Annuity or lump sum?

For people in Switzerland approaching retirement, choosing a lifetime annuity, a one-off, lump-sum payout or a combination of the two is a crucial issue. An analysis conducted by PUBLICA shows that more and more members are taking the lump-sum option: between 2013 and 2023, the proportion of those taking at least part of their retirement assets in that form rose from 33% to 57%. One particularly noticeable shift is in the proportion taking their entire retirement assets as a lump sum, which jumped from 6% to 20%.

In addition, those with relatively low levels of retirement assets draw proportionately more as a lump sum than those with medium and high levels. Men also tend to withdraw more of their retirement assets than women. Adjustments to the conversion rate and changes to make withdrawals simpler also seem to be boosting uptake. 

More than half of those surveyed for the study cited tax considerations as a key motive for a lump-sum withdrawal. Other reasons include implementing an individual investment strategy and needing financial resources to, for example, repay a mortgage; another is the conversion rate.

The study shows that advice has become an important part of the decision-making process, and that more and more people are seeking guidance about retirement. In addition, those who opt for a lump-sum withdrawal have been especially keen to seek outside guidance – an indication of the growing need for support when making this complex choice.