Bitcoin Retirement: Tax-Optimised Withdrawals

Short answer: How much you withdraw in retirement is decided by your withdrawal rule. Which coins you sell to fund it decides the tax. In Germany you sell only coins older than one year, and that is tax-free. In Austria you separate tax-free old holdings from new holdings that carry 27.5 % KESt. In Switzerland private capital gains are tax-free, but you pay wealth tax and must make sure you are not treated as a professional trader.

This article is not tax advice. It shows how the rules (as of November 2026) affect a Bitcoin retirement and works through a plan with example figures. For your own case, have the numbers confirmed by a tax adviser.

Two questions: how much and which coins

A Bitcoin retirement has two separate questions. The first: how many euros or francs do you withdraw per year? Your withdrawal rule answers that, for example the 4% rule with Bitcoin together with a buffer for bear markets. What else it takes to live off Bitcoin is covered in Living off Bitcoin.

The second question is the subject here: from which holding, from which account and in which order do you sell? Two retirees with the same amount of bitcoin and the same withdrawal can pay very different amounts of tax. The difference lies only in which coins they sell.

The basic rule applies in all three countries: you only pay tax on coins you sell. Holding, moving between your own wallets and pledging as collateral are not sales. Every payment with bitcoin, on the other hand, is.

Germany: sell only old coins

In Germany a sale is tax-free if you have held the coins for more than one year (§ 23 EStG). Bought on 15 March 2025, sold tax-free from 16 March 2026. Anyone who has saved for years can therefore take their entire retirement income tax-free. The skill is not to sell young coins by accident.

FIFO applies per wallet

The Federal Ministry of Finance says: if it cannot be determined which coins you sell, the first bought count as the first sold (FIFO). This applies per wallet or exchange account separately. If your exchange account only holds coins from the last few months of your savings plan, you are selling young coins there, even if your hardware wallet holds coins from 2017.

That leads to the simplest practice:

1. Keep your old holdings in a wallet of their own.
2. For each withdrawal, send the amount you need to an exchange account that holds no young coins.
3. Sell there and note the transaction ID, date and amount. That way you can later show where the coins came from.

How FIFO and the average price work in detail is explained in Bitcoin taxes in Germany.

The 1’000 € exemption threshold

If you need money before young coins are one year old, the exemption threshold helps. If your total gain from private sales in a year is below 1’000 €, it is tax-free. This covers all such sales together, including gold or other crypto assets. Married couples each have their own threshold.

But it is a threshold, not an allowance. At 1’000 € of gain or more, the whole gain is taxable, not just the part above it.

Losses and borrowing

If young coins are at a loss, you can realise the loss by selling. It is offset against other gains from private sales, including those of earlier or later years. For coins held over a year, a loss does not count.

In Germany a Bitcoin loan saves no tax on old coins, because selling them is tax-free anyway. At most it can bridge the time until young coins are one year old. If the loan is liquidated, that is a sale.

Austria: sell old holdings last

In Austria the purchase date matters. Coins you bought up to 28 February 2021 are old holdings (Altbestand). They are all more than a year old today and therefore tax-free. Coins from 1 March 2021 are new holdings (Neubestand): the gain carries 27.5 % KESt, however long you hold them. You calculate the gain with the moving average price per wallet.

If both holdings sit in the same wallet, you may choose which you sell. If you don't choose, the old holdings go first. For a retirement that is usually the wrong order.

Why new holdings first

Your old holdings are your most valuable asset: every future price gain on them stays tax-free. On new holdings, every future price gain costs you 27.5 %. If you sell new holdings first, you pay some tax today but keep the coins whose growth costs nothing.

So the rule is: if you believe Bitcoin will rise over your retirement years, sell new holdings first. This applies especially to new holdings close to their purchase price or at a loss, because then the sale costs hardly any tax. And keep the purchase records for your old holdings ready, otherwise a provider will treat them as new holdings.

Losses, standard taxation and loans

Losses from new holdings can only be offset in the same year against other capital income, such as share gains. Whatever is left over is lost. So sell new holdings at a loss in a year in which you also have gains.

If your other income in retirement is low, the option for standard taxation (Regelbesteuerungsoption) can help: on application in your tax return, your capital income is taxed at your personal rate instead of 27.5 %. It only pays off with a small total income and applies to all capital income of the year. Have it calculated.

In Austria a loan against bitcoin really does save tax, because you don't have to sell new holdings. That holds as long as it is not liquidated. More on old holdings, average price and KESt withheld by providers in Bitcoin taxes in Austria.

Switzerland: tax-free as long as you stay private

In Switzerland, capital gains on private assets are tax-free. What you withdraw in retirement therefore costs no income tax. Two things still cost money.

Wealth tax belongs to the withdrawal

Your bitcoin holdings count as wealth. They are valued at the ESTV price on 31 December. Depending on canton and wealth, the tax is usually between about 0.1 and 1 % per year.

Include it in your withdrawal. If you withdraw 4 % and pay 0.3 % wealth tax, your holdings shrink by 4.3 % a year. Selling before 31 December saves nothing: francs in your account count as wealth just the same.

The risk: being classed as a trader

The ESTV names five criteria under which it assumes private asset management for certain. For retirees, three of them matter:

• Holding period: sell only coins that are at least six months old.
• Gains below 50 % of net income: with coins held for a long time, almost every franc sold is gain. Anyone living only off bitcoin easily misses this criterion.
• No purchases on credit: a loan to buy bitcoin is the strongest indication of trading. A loan against bitcoin that pays for your daily life is something else.

Missing one criterion does not make you a trader automatically; the tax administration then assesses the individual case. Anyone who has held for years, trades little and uses no derivatives has good arguments. What this looks like with numbers is shown in professional securities trading with Bitcoin.

A withdrawal plan with numbers: Anna in Germany

Anna is 63 and retiring. Alongside her state pension, she wants to withdraw bitcoin under the 4% rule. Assumed price: 60’000 € per BTC.

Tax-free sales after more than one year do not go into Anlage SO of the tax return. Anna keeps the records anyway: purchase evidence, wallet transactions and exchange statements. Since 2026, providers in the EU report transactions to the tax authorities, and the bank asks where larger incoming payments come from.

If the price falls sharply, nothing changes for tax, but the amount of bitcoin sold does. That is when the cash buffer described in the 4% rule comes in. Anna fills the buffer in good years with tax-free sales of old coins.

The order at a glance

Calculate your withdrawal

Use the calculator to check how long your holdings last at your withdrawal. In Austria, plan the KESt on new holdings, and in Switzerland the wealth tax, as an extra expense.