Well, its quite simple, pension income is ordinary income and taxed by IRS and you are correct that FEIE no longer applies. I have said in this or some other thread here on EF before, that retiring abroad and keeping US citizenship is financial suicide. As such, I have long made plans to avoid being in that situation when the day comes for retirement. I guess you did no advance research and planning, unfortunate in this day and age. Yes, you will be taxed by CH and IRS, certain things can be offset, others maybe not. Time to read the US-Swiss Tax Treaty or find yourself a tax advisor well versed in CH/US double taxation issues. Reading or joining ACA, https://www.americansabroad.org/ would be a good start in educating yourself and also finding a tax advisor.