You can make advance withdrawals from both the pension fund and the 3rd pillar for the purchase of your own home. This is within the framework of the Home Ownership Promotion Program (WEF).
Withdraw from the pension fund versus the 3rd pillar?
Arguments in favour of drawing pension fund benefits
The advantage of drawing from the pension fund is that you can bring the advance withdrawal back later and reclaim the tax paid. In contrast to the pension fund, you cannot reinvest pillar 3a money once it has been withdrawn into the 3rd pillar. The lump-sum withdrawal tax is definitive after an advance withdrawal from Pillar 3. In addition, you must pay tax on the money in your private assets from the time you withdraw it. The longer your investment horizon, the more tax you can save by repaying the advance withdrawal to the pension fund.
Arguments in favour of drawing on the 3rd pillar
The fact that you can no longer make voluntary purchases into the pension fund after an early withdrawal of pension fund assets speaks in favour of drawing Pillar 3 benefits. You can only make voluntary purchases again once you have repaid the advance withdrawal to the pension fund. If you want to make voluntary purchases in the years after the WEF withdrawal, we recommend that you withdraw the 3rd pillar instead of the pension fund.
Overview
| Withdrawal pension fund | Withdrawal 3rd pillar | |
| Long investment horizon | x | |
| Pension Fund-Purchases desired | x |
Check pension protection
When withdrawing money from the pension fund, we recommend that you have your pension protection checked. It is possible that your benefits for the risks of death and disability will be reduced by a withdrawal. At best, it makes sense to take out additional cover in this case. We recommend that you clarify this point with your pension institution.
Home ownership requires equity capital
Anyone who wants to buy residential property has to dig deep into their pockets. It is common to tap most savings in order to raise the necessary equity capital. If these are not sufficient, pension provision often comes into play as well. Pension assets can either be pledged or withdrawn in advance.