Taking your occupational pension savings as a lump sum or as a pension has different tax consequences, in different years and over different periods. The decision is generally irreversible, and several pension institutions require long advance notice.
Is added to your other income and taxed with it, every year, at ordinary rates, for as long as you receive it.
A lump sum
Is taxed once, in the year it is paid, separately from other income and at a reduced rate: at federal level, one fifth of the ordinary scale; each canton applies its own rule. The rates and their progressivity vary by canton and commune.
What matters is the total tax burden over time
A lower one-off tax can cost more than an annual tax spread over many years, or vice versa, depending on how long you expect to receive the pension, your other income, and your canton of residence when the payment is made.
A lump sum
taxed separately, as a full annual tax, at one fifth of the ordinary rate scale for federal direct tax (art. 38 LIFD) and for Geneva cantonal tax (art. 45 LIPP)Source: art. 38 LIFD, art. 11(3) LHID, art. 45 LIPP (Geneva) · checked on 27 September 2026
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What to prepare, and when
Several years ahead
Pension buy-ins are deductible from income, but a buy-in made too close to a lump-sum withdrawal forfeits the deduction, and the amount bought in can be added back.
three years: benefits resulting from a buy-in cannot be paid out as a lump sum before this period has expiredSource: art. 79b(3) LPP · checked on 27 September 2026
A few years ahead
Staggering. Withdrawing in several instalments across tax years reduces the progressive effect, but cantons regulate the practice and some add together payments made in the same period.
The year before
The notice your pension institution requires under its own rules, and a check of what those rules actually allow: not every institution permits a full withdrawal.
Early or deferred retirement
Which changes the amounts in both pillars and should be decided well in advance.
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What we do
We calculate both options
For your situation, your canton and your time horizon. You see the difference, year by year and in total.
We check what your pension institution's regulations allow
Which is sometimes enough to settle the question.
We check the buy-ins already made
And their effect on a lump-sum withdrawal.
We help you put the difference in perspective
When the difference between the two options is small, the choice is mainly a matter of personal preference.
