Retirement planning: just for grown-ups?

When you're 20, life is moving fast—studying, first jobs, travels, passions. Retirement? That feels lightyears away. For many young adults, retirement planning seems like something that only concerns their parents: "I'll worry about it later", "I don’t earn enough yet", or "That’s for older people."

But here’s the truth: thinking about retirement early is not a burden—it's a smart move.


What retirement planning really means

In Switzerland, retirement planning is structured through the three-pillar system:

  1. AHV/IV (1st pillar) – mandatory for all, provides a basic income.

  2. Pension fund (2nd pillar) – mandatory for employees earning over CHF 22,680 per year, helps maintain your lifestyle after retirement.

  3. Private pension (3rd pillar) – voluntary but essential to fill income gaps and benefit from tax savings.

Since the 1st and 2nd pillars together cover, on average, only about 60% of your last salary, the 3rd pillar becomes key to building your financial independence.


The age advantage: compound interest

Albert Einstein called it the eighth wonder of the world. Compound interest lets your money grow exponentially over time.

A quick example:

  • Anna starts contributing CHF 200/month at age 25 to a 3rd pillar account with a 4% annual return.

  • Marco starts the same amount but only at 35.

By age 65, Anna will have over CHF 240,000, Marco only CHF 140,000. Why? Because time matters—not just how much you invest.


What if I earn little or have a side job?

Retirement planning isn’t just for those with high salaries or full-time jobs. Even small, regular contributions make a difference over time. Today, many Swiss providers offer flexible 3rd pillar options, tailored for students, freelancers, or part-time workers.

Plus, contributions to the 3rd pillar are tax-deductible (up to CHF 7,258 in 2025), which means saving money today while building your future.


Not just about pensions: it’s about freedom

Planning for retirement early is not about fear—it’s about freedom.

It means that one day, you could:

  • choose if you want to work or not,

  • change careers without stress,

  • take a sabbatical,

  • fund a project,

  • support your future family.

You’re not locking yourself into a rigid plan—you’re buying options.


A question of responsibility, too

Switzerland’s demographics are shifting. According to the Federal Statistical Office, by 2050, there will be almost 2 people of retirement age for every 3 working-age individuals.

We can’t rely solely on the public system anymore. Planning today means taking responsibility for your future—and easing the burden on future generations.


Where to start?

If you're between 20 and 30, here's how to begin:

  1. Check if you already have a 2nd pillar – ask your employer.

  2. Open a 3rd pillar account – ideally with investment-based funds if you're young.

  3. Learn the basics – returns, risk, inflation.

  4. Set goals – not just for retirement, but for personal projects.

  5. Speak to a trusted advisor – to tailor a plan to your needs.


The future starts today

There’s no perfect age to begin. But the best one is: now.

Retirement planning at 20 isn’t about giving up your present—it’s about protecting your freedom for tomorrow.

Take the first step today.
Talk to a financial advisor. Open a 3rd pillar account. Or simply get informed.
The future isn’t something that just happens—it’s something you build.