Financial Provision
Switzerland has a system for financial provision. This system helps when you are no longer working, for example in old age or in the event of disability or death. It consists of three parts, also known as "pillars".
How it works:
First Pillar: State Pension Scheme
First Pillar: State Pension Scheme
- AHV (old-age and survivors' insurance): Everyone who works in Switzerland pays money into the AHV. This money is later paid out monthly as a pension. The AHV also pays spouse's and orphan's pensions.
- IV (disability insurance): If you can no longer work due to illness or accident, the IV helps.
Second Pillar: Occupational Pension Provision
Second Pillar: Occupational Pension Provision
- Pension fund: Employers and employees pay money into a pension fund. At Migros companies, this is usually the Migros Pension Fund (MPK) or Vorsorge in globo M (VIG). You get this money when you retire. With MPK and VIG, you have the choice between a monthly pension payment and a lump-sum withdrawal or a mix. The pension fund also pays benefits in the event of disability and death.
Third Pillar: Private Pension Provision
Third Pillar: Private Pension Provision
- Pillar 3a: You can save money for your old age yourself. There are special accounts or insurance policies for this. You save tax if you pay money into pillar 3a. Even paying in a small amount per month or year pays off in the long term.
- Pillar 3b: You can also save in other ways, for example with a normal savings account or investments.
The following video explains the system. You can discuss your individual situation with an expert in a financial planning consultation (e.g. at Migros Bank). These consultations are subject to a fee.
Here's what you can do today:
- Get an overview:
Take a look at how much money you will receive from the AHV and pension fund. You can enquire about this at the relevant offices. - Use Pillar 3a:
Consider whether you can pay money into pillar 3a. This helps you save on taxes and gives you more money for your pension. - Reduce debt:
Try to reduce or pay off debts. Less debt means more money in old age. - Budget planning:
Make a plan of how much money you need each month and how you want to spend it. So you can save better. - Seek advice:
Talk to a financial advisor. They can help you find the best strategy for your situation. - Continue working:
Think about whether you can or want to work longer. More years of work often mean higher pension. - Pay attention to your health:
Take care of your health. If you are healthy, you can work longer and spend less on visits to the doctor. You can find out more about this topic in the subpage on Health & Lifestyle.
These steps can help to improve your financial situation in old age. It's never too late to take care of your pension provision.
