AHV pension: what you need to watch out for

If you want to estimate how high your AHV pension will be, you must look at two key factors: the number of years you have paid in, and your average annual income during the period of insurance. Parenting credits for children under 16 years of age, and care credits for looking after close relatives, also count. Don’t forget to register to draw your pension in good time (3 to 4 months before the first payout). AHV pensions are not paid out automatically.

The contribution period for pillar 1 is measured on a scale of 1 to 44. You get 44 years if you’ve paid at least the minimum contribution (currently CHF 482) into the AHV every year until retirement, starting when you were 21 years old. In this case, you are entitled to a full pension. For individuals, this amounts to an annual AHV pension of between CHF 14,220 and CHF 28,440. For married couples, the sum ranges between CHF 28,440 and CHF 42,660 (as of 2019). Every contribution year that is missing leads to a pension reduction of at least 1/44 (partial pension).

Pension scale 44 of the Federal Office of Social Insurance (ahv-iv.ch), gives you an indication of your pension amount. You will receive the minimum AHV pension if you have an average annual income of up to CHF 14,220. You will receive the maximum pension if you have an average annual income of CHF 85,320 or more.

You can draw your AHV pension one or two years before the statutory retirement age. However, this will lead to a lifelong pension reduction of 6.8 percent (drawing one year early) or 13.6 percent (drawing two years early).

Deferring (by a maximum of five years) increases your pension by 31.5 percent. This is worthwhile if you anticipate living until you are 85 or older.