{"id":2843,"date":"2025-08-06T13:16:42","date_gmt":"2025-08-06T13:16:42","guid":{"rendered":"https:\/\/invexa.ch\/?p=2843"},"modified":"2025-12-04T07:14:55","modified_gmt":"2025-12-04T07:14:55","slug":"lpp-a-la-retraite-faut-il-choisir-la-rente-ou-le-capital","status":"publish","type":"post","link":"https:\/\/invexa.ch\/en\/pension\/2nd-pillar-retirement-pension-or-lump-sum\/","title":{"rendered":"2nd Pillar at Retirement: Should You Choose a Pension or a Lump Sum?"},"content":{"rendered":"
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What does the BVG provide for retirement?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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By default, the BVG (2nd pillar)<\/a> provides for the payment of retirement savings in the form of life annuity<\/a>. However, it is possible to withdraw at least 1\/4<\/strong> of the mandatory portion<\/strong> in a lump-sum, provided this is requested in advance and with the spouse's agreement. Some pension funds go even further, allowing a full lump-sum withdrawal or a mixed solution. The choice is irrevocable<\/strong> and must be carefully considered.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Option 1: LPP pension<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Choosing the annuity means receiving a guaranteed lifetime income<\/strong>, paid monthly starting at retirement.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Key benefits of annuities<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Choosing the LPP annuity means receiving a guaranteed monthly income for life. This payment, provided by the pension fund, is independent of financial markets and your actual life expectancy. It is therefore a particularly reassuring<\/strong> solution for those who live a long life, as the amount remains stable and consistent regardless of age. In addition, the current conversion rate (6.8%) makes the annuity more attractive than a lump-sum withdrawal in many cases.<\/p>

The annuity also provides continued protection for loved ones. In the event of death, a survivor\u2019s pension is generally paid to the spouse or registered partner, amounting to 60%<\/strong> of the initial annuity. Children under the age of 18, or up to 25 if still in education, are entitled to an orphan\u2019s pension<\/strong> or a retiree\u2019s child pension<\/strong> equivalent to 20%<\/strong> of the annuity.<\/p>

Finally, this option requires no financial management<\/strong> on your part. Everything is handled by the pension institution, making it an ideal solution for those who wish to avoid the uncertainties associated with investments or managing a lump sum.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Disadvantages of annuities<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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While the LPP annuity offers a certain level of security, it also comes with several limitations that must be clearly understood before making a decision. The main drawback is that in the event of death<\/strong>, the remaining capital is generally not passed on<\/strong> to heirs. Only survivor benefits (spouse\u2019s or orphans\u2019 pensions) are paid, and only if the legal conditions are met. In other words, if you pass away without a spouse or underage children, your retirement savings remain with the pension fund.<\/p>

From a tax perspective, the annuity is 100% taxable<\/strong> as income<\/strong>, which can result in a significant tax burden depending on the canton and your overall income level.<\/p>

Finally, the annuity offers you no flexibility<\/strong>. You cannot adjust the amounts according to your needs, nor make early withdrawals. You are tied to a fixed payment, the amount of which is determined once and for all at retirement, based on your conversion rate and accumulated assets.<\/p>

This lack of leeway can be a disadvantage if you have other projects to finance, if you want to help your loved ones during your lifetime, or if you have a shorter-than-average life expectancy.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The BVG pension at a glance<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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  • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/i>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tMonthly income guaranteed for life<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
  • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/i>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tOrphan's pension \/ pensioner's child (20 % per child up to age 18\/25)<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
  • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/i>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tNo need to manage capital or investments<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
  • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/i>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tStable, simple and predictable<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
  • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/i>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tHigh conversion rate equivalent to a guaranteed return higher than most safe investments<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t<\/ul>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t
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