When you draw your Pensionskasse you decide, once, between a lifelong pension, capital — or a mix. The choice shapes taxes, flexibility and security for the rest of your life.
When your Pensionskasse balance falls due, you make one of the most consequential decisions in all of retirement planning: pension, capital or a combination. It is usually irreversible.
The pension: predictable and lifelong
The pension is calculated from the balance using the conversion rate (statutory BVG minimum 6.8%, often lower in the supplementary range). It is guaranteed for life and protects against the risk of outliving your capital — but is taxed in full as income.
The capital: flexible and inheritable
The capital withdrawal is taxed once at a reduced rate (cantonal/communal plus a fifth of the ordinary federal tariff). The money stays yours — freely investable and inheritable — but you bear the investment and longevity risk yourself.
- Pension: maximum security, full income tax, not inheritable.
- Capital: maximum flexibility, a one-off capital tax, investment & longevity risk.
- Mix: by law at least 25% can be taken as capital — many combine a basic income via pension with a flexible capital portion.
There is no universally right answer. Health, other wealth, family situation and risk appetite decide — personal advice is worth it.
What makes early retirement special
With an early withdrawal the conversion rate is lower (the pension has to last longer), and the balance had less time to grow. At the same time, a capital withdrawal can fill the liquid bridge you need anyway. Both effects often argue for a (partial) capital withdrawal — but not always.
In the Pillar Zero calculator you set the withdrawal type and conversion rate and see the effect on taxes, liquidity and the reach of your wealth straight away.
Educational tool, not financial or tax advice. Figures are 2026 estimates without warranty.
Work out your own early retirement →