Pensions made simple · Episode 9
Pension or lump sum?
The key decision
A decision for life – final and irreversible.
Option 1
The pension: security
Advantages
- Guaranteed until the end of life
- No investment risk, no effort
- Predictable monthly income
Drawbacks
- Taxed 100 % as income
- Spouse usually receives only 60 %
- Not inheritable by other heirs
Option 2
The lump sum: flexibility
Advantages
- Free disposal & your own strategy
- One-off taxation at a reduced rate
- Fully inheritable
Drawbacks
- Investment risk sits with you
- Longevity risk: the money must last
- Wealth tax thereafter
The statistics
What do the others do?
39 %choose the pension
38 %choose the lump sum
23 %combine both
Proven rule of thumb: cover fixed costs with the pension, take the rest as capital.
The formalities
Don't miss the deadlines
12 mo.Registration deadline for the lump sum – fund-dependent
✍Married persons: spouse's consent required
25 %Legal minimum entitlement to capital from the mandatory part
Good to know
Calculate before deciding
💡 The decision is final. Taxes, health, marital status, other assets, conversion rate: run the numbers on both options before signing.
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This video is no substitute for personal advice.
Baeriswyl Beratungen GmbH · Finance & pension planning · Fribourg