Save for retirement with pillar 3a

You can withdraw money from pillar 3a up to five years before reaching AHV retirement age. However, taxes fall due when the savings are disbursed. The taxes increase progressively according to the amount disbursed.

If you have a second or even a third retirement savings account, you can withdraw your money in staggered amounts over several years. This lets you significantly reduce your tax burden.

A rule of thumb: if you’ve saved 50,000 francs in one retirement savings account, you should open a second retirement savings account.

Pillar 1

If you are not employed in Switzerland, you’re no longer covered by mandatory insurance. Accordingly, you also no longer pay any contributions. However, you’ll receive benefits in accordance with the contributions made and the number of years that you contributed. When you retire, or in case of invalidity or death, you’ll receive a reduced pension from AHV/IV.

Pillar 2

If you stop working in Switzerland, you lose the connection to a pension fund. Instead, the money must be transferred to a vested benefits account and will remain there until you take up a job in Switzerland again.

If you leave Switzerland permanently and move to a country outside the EU/EFTA, you can entirely withdraw the pension fund capital or park your money in a vested benefits account.

Pillar 3

If you leave Switzerland permanently, you can withdraw your savings from the restricted pension provision 3a without restriction.

The benefits from AHV and pension funds are not enough for the lifestyle you are used to. That’s why it’s so important you start making additional savings early.

Not only will payments into pillar 3a save on taxes, but you’ll also have more time to build up your savings. Saving even small amounts pays off.

Sample calculation: if you pay CHF 100 every month into a retirement account, you’ll have saved up roughly CHF 50,000 after 40 years, including interest.