Early Retirement: How to Finance Your Early Exit
The desire for an early exit from working life requires thorough planning. Learn what financial hurdles await you.
The Expensive Years Until Regular Retirement
Those who retire before the regular retirement age often underestimate the financial consequences. Every month in early retirement means not only missing salary income, but usually also leads to lifelong reductions in the pension fund. Since retirement capital is saved and accrued for a shorter period, a crucial building block is missing. This income gap must be covered from private assets.
AHV contribution obligation: Even as an early retiree, you pay AHV contributions until the regular retirement age. Plan for these in your budget to avoid unpleasant surprises.
Strategies for a Successful Retirement
To compensate for the missing annual income, you should set the right levers in motion in good time (ideally 10 to 15 years in advance):
- Pension fund purchases: Close contribution gaps and save taxes in the process.
- Private wealth building: Use pillars 3a and 3b specifically for bridging.
- Partial retirement: Gradually reduce your workload as a gentle and financially more considerate transition.
Conclusion
Early retirement is absolutely feasible, but it does not forgive short-term planning mistakes.
Frequently Asked Questions
3 answers about this topic
Per year of early withdrawal, your lifelong pension usually decreases by 5 to 7 percent.
Early withdrawal is possible by one to two years, but costs a lifelong 6.8% reduction per year of early withdrawal.
Financially, often yes. You preserve your retirement capital and can continue to save in a tax-optimized manner.
Author
Adis Kavazovic
Head of Insurance & Financial Planning
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