life. From 2027, these rates will be adjusted to life expectancy.
Is the pension fund conversion rate lower before 65?
Yes, in most funds: often 0.2 to 0.3 points less per year of early retirement. A fund at 5.0% at 65 may apply 4.4% at 62.
How do I finance the years between stopping work and the pensions?
With pillar 3a (withdrawable from 60), vested benefits accounts, savings and investments, and sometimes a partial withdrawal of pension fund capital if the regulations allow it. Spread the withdrawals over several years to pay less tax.
I plan to retire early in my home country. What changes?
Your Swiss pensions follow you, but AHV still needs contributions until 65 if you stay in Switzerland until then. If you leave, your pension fund and 3a follow the leaving rules, and the tax on withdrawals is taken at source in Switzerland.
Sources: FSIO, 2026 AHV amounts, AHV 21 reform and contributions of non-employed persons ; BVG / LPP art. 13 (retirement age), art. 79b (buy-ins) ; BVV 3 / OPP 3 art. 3 (3a withdrawal from 5 years before the reference age) ; Swisscanto, 2024 pension fund study. Worked examples: ViaVest calculations.