Getting married: what are the pros and cons?

Agreeing to tie the knot also means agreeing to the new rules on taxes, AHV/AVS and pension provisions. What is changing in terms of finances? Where are there risks and opportunities? We provide a helpful overview – for a financially self-determined future together.

What’s changing...

A wedding is a significant milestone in the lives of two people. Agreeing to tie the knot involves making some changes:

Married couples are better protected in the event of death and are entitled to AHV/AVS, pension fund and pillar 3a survivors’ benefits, as well as a legally stipulated inheritance entitlement, which in principle is not subject to inheritance tax.
With married couples, the financially less-well-off spouse is in a better position, as the income earned during the marriage is split (shared).
The disadvantages of getting married include usually higher taxes and lower AHV/AVS pensions in old age as they are capped (150% maximum AHV/AVS pension).

A newly married couple leaves the registry office via a stone staircase. The bride wears a white lace dress and holds a bouquet of pink roses in her hand. She has long, curly blonde hair with a white veil. They are both smiling at each other and holding hands as they walk down the stairs. The architecture of the building in the background looks classical with bright pillars and large windows.

Arrange a consultation

Should I get married? We show you the advantages and disadvantages – and provide you with personal and transparent advice.

Obtain advice now

Advantages of marriage

Death benefits

Should the worst happen, married couples are better protected. If one of the couple dies, the surviving spouse generally receives benefits via state, occupational and, if available, private pensions. Cohabiting couples are not automatically entitled to these benefits.

The surviving spouse receives survivors’ benefits from the 1st pillar (AHV/AVS) in accordance with legal requirements. A survivors’ pension or lump-sum settlement is paid out from the 2nd pillar (occupational pension). This depends on the pension fund regulations.

In the 3rd pillar, the surviving spouse also benefits financially from pillar 3a (tax-qualified provisions). In the event of death, the surviving spouse becomes the first beneficiary.

Unmarried couples are less protected in the event of death. They receive nothing from the 1st pillar, and what they receive from the 2nd pillar depends on the pension fund regulations. In the case of pillar 3a, the cohabiting partner is only a beneficiary if the common-law partnership is “qualified”. “Qualified” means that the couple has lived in a marriage-like relationship for more than five years or has a child together.

Have you already arranged with your pension fund whether your cohabiting partner is the beneficiary if the worst happens? For many pension funds, this is only possible after living together for five years – you need to clarify in good time whether your pension fund allows this.

Ramon Stadelmann Swiss Life pensions advisor

Legal inheritance entitlement and in principle no inheritance tax

In Switzerland, married couples are also at an advantage when it comes to inheritance tax. Depending on the canton, inheritance and gift taxes are considerably lower, with the surviving spouse even being exempt from inheritance tax as a rule. They also have a legal entitlement to inheritance.

Inheritance law does not provide for cohabiting couples; however, cohabiting partners may designate each other as heirs in their wills.

AHV/AVS splitting

AHV/AVS contributions are split during the marriage. This means that the income is divided during the period of marriage, with half being attributed to each spouse. While this increases the AHV/AVS pension of the person with the lower income, the person with the higher income has to accept a corresponding reduction.

There is no AHV/AVS splitting for cohabiting couples.

Pension fund splitting in the event of divorce

In the event of divorce the marital property is divided and the pension fund is split as well: each spouse receives half of the pension fund or vested benefits accumulated during the marriage.

For the higher-earning spouse, this means a reduction in pension plan savings – but to the benefit of the lower-earning spouse.

The situation is different in common-law partnerships. If the couple separates, there is no division of property and neither the 1st nor 2nd pillar is split.

Disadvantages of marriage

Taxes

In most cases, married couples pay higher taxes because – unlike cohabiting couples – they are taxed jointly. Although married couples enjoy a more favourable tax rate, the income of both is pooled, leading to higher progressive taxation.

If only one person in a married couple has a high income, this works out financially. The situation is different if both spouses are high earners. They will pay considerably more tax as they are subject to highly progressive taxation. In fact, if married couples pay over 10% more direct federal tax, this is described as a “marriage penalty”.

Reduced AHV/AVS pension

As soon as the second spouse reaches normal retirement age, the two individual pensions of the married couple are limited, or “capped”, to a maximum of 150% of the maximum AHV/AVS pension. The two individual pensions are not reduced in this way for unmarried couples. In absolute figures, this means that couples joined in matrimony receive a maximum of CHF 45 360, while cohabiting couples can draw up to CHF 60 480.

A bridal bouquet of delicate pink roses lies on an iron railing. The flowers are fully in bloom. The close-up brings out the details of the rose petals.

If you want to draw the full state pension, make sure you avoid contribution gaps.

Ramon Stadelmann Swiss Life pensions advisor

Costs in the event of divorce

Getting a divorce can be very costly, especially for families with children. The financial consequences of a divorce can lead to disputes, which may involve substantial legal fees.