Switzerland is known for its robust economy and strong social safety net. Despite this, retirement planning for the self-employed remains a key issue that is often overlooked. Self-employment offers freedom and flexibility, but it also requires individuals to take responsibility for their own retirement planning. This presents a particular challenge, as self-employed individuals are not automatically enrolled in an employer-sponsored retirement plan.
In this article, you—as a self-employed individual—will learn everything you need to know about retirement planning. We’ll provide an overview of the various retirement planning options to help you prepare for the risks associated with aging and other unforeseeable events.
General Conditions for Self-Employment: Who Is Considered Self-Employed?
Individuals who run their own business and are not employed by anyone are considered self-employed. They operate under their own name and bill for their work on their own behalf.
Sole proprietors run a business without any legal separation from themselves; they are personally responsible for paying their social security contributions and do not have automatic accident insurance. They must arrange their own retirement savings, which includes utilizing Pillars 2 and 3.
More information on the topics Self-Employment in Switzerland and registering as self-employed as well as insurance for the self-employed can be found in our guide.
Individuals who own a stock corporation (AG) or a limited liability company (GmbH) are often considered employees of their own companies. In this scenario, they are generally covered by the company’s workers’ compensation insurance and can make contributions to their company’s pension fund.
Unlike self-employed individuals, this structure provides a certain degree of separation between the owner’s personal finances and the company’s finances, which offers both legal and financial advantages.
Pillar 1: AHV for the Self-Employed
The amount of the AHV contribution depends on your salary and ranges from 5.371% to 10%, but is at least CHF 530 per year (as of 2025). As a self-employed person, you must pay the full AHV contribution without any gaps.
The contribution already includes the mandatory portion for disability insurance (IV) as well as for loss of earnings (EO). Since AHV contributions are based on the final tax bill, they can vary significantly depending on your income. Therefore, you should always set aside enough money to cover these contributions.
| Annual earned income in CHF of at least, but less than: | AHV/IV/EO contribution rate as a percentage of earned income |
| 10’100 – 17’600 | 5.371 |
| 17’600 – 23’000 | 5.494 |
| 23’000 – 25’500 | 5.617 |
| 25’500 – 28’000 | 5.741 |
| 28’000 – 30’500 | 5.864 |
| 30’500 – 33’000 | 5.987 |
| 33’000 – 35’500 | 6.235 |
| 35’500 – 38’000 | 6.481 |
| 38’000 – 40’500 | 6.728 |
| 40’500 – 43’000 | 6.976 |
| 43’000 – 45’500 | 7.222 |
| 45’500 – 48’000 | 7.469 |
| 48’000 – 50’500 | 7.840 |
| 50’500 – 53’000 | 8.209 |
| 53’000 – 55’500 | 8.580 |
| 55’500 – 58’000 | 8.951 |
| 58’000 – 60’500 | 9.321 |
| 60’500 + | 10.000 |
The Second Pillar: Voluntary Pension Fund Options
The 2nd pillar is voluntary for self-employed individuals. However, if your annual income is at least 22,680 Swiss francs (as of 2025), you may make contributions to a pension fund.
As a member of a professional association that operates its own pension fund, you can enroll in it. Depending on the pension fund, you may also be allowed to enroll in your own employees’ pension fund. However, if this is not permitted, or if you do not belong to a professional association with its own pension fund, you can have the mandatory amount insured through the BVG Supplementary Pension Fund.
Contributions to a pension fund are tax-deductible and, by law, may not exceed 25% of the insured annual AHV salary. If you would like to take full advantage of your contribution potential, it is even possible to transfer balances from existing 3a accounts into the pension fund. However, a reverse transfer is not possible.
The Third Pillar: Flexible Private Retirement Savings
Pillar 3a allows you to build up capital for retirement or in the event of disability. If you are not a member of a pension fund, you may contribute 36,288 Swiss francs annually (for the year 2025) or up to 20% of your net income. You may deduct the full amount contributed from your taxable income.
In addition, the accumulated balance is not taxed as assets, but only upon withdrawal, and even then at a reduced rate. The balance can either be withdrawn early as startup capital during the first year of your self-employment or used at a later date to purchase a home or to emigrate.
Important: Even if you are self-employed and choose to save through a pension fund, you may contribute up to 7,258 francs (2025) to Pillar 3a.
Pension fund or third pillar?
When choosing between a pension fund and the third pillar, various factors come into play.
Tax Benefits:
For incomes up to 150,000 Swiss francs, both models offer similar tax benefits. However, if your income is higher, only the pension fund allows for comprehensive, high-level retirement planning with corresponding tax savings.
Insurance Coverage:
- Pension Fund: Always includes insurance benefits, particularly for disability and death. However, the options for tailoring the plan to individual needs are limited. Contributions toward a survivor’s pension are mandatory and must be paid regardless of one’s family situation.
- Pillar 3a: This option focuses more on retirement savings and offers less comprehensive insurance coverage compared to a pension fund
Many plans include coverage for disability or family protection. Separate term life insurance policies are available, but they do not qualify for tax benefits.
Flexibility in contributions and options for purchasing additional coverage:
- Pillar 3a: Offers a high degree of flexibility and can be tailored to your personal needs. However, contributions are capped at a specified maximum amount, and no additional contributions can be made after the fact.
- Pension Fund: Allows for additional and retroactive contributions, including for past years. This is particularly relevant for self-employed individuals looking to close previous gaps in their retirement savings.
Use of Capital:
- Pension Fund: The focus is primarily on retirement savings.
- Pillar 3a: Offers greater flexibility in how the accumulated funds can be used, such as for purchasing a home, starting a business, or financing a move abroad.
Higher income and savings goals:
If your savings goal is more than 20% of your income, the pension fund offers better opportunities for tax savings than Pillar 3a.
Retirement Planning for the Self-Employed
For self-employed individuals, it is essential to pay AHV contributions without interruption, as these form the basis of retirement planning. To ensure an adequate standard of living in retirement, it is advisable to join a pension fund and open one or more Pillar 3a accounts. Having multiple accounts increases your flexibility, as withdrawals are always made in full.
The decision between a pension fund and Pillar 3a should be based on your individual needs and financial goals; both options offer attractive tax benefits and should therefore be incorporated into your retirement planning strategy early on.
Regardless of your income, Pillar 3a allows for flexible contributions, even below the maximum amount. Careful and early planning of your retirement savings, taking all available options into account, is crucial for a secure financial future. By developing a customized retirement strategy that takes both your current needs and your long-term goals into account, you can ensure that you’ll be well provided for in retirement.
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