Because the case is clear, we don’t waste time: Yes, pillar 3a is worthwhile. The reason is simple: Payments into Pillar 3a can be deducted from taxable income in your tax return. In this way, part of the Pillar 3a payment is practically self-financed by the tax savings (risk-free return).
In addition, pension assets do not have to be declared in the tax return. You save wealth tax year after year and income tax on income such as interest or dividends.
Reduced tax at the time of withdrawal
Although a tax is payable on the withdrawal, it is a reduced tax. It is less than the standard income tax. Therefore, you save more tax with the deposit than you pay at the time of withdrawal. A few examples of calculations:
|10 years||Income Tax|
|Deposit 2020–2029 each CHF 6’826||Tax saved: CHF 18’780|
|Withdrawal 2030 (CHF 68’260)||Tax paid: CHF 3’317|
|Total tax savings||CHF 15’463|
|20 years||Income Tax|
|Deposit 2020–2039 each CHF 6’826||Tax saved: CHF 37’560|
|Withdrawal 2040 (CHF 136’520)||Tax paid: CHF 7’462|
|Total tax savings||CHF 30’098|
|30 years||Income Tax|
|Deposit 2020–2049 each CHF 6’826||Tax saved: CHF 56’340|
|Withdrawal 2050 (CHF 204’780)||Tax paid: CHF 12’569|
|Total tax savings||CHF 43’771|
|40 years||Income Tax|
|Deposit 2020–2059 each CHF 6’826||Tax saved: CHF 75’120|
|Withdrawal 2060 (CHF 273’040)||Tax paid: CHF 21’105|
|Total tax savings||CHF 54’015|
Single, reformed, no children, City of Zurich, CHF 100,000 income, withdrawal not in the same year as the withdrawal of the pension fund assets
Several 3a accounts for a staggered withdrawal
Since the tax is progressive when it comes to payout, it is worthwhile to accumulate several 3a accounts and withdraw them in stages. This will further reduce the tax on withdrawals of 3a assets.
Withdrawal before retirement only possible in exceptional cases
Money that is paid into the pillar 3a scheme is generally tied up until retirement. In the following situations, 3a assets can still be withdrawn if you:
- build of purchase a property,
- become self-employed (as a sole proprietorshop without GmbH or AG) or
Long investment horizon must be exploited
Since pillar 3a assets can generally only be withdrawn upon retirement, most 3a savers have an exceptionally long investment horizon. A long investment horizon allows a security solutions with equities. A crisis can be passed up and temporary losses do not have to be realized.
Pillar 3b is not tax deductible
Here and there one also encounters the concept of pillar 3b. However, pillar 3b is nothing other than free saving with free assets. Pillar 3b insurance policies are also ordinary insurance policies. They have neither tax advantages nor a statutory pension character. Accordingly, such assets and the income from them must be declared in the tax return.
written on 29.04.2020