Early retirement: How can you achieve it?

Early retirement: a long‑term project 

Early retirement appeals to many people looking to regain time, pursue personal projects or adopt a different pace of life. However, retiring earlier than planned involves significant financial, wealth‑planning and tax implications.

Like any major life project, early retirement is much more likely to succeed when it is carefully planned in advance and based on a comprehensive view of your financial situation.

Assessing the financial feasibility of your plan 

Before considering early retirement, it is essential to assess your financial room for manoeuvre. This analysis helps determine whether your future income will be sufficient to cover day‑to‑day living expenses, personal projects and unforeseen events.

Building adequate financial reserves is a key success factor, allowing you to cope with longevity risk, inflation and exceptional expenses over time.

Minimum age and applicable rules

In Switzerland, the conditions for early retirement vary depending on the pension pillar involved.

• For OASI (1^st pillar), pension benefits may be drawn up to two years early, subject to a permanent reduction in the pension amount.

• For occupational pension schemes (2^nd pillar), early retirement is generally possible from the age of 58, subject to the specific rules set out in your pension fund regulations.

It is therefore crucial to review the conditions applicable to your own pension institution.

Anticipation and impact on retirement benefits 

Retiring early mechanically leads to a reduction in future benefits. In the case of OASI, each year of early withdrawal reduces the lifelong pension. For the second pillar, the shortfall can also be significant, whether taken as a pension or as capital.

In some cases, these effects may be partially mitigated through appropriate planning measures, such as voluntary buy‑ins or a structured retirement strategy.

Understanding the role of your pension fund

Before making any decision, you should carefully review the regulations of your pension fund, which determine in particular:

• the exact conditions for early retirement,

• the applicable benefit reductions,

• the rules and deadlines for any lump‑sum withdrawals.

While pension funds are legally required to allow the withdrawal of at least 25% of accumulated capital, individual rules may vary and often require planning several years in advance.

Establishing a structured financial plan

Financial planning is the cornerstone of a successful early‑retirement project. It enables you to:

• analyse your current situation,

• define personal objectives,

• compare different retirement scenarios,

• identify opportunities and risks.

This structured approach provides a clear and realistic overview of the short‑ and long‑term financial consequences of retiring early.

Making the most of pension planning levers 

Occupational pension provision (2^nd pillar) and private pension solutions (3^rd pillar) can play a decisive role in achieving early retirement.

Well‑considered choices, aligned with your personal circumstances and objectives, can help secure your standard of living and offset some of the effects of early withdrawal.