If you are asking yourself this question, you probably know that a staggered payout of retirement assets can be interesting from a tax perspective. But how many 3a accounts actually make sense?

In principle, you can open as many 3a accounts as you want. Many providers limit the number of accounts to a maximum of five. But if you choose several providers, there are practically no limits.

That’s why in this article we look at the question of how many 3a accounts make sense.

The answer to this question can be approached from two different directions. Either from the capital gains tax and the question from which amount this starts to increase. Or from the maximum number of years available to a 3a saver for staggering the pillar 3a.

1. At what amount does the tax start to increase when withdrawing from a 3a account?

We have analyzed the capital withdrawal tax of all cantons. We calculated how much tax is paid on capital withdrawals of 10,000 to 100,000 francs. Three groups emerged, which show a similar progression.

First group: Hardly any tax progression

These cantons have hardly any tax progression up to 100,000 francs for the withdrawal of pension assets. If you are not planning to move to another canton, splitting your assets between several accounts is not so important from a tax perspective in these cantons.

Despite this, even in these cantons it is not recommended to withdraw the 3rd pillar together with the 2nd pillar, but in two different tax years.

Second group: Relatively strong progression from the start

In this group of cantons, the capital withdrawal tax already increases relatively strongly for smaller amounts of CHF 10,000 to 20,000. In these cantons, it is therefore interesting to build up as many 3a accounts as possible in order to keep the tax as low as possible.

Third group: Increasingly progressive, but not from the start

In the third group, the tax does not increase from the beginning, but only from medium amounts around CHF 50,000. From these amounts onwards, it makes sense for these cantons to have several 3a accounts.

2. What is the maximum number of years over which pillar 3a withdrawals can be staggered?

In the previous chapter, we analyzed where multiple 3a accounts make the most sense. Now we would like to find out how many years are available for staggering.

Maximum number of years

The 3rd pillar can be withdrawn up to five years before reaching the normal retirement age.

Example: If the ordinary AHV retirement age is in 2030, you can withdraw pillar 3a in the following years:

  • 2025 (from date of birth to end of year)
  • 2026
  • 2027
  • 2028
  • 2029
  • 2030 (from the beginning of the year until the date of birth)

Thus, a maximum of six tax years is available.

If you continue to work beyond the normal retirement age, you also have the option of deferring your Pillar 3a withdrawal. This is for a maximum of five years:

  • 2031
  • 2032
  • 2033
  • 2034
  • 2035

In this case, therefore, there is a maximum of eleven years over which you can draw pillar 3a in stages.

Restriction for spouse

As long as the tax system in Switzerland is not changed to individual taxation, the pension withdrawals of spouses that occur in the same year are added together and taxed jointly.

For spouses and partners in registered partnerships, the reasonable number of 3a accounts is therefore halved to five and six respectively.

Restriction due to the withdrawal of the 2nd pillar

If the pension fund and a 3a account are drawn in the same year, the amounts are added together for tax purposes. If you want to avoid this, you do not withdraw from pillar 3a in the same year as you withdraw money from the second pillar.

This is relevant for anyone who wishes to withdraw all or part of their pension fund in lump-sum form. One year is omitted for the lump-sum withdrawal of the pension fund. For each vested benefits account, a further year.

Because practically every 3a saver has a pension fund, the sensible number of 3a accounts is reduced to a maximum of 10.

WEF advance withdrawal does not require allocation to several 3a accounts

Every five years, you can make an advance withdrawal from the 3rd pillar for home ownership (WEF advance withdrawal). However, this does not require several 3a accounts, because with the WEF advance withdrawal it is possible to withdraw only a partial amount of a credit balance on a 3a account.

With a WEF advance withdrawal, you can reduce the size of a 3a account. This can be interesting if you have been paying into the same account for too long or if it has increased in value significantly over the years thanks to investments in securities funds. You can then make an early withdrawal for home ownership and, for example, use 50% of the account to pay off the mortgage.

The disadvantage of this approach, however, is that you lose the tax advantages of the pension plan from the time of the WEF advance withdrawal.

Consider fees when closing 3a accounts.

As a rule, closing a 3a account costs nothing. However, if your provider charges closing fees, it is not worth keeping very small 3a accounts. For 10,000 francs, 100 francs is equivalent to a 1% fee, which is a little much.