Investing your pension fund capital in Switzerland: How to invest your lump-sum withdrawal
Have you already withdrawn your pension fund capital, or are you about to? Then there is one important question to answer: how should you invest the money so that it continues to support you throughout retirement?
The key points at a glance
Leaving your pension fund capital in a savings account can reduce its purchasing power over time. At the same time, you probably do not want to invest money in the stock market if you are likely to need it within the next few years.
That is why your pension fund capital needs one thing above all: a plan that connects your investments with your future withdrawals.
Before investing your pension fund capital, you should first work out how much of it you will need and when.
A possible approach:
- Calculate your monthly income gap in retirement.
- Keep enough cash available for short-term expenses.
- Invest the portion you will not need for the longer term in a broadly diversified portfolio.
- Plan your future withdrawals alongside your investment strategy.
- Take taxes, fees and potential market fluctuations into account.
In short: your pension fund capital does not simply need a portfolio. It needs an investment and withdrawal plan.
What should you do with your pension fund capital after withdrawing it?
If you choose to withdraw all or part of your pension fund capital when you retire, you may suddenly receive several hundred thousand francs at once.
There are several things you can then do with the money:
- keep it in a savings account
- invest part of the capital
- reduce your mortgage
- invest in property
- gradually draw down the capital
- combine several of these options
Which approach makes sense depends on more than just your age or your willingness to take risk.
What really matters is your overall financial situation.
How much do you receive from AHV and other pension income? How much do you spend each month? What other assets do you have? Are there any major expenses coming up? And how much money will you need to withdraw from your assets on a regular basis?
Only once these questions are answered can you make a sensible decision about how much of your pension fund capital should be invested.
Prefer listening to reading?
In this video (german only, english subtitles), Patrik Schär, CEO of Selma Finance and CFA, walks you through the key decisions around retirement in Switzerland — from choosing between a pension and a lump-sum withdrawal to finding the right investment strategy, setting up a withdrawal plan and using Selma’s Retirement Mode.
He is joined by Dr Stefan Jaecklin, investor and Selma board member, who is approaching retirement himself. He shares a practical perspective and his own first-hand experience.
Investing your pension fund capital: What really matters
Once you retire, the role of your wealth changes.
It is no longer only about building as much capital as possible. Your money now needs to remain accessible, help cover your living costs and ideally last for the long term.
Finding the right balance between security and returns
Money you expect to need soon should generally be exposed to less risk than money you will not need for another ten or twenty years.
That is why it can make sense to keep part of your assets in cash while investing the portion you can leave untouched for longer in a broadly diversified portfolio.
There is no single percentage split that works for everyone.
Someone who needs to withdraw CHF 1,000 per month from their assets requires a different plan from someone who needs CHF 4,000 per month.
Do not underestimate inflation
Money sitting in a bank account is not entirely risk-free either.
If prices continue to rise over time, the same amount of money will buy less and less. Over an investment horizon of 20 or 30 years, inflation can therefore have a significant impact on your purchasing power.
Investing part of your capital for the long term can help offset this risk.
Plan your investments and withdrawals together
Even a well-constructed portfolio can come under pressure if you are forced to sell large amounts at the wrong time.
That is why you should already know, when setting up your investment strategy:
How much do you want to withdraw regularly, and which part of your assets should those withdrawals come from?
This is where investment planning and withdrawal planning come together.
Step-by-step guide: How to invest your pension fund capital
If you want to invest your pension fund capital sensibly, you need a clear plan.
A single poor decision can be difficult to reverse and may affect your finances for decades.
These five steps can help you take a structured approach.
Step 1: Get an overview of your finances
Before thinking about ETFs, shares or bonds, you should understand your monthly income gap.
Start by comparing your regular income with your expenses.
Your income might include:
- AHV
- other pensions
- your partner’s income
- rental income
- other regular income
Your expenses might include:
- housing
- health insurance
- taxes
- food
- leisure and travel
- transport
- healthcare costs
- larger planned purchases
An example
Your monthly expenses are CHF 7,000.
You receive CHF 4,500 from AHV, pensions and other sources of income.
Your monthly shortfall is therefore:
CHF 7,000 – CHF 4,500 = CHF 2,500 per month
At least part of this CHF 2,500 will need to come from your assets.
That gives you one of the most important figures for your retirement planning.
💡 Tip
It is better to plan slightly conservatively than too optimistically. Small underestimations can quickly add up to tens of thousands of francs over 20 years.
Step 2: Work out how much cash you need
Next, consider how much money you want to keep readily available.
Let’s say you need CHF 2,500 per month from your assets and want to keep three years’ worth of withdrawals in cash:
CHF 2,500 × 12 × 3 = CHF 90,000
This amount could serve as your cash reserve.
The advantage is that if the stock market temporarily falls, you do not immediately have to sell investments to cover your day-to-day expenses.
One way of structuring your assets is the three-bucket approach:
Bucket 1 – short term: Cash for regular withdrawals and unexpected expenses.
Bucket 2 – medium term: More defensively invested assets that can later be used, for example, to replenish your cash reserve.
Bucket 3 – long term: Broadly diversified assets with a longer investment horizon.
💡 Keep in mind
The three-bucket approach is not a requirement. The important principle behind it is that money with different time horizons does not need to be invested in the same way.
Step 3: Invest the long-term portion of your pension capital
Once your short-term needs are covered, you can decide how to invest the portion of your wealth that you will not need for some time.
This could include broadly diversified investments across different asset classes, such as:
- shares
- bonds
- real estate investments
- other diversifying investments
ETFs can be a simple way of investing in many different securities at the same time.
The right mix for you depends, among other things, on:
- how long you are unlikely to need the money
- how much you expect to withdraw in the future
- what other assets you own
- how much your portfolio can fluctuate
- how much investment risk you personally feel comfortable taking
Your age alone does not determine how much investment risk is appropriate.
Once your short-term needs are covered, you can decide how to invest the portion of your wealth that you will not need for some time.
This could include broadly diversified investments across different asset classes, such as:
- shares
- bonds
- real estate investments
- other diversifying investments
ETFs can be a simple way of investing in many different securities at the same time.
The right mix for you depends, among other things, on:
- how long you are unlikely to need the money
- how much you expect to withdraw in the future
- what other assets you own
- how much your portfolio can fluctuate
- how much investment risk you personally feel comfortable taking
Your age alone does not determine how much investment risk is appropriate.
💡 Tip
In retirement, the goal is not to maximise returns at all costs. Stability becomes increasingly important — and the shorter your investment horizon, the more important a balanced, lower-risk strategy becomes.
Step 4: Plan your monthly withdrawals
A withdrawal plan works a little like creating your own pension.
You decide how much money should be transferred to your bank account on a regular basis, while the rest of your assets remain invested.
This means you do not have to decide every month which investments to sell.
One commonly used guideline for withdrawals is the 4% rule.
In simplified terms, it assumes that around 4% of the original portfolio value is withdrawn in the first year.
For CHF 500,000, that would be approximately:
CHF 20,000 per year or CHF 1,667 per month
For CHF 800,000:
CHF 32,000 per year or CHF 2,667 per month
Important: the 4% rule is not a guarantee or a personal recommendation.
How much you can actually withdraw depends on your individual financial situation, your investment strategy, how long the withdrawals need to last and how markets develop.
You can use our wealth drawdown calculator to explore different scenarios.
💡 Tip
Not sure how much you can withdraw without running down your assets too quickly? Selma’s experts can help you work it out based on your personal situation.
Step 5: Take taxes and fees into account
Taxes and investment costs also affect how much of your wealth remains over the long term.
When you withdraw pension fund capital, a separate lump-sum withdrawal tax is initially charged.
After that, the money becomes part of your private assets.
For any investments you make afterwards, the following points are particularly relevant:
- Interest and dividends are generally taxable income.
- Private capital gains on securities are generally tax-free in Switzerland, provided you are not classified as a professional securities trader for tax purposes.
- Your assets are subject to cantonal wealth tax.
- You should also compare the ongoing costs of your investments. Even small differences can have a noticeable impact over a long period.
Which provider is best for investing your pension fund capital?
You now know what matters when investing pension fund capital. The next step is choosing the right provider.
You should not look only at the management fee. Total costs, net returns and how well the provider fits your personal investment strategy are equally important.
In 2026, Swiss consumer magazine K-Geld compared leading banks and digital wealth managers. The comparison looked at factors including total costs, net returns and how assets developed over time.
The comparison shows that the provider you choose can make a considerable difference to your wealth over several years.
See the full comparison: Wealth managers vs banks in Switzerland 2026
Investing your pension fund capital with Selma
After withdrawing your pension fund capital, the challenge is not simply deciding how to invest it.
You also need to decide how much money to keep available and how you want to make regular withdrawals later on.
With Retirement Mode, Selma creates a personal investment and withdrawal plan based on your financial situation, your goals and your risk profile.
Your investments are then managed continuously and adjusted when needed.
This includes:
- a personal investment strategy
- planning your cash reserve
- flexible regular withdrawals
- automatic portfolio adjustments
- personal support from experts
Want to find the right retirement plan for your money?
Book a free consultation with us. We will show you how to structure your capital so that it can support you over the long term.
Niklas Linser
Niklas is taking care of Selma's digital marketing channels. He is an expert in communication, holds a degree in international economics and is way too passionate about. 🎾
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