Capital or pension?
At retirement, your pension fund offers an irrevocable choice: a lump sum or a lifetime pension. This simulator shows how long each option lasts and which is better for your situation.
Last updated: May 2026 · Legal minimum BVG conversion rate 2026: 6.8% (mandatory portion only)
Simulator
Your situation
Compare both options over the long term.
Capital outside BVG (pillar 3a, savings, vested benefits). This capital follows the same strategy as the invested capital.
* Effective average rate of Swiss pension funds 2026. Legal minimum: 6.8% on the mandatory portion.
Adjust based on your other retirement income (AHV, pillar 3a, etc.).
Advanced parameters
The BVG pension is taxed as ordinary income each year.
Applied to the capital scenario only. Reduced rate, varies by canton and amount.
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Capital or pension: an irrevocable decision that deserves careful thought
At retirement, your pension fund offers to convert your BVG savings into a monthly lifetime pension, or to withdraw it as capital. This decision is final and irrevocable. It depends on many personal factors that simulators can only approximate.
The pension offers complete security: you receive a fixed amount every month until death, regardless of age. The longevity risk is entirely borne by the pension fund. In return, if you die early, the remaining capital generally does not go to your heirs.
Capital gives you control: you invest according to your profile, you adapt your withdrawals to your needs, and your estate can inherit the balance. But you bear market risk and longevity risk. If the capital is depleted at age 80 and you live to 95, the consequences are serious.
In Switzerland, with a life expectancy of around 87 years for women and 84 years for men (FSO), the pension is statistically advantageous for the majority of insured persons at a sufficient conversion rate. Both lines on the chart show how capital depletes in each scenario: both start at the same initial amount and decrease according to the monthly withdrawal.
Sources: FSO (life expectancy in Switzerland 2024), BVG (Federal Act on Occupational Retirement, Survivors and Disability Pension Plans), legal minimum conversion rate FSIO 2026.
Frequently asked questions about BVG capital or pension
What is the BVG conversion rate?
The conversion rate transforms your BVG capital into an annual lifetime pension. With a rate of 6.8% and CHF 500,000 in capital, you receive CHF 34,000 per year (CHF 2,833 per month) for life. For the above-mandatory portion, your pension fund may apply a lower rate, which effectively reduces the real pension.
What is the BVG conversion rate in 2026?
The legal minimum rate for the mandatory portion is 6.8% in 2026. But the vast majority of pension funds apply rates of 5 to 6% on total capital (mandatory and above-mandatory combined). The actual rate applied to your capital depends entirely on your specific pension fund regulations.
Can I take part as capital and keep part as a pension?
Yes, most fund regulations allow a partial withdrawal. You can for example withdraw 50% as capital to repay a mortgage or diversify, and convert the rest to a pension. This hybrid approach combines the security of a guaranteed income with the flexibility of capital.
At what age can I withdraw my 2nd pillar?
Early withdrawal for retirement is possible from age 60 (5 years before ordinary retirement age). Withdrawal is also permitted for purchasing a primary residence, starting a self-employed activity, or permanently leaving Switzerland.
Is the capital/pension decision final?
Yes, the decision is irrevocable. Once capital is withdrawn or the pension has started, there is no going back. This irreversibility justifies a thorough analysis: health, family situation, other income sources, tax situation.
How is capital withdrawal taxed?
BVG capital withdrawn is taxed separately from ordinary income at a reduced rate (capital withdrawal tax). As a guide, in Geneva, a withdrawal of CHF 500,000 incurs a tax of CHF 40,000 to 60,000. The pension is taxed as ordinary income each year.