The Lucerne University of Applied Sciences and Arts (HSLU) has published a study highlighting the growing financial shortfall Swiss retirees face due to increasing life expectancies.

The study highlights how longer retirements can widen the gap between AHV and occupational pension income and living expenses, particularly as the retirement phase can now last over 25 years.

The expanding retirement window

Since the introduction of the AHV in 1948, the average retirement duration in Switzerland has lengthened significantly.

A 65-year-old woman today can expect about 23 more years of life, up from 14 years. Men have seen their post-retirement life expectancy rise from 12 years to over 20.

According to the IFZ Longevity Study 2026, half of women who are 65 today will reach the age of 90, and half of men will reach 87.

The study modelled various income scenarios to demonstrate the impact of extended lifespans without accounting for private wealth or voluntary pension contributions.

“A significant proportion of 65-year-olds today have a realistic chance of living well beyond the average life expectancy, which can become a financial problem,”

said Professor Anina Hille, financial expert at HSLU’s Institute for Financial Services Zug and author of the study.

Bridging the retirement shortfall

For a person with an average income, living to 90 instead of 85 increases the cumulative gap between pension income and living expenses by around 25%.

If that individual lives to 100, the funding shortfall grows by 80%, underscoring the need for early wealth accumulation and stronger retirement planning.

“Even just a few additional years of life can significantly increase the need for additional capital,”

Hille said.

“Financial resilience does not begin only at retirement but is built up over the course of a person’s entire life.”

The research notes that longer lives do not guarantee healthy years, with rising healthcare and housing costs in later life compounding the financial strain.

The authors position this demographic shift as a primary driver for the financial sector, noting that longevity is evolving from a personal finance challenge into a distinct investment theme for financial services providers, investors and companies developing longevity-related solutions.

Featured image credit: Edited by Fintech News Switzerland, based on image by Frolopiaton Palm via Magnific