Pillar 3a: two accounts are better than one

A pillar 3a account is a central part of retirement planning. It offers numerous advantages: you can increase your pension, withdraw capital in advance to purchase your own home, and deduct the contributions from your taxable income. But what many don’t know: two or more 3a accounts are better than one.

Once your pension savings exceed roughly 50,000 Swiss francs, you should consider opening another pillar 3a account. The ideal number of pillar 3a accounts depends on your place of residence and your marital status. Multiple accounts mean you don’t have to withdraw all your savings all at once. Not only can you withdraw your capital more flexibly in several tranches during your retirement, but there are also tax benefits. As soon as you withdraw your pillar 3a savings, the money is taxed progressively, i.e., the higher the amount, the higher the tax rate. From a tax perspective, it may be worthwhile to withdraw your money in stages over several years from several 3a accounts.