counselor
I’m only 25 and my life plan is still open: Does it make sense to pay into pillar 3a at such a young age?
I am 25 (f), single and have no family obligations. Why should I pay into the 3rd pillar at my age? My retirement age is still a long way away and my life plans aren’t all that clear yet. I would also like to use my savings as freely as possible and not block them in tied pension plans.
Livia Schnüriger.
At the time of your retirement – i.e. in around 40 years – the AHV as the 1st pillar together with the benefits of the pension fund (occupational pension provision, 2nd pillar) should still largely cover your basic needs. As a rule, retirement benefits from the first two pillars make up around 60 percent of professional income. However, if you would like to continue to enjoy your usual standard of living after you retire, you will have to rely on your private provision (Pillar 3a). The more capital you build up in the tied pillar 3a during your working life, the better the chances are that you will be able to afford the extras you are used to in your working life when you retire.
If you pay into the tied pillar 3a, you benefit from tax advantages: In 2024, employees with a pension fund connection can pay a maximum of 7,056 francs into the pillar 3a and deduct the entire amount of the payment from their taxable income. For employees without a pension fund, the maximum is 35,280 francs or 20% of net income. The pension capital of Pillar 3a and the income from it are not subject to income tax, wealth tax or withholding tax during the term of the contract. Extrapolated over 40 years, this results in really significant tax savings. The compound interest effect is also very advantageous over such a long investment horizon. If you invest your 3a capital in investment funds, you have additional opportunities for returns. When withdrawn, the 3a capital is also taxed at a reduced rate.
The capital in pillar 3a is “tied”, but…
Your 3a pension assets are “tied”, but can be withdrawn before retirement under certain conditions. An early withdrawal is possible, for example, when it comes to financing a home you use yourself (WEF advance withdrawal), which means you can help finance the purchase of an apartment or house you live in with your pension assets. You can also use the 3a capital to amortize a mortgage, for value-increasing or value-preserving investments in home ownership or for investments, for example in a housing cooperative (purchase of share certificates).
You can also receive the credit if you become self-employed. The capital you save becomes the starting capital for your self-employment. You are still entitled to pay into Pillar 3a. If you definitely leave Switzerland, you can also access your 3rd pillar balance.
* Livia Schnüriger
Managing Director of the Vested Benefits Foundation 2nd Pillar and the Savings 3a Pension Foundation of the Luzerner Kantonalbank in Lucerne; www.lukb.ch
2024-02-19 17:04:54
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