Working at AHV age: When is it financially worthwhile?

Working in retirement age: This has been a reality for Maurizio Fedi for almost four years. He worked as a fitter at Burckhardt Compression in Winterthur for 25 years, including 20 years as a team leader. His team built large compressors, those that are used for oil production or gas transport, for example on large tankers. Then her 65th birthday slowly approached. “Although I always enjoyed working, I was happy,” says the now 68-year-old.

Use only in bottlenecks

 

However, his boss unexpectedly asked whether he wanted to continue – with a retirement contract. “I was hesitant at first and thought, ‘then I have to’ again, I don’t really want to do that.” Nevertheless, the offer appealed to him. After a short period of deliberation, he told his boss that he wanted and could work a maximum of two days a week, but only if there was actual work. He doesn’t want to sit through hours, but he does want the opportunity to say no if the time isn’t right.

The boss agreed to the terms; Fedi and Burckhardt Compression found each other. Since then, the pensioner has stepped in when needed.

This is a win for both sides. Burckhardt Compression has a pool of retired employees with whom the company can flexibly handle peak orders, with employees who know the company well. The retirees, in turn, earn a bonus without being subject to the previous constraints.

“It’s a nice, collegial atmosphere,” says Fedi. He always looks forward to seeing his old colleagues again. His successor, the new boss, gives him work that he can do well despite his knee problems. He often introduces new employees to the company. He can pass on his many years of knowledge.

In 2022, Fedi worked four days almost every month, in 2023 it was less. The company has now increased its staff and there have been fewer bottlenecks. For Fedi it’s true. “I’m not bored at home, and I can’t earn too much anyway, otherwise I’ll be in a higher tax bracket.”

Both sides have to win

There aren’t many companies offering such models yet, but there are more and more. In addition to pensioner pools, companies are experimenting with partial retirement or partial retirement. There are also platforms such as www.seniorsatwork.ch, www.arbeitsrentner.ch, www.rentarentner.ch and www. rentnerpower.ch job offers especially for seniors. If you don’t want to or can’t stay with your old employer and are more interested in limited assignments, you can also register with temporary work brokers.

The AHV 21 reform, which was adopted in 2022 and applies from 2024, makes retirement more flexible. Individual wishes and needs can be taken into account more easily. The disadvantage: It becomes more complicated. Anyone who deviates from the mainstream needs to think more carefully about the consequences.

When is it worth working in retirement age and what should you pay attention to?

Motivation: For many people, their job is an important part of their identity. You can use your skills and pass on your own experience to younger colleagues. Many people like social interaction and a task that, in addition to being strenuous, is often enjoyable.

Lohn: In addition to the joy of the job, the pay also plays an important role. Anyone who has a small pension may be dependent on additional income or at least be able to use it. The budget is often tight, especially for divorced women, but men can also lose a lot of retirement assets due to a divorce and the division of the pension fund.

Part-time: Those who have reached retirement age often no longer want to be fully involved in the employment process. The vast majority prefer part-time work. Performance decreases with age and health becomes more important. Many people are becoming increasingly aware that life is not meant to last forever. The opportunities to do more for your own health increase when you no longer have to work every day. Many older people want to take advantage of this freedom.

Consider the employer’s interest: Anyone who wants or needs to continue working in old age should not only consider their own needs, but also consider what will benefit the company. Ultimately, an employment relationship is only sustainable if both sides benefit. Anyone – like Maurizio Fedi – who can live with a certain degree of irregularity or even appreciates it can have an advantage over younger employees who rely on a regular income.

Tailor-made model at Migros

 

Ulrich Brunner also postponed retirement – but differently. He would actually have retired from Migros Lucerne at the end of November at the age of 64. Since December, Brunner has been working 80 percent of the time instead (“I’ve downshifted a gear”). “My wife won’t be retiring until next summer, I’m healthy and getting along well,” says Brunner.

Brunner thought that he could definitely continue working; after all, he liked the work, he felt comfortable in a team, and he didn’t want to sit at home alone. “And just like they said, they still need me,” he adds with some pride and joy. He chose the “final point” of the end of February 2025 because it would be disadvantageous if he and his wife retired in the same year due to tax progression.

Basically, the retailer pays close attention to the wishes and needs of employees when they retire. There is a flexible retirement age of 58 to 70 years. If an employee is approaching the current regular Migros retirement age of 64, the supervisor will discuss with the employee whether the employee is interested in late retirement.

Be aware of the consequences for taxes and pension provision

Brunner’s arrangement shows how important the tax considerations and consequences are when you are no longer firmly integrated into working life, but can decide more freely about your work commitment. The same applies to retirement planning.

Steer: Anyone who receives a pension and a salary must pay tax on both. Depending on the situation, this can result in a higher tax progression. An individual calculation is recommended here.

Monkey: The AHV 21 reform allows a more individual transition to retirement. It is now possible to only receive a partial pension and receive more money later. An earlier or later withdrawal leads to reductions or increases in the pension amount.

Occupational pension provision: The pension funds in the occupational provision (second pillar) have a lot of leeway in allowing an individually chosen retirement age. With the AHV 21 reform, this will become even more standard than before. All pension funds must now offer early retirement from the age of 63 and a deferral until the age of 70. They are also obliged to make partial retirement possible. The earlier you draw your pension, the lower it will usually be.

If you receive all of your retirement benefits when you reach the reference age, you are no longer actively insured and can no longer continue to pay into your employer’s pension fund. However, if you start a new job at AHV age, joining the pension fund is no longer necessary, but is generally possible if the employee wishes.

Third pillar – private pension provision: If you continue to work, you can postpone your Pillar 3a withdrawal and continue paying in – until you are 70 at the latest. Without pension fund contributions, employees can pay 20 percent of their income into Pillar 3a up to a maximum amount of 35,280 francs.

Everyone has to make their own calculations

As important as mathematics or the logic of money is when working at AHV age, in the end everyone has to make their own calculations, and this can look different for each individual depending on their wishes and needs.

“I enjoy the work, I like exchanging ideas with other people and being able to pass on my knowledge,” says Silvia Müller, who works full-time in the People & Organization department at Novartis despite being of AHV age. For the HR specialist, this means that in addition to her salary, she also receives the AHV pension. “I didn’t want to postpone and save up, I’ve been paying in all my life, now I want to get something too.”

 

Whether it is worthwhile to remain employed after retirement age depends on many factors. These include health, how much you enjoy your job or work and your own financial situation.

Müller, however, is waiting to pay out the second pillar. The fact that she continues to pay AHV contributions without acquiring additional entitlements does not bother her. “This is a solidarity contribution, I have already benefited from solidarity.” Tax progression was not an issue for Müller. «I never calculated whether I would slide into a higher progression level or not. That was not a relevant factor in my decision.”

Better financing of retirement provision

The shortage of skilled workers means that companies are increasingly happy if they can continue to employ experienced employees, be it sporadically or regularly. In addition, many people aged 65 or 70 feel much younger and fitter today than they did thirty years ago. The life phase of healthy old age has lengthened.

In addition, retirement provision is coming under increasing pressure as life expectancy increases. In order to finance them sustainably, it is urgently necessary for society to focus much more on late rather than early retirement in the future.