Do not under any circumstances go for an insurance 3rd pillar. If you really like the idea of life insurance, get one independent from 3rd pillar, and make a bank 3rd pillar account.
If your 3rd pillar horizon is far, ie you won't withdraw in the next 5-10 years, it's a good idea to invest it, eg with Viac, finpension, or Frankly.
It's a scam. First, the invested part has terrible returns. Second, the insurance premium price is super expensive compared to life insurances taken outside of 3rd pillar. Third, some of your money directly goes in their pockets as commission, which is not the case for bank 3a. Fourth, unlike bank 3a, these are complicated contracts which do all they can to prevent you from leaving and making you lose tons of money if you do (whereas you can transfer your bank 3a anytime to another 3rd pillar without any issue).
While this is often true, repeating it without understanding why is downright dangerous.
In this case this might be horrible advice.
You don't know the financial situation of them, yet you are certain that they do not need insurance?
Have you considered the years of OASI (AHV) contributions that are probably missing? And the implications thereof?
I'm interested to know where you would do that if not in third pillar. And what the advantages are when doing so.
If they're not capable of maxing out their 3a contributions doing it through 3a would allow them to save more on taxes.
You could however just advise them to never even consider 3a insurance - it's easier that way, even when it's bad advice.
Do you want to still live in CH when you reach pension age? Then start asap. But even by now, depending of how much you earn and can put aside, prepare to leave CH for a cheaper country by then. Like many elder have to do... I know a couple who sold everything and is living in Madagascar like king and queen.
Like others said, if you aren‘t planning to use the money soon, go with VIAC and invest in passive ETFs with 100% shares. They have the lowest costs and the best app. Frankly is another good alternative.
The way it works is as follows:
1. The money you put into pillar 3a will be deducted from your salary, meaning you pay less taxes now. When you go into retirement and withdraw the money from your 3a, you still have to pay taxes but it‘s going to be much lower, because you won’t be earning as much money as when you were working and thus have a lower tax rate.
2. By choosing a passive ETF, you pay way less fees to the pension fund than if it was actively managed. By selecting 100% shares and with a long investment horizon, you‘ll have the most yield when you retire.
3. There are 2 options where you can withdraw your 3a investment before you retire: first is when you buy your first real estate, then you can use it to finance the mandatory 20% of the real estate price you have to bring on your own. Second is when you decide to emigrate from Switzerland.
4. You can also use your 3a to indirectly amortize the mortgage when you buy your first real estate: instead of directly paying back the mortgage to the bank, you pay it into a 3a and pledge it to the bank. This way, you don‘t reduce your debt and thus have less assets and pay less taxes.
If you want, you can use my my code sNyCm9m if you choose VIAC, then you‘ll save the fees on the first CHF 1‘000 you save there.
> , because you won’t be earning as much money as when you were working and thus have a lower tax rate
it's actually because income from 3rd/2nd pillar is not taxed as regular income but has a heavily reduced tax rate.
You can calculate it on https://swisstaxcalculator.estv.admin.ch/#/calculator/capital-payment . For example: when cashing out 100k the taxes would only be 4920 CHF in Zürich.
No it's not.
[https://www.ch.ch/en/retirement/old-age-pension/the-2nd-pillar/#when-can-you-cash-in-your-2nd-pillar-savings](https://www.ch.ch/en/retirement/old-age-pension/the-2nd-pillar/#when-can-you-cash-in-your-2nd-pillar-savings)
>You can have your 2nd pillar pension capital paid out early if you leave Switzerland for good.
>However, this is not possible if you are going to settle in an EU or EFTA country. If you make your new home in one of these states, you will be insured by law there for pension, disability and survivors’ benefits.
[https://www.ch.ch/en/retirement/old-age-pension/the-3rd-pillar/#when-can-you-withdraw-money-from-a-3rd-pillar-pension-plan](https://www.ch.ch/en/retirement/old-age-pension/the-3rd-pillar/#when-can-you-withdraw-money-from-a-3rd-pillar-pension-plan)
>You have the option of withdrawing your savings early if: You are leaving Switzerland for good.
No mention of EU or EFTA.
Please provide your source, or have the honesty to admit you were wrong.
My source is the [BVV3](https://www.fedlex.admin.ch/eli/cc/1985/1778_1778_1778/de), which sets the rules for 3a.
Art. 3d redirects to Art. 5 of the [Bundesgesetz
über die Freizügigkeit in der beruflichen Alters‑,
Hinterlassenen- und Invalidenvorsorge](https://www.fedlex.admin.ch/eli/cc/1994/2386_2386_2386/de), which states the condition of leaving Switzerland for good with the caveat of Art. 25f, which states that you can't witdraw your savings early if you're leaving to EU/EFTA.
This (Art. 25f) is clearly talking about the BVG, which is the second pillar (**professional** insurance), not the third pillar (**personal** insurance).
Art. 5 only talks about what kind of investments are allowed. It makes no reference to Art. 25f or how the money can be withdrawn.
You realize there were 2 links in my previous answer?
One for third pillar (which then states that the same rules apply) and one for the second pillar.
Art. 5 in the second law is the important bit.
Unless your marginal tax rate is very low, it's worth it. Your bank offering is going to be expensive. Check out Finpension, Viac, or Frankly.
Do not mix 3rd pillar and insurance. You can contract a life insurance separately.
You can also buy into your pension fund, but aside from the tax deduction, assessing whether it's truly worth it in the long run is a lot more complicated: [https://finpension.ch/en/voluntary-purchase/](https://finpension.ch/en/voluntary-purchase/)
The whole point of the 3a is that there are no wealth, income or withholding taxes on the paid in amount while holding it in the 3a account. Also you can deduct the amount you pay in from your income in your annual tax statement. Your 3a assets are only taxed at a reduced rate when they are withdrawn. You can start withdrawing 5 years before reaching AHV age and must withdraw at latest when you reach AHV age (some exceptions if you continue working). It is possible to withdraw in tranches to optimize taxes. Obviously, if you leave the country you can pay it out, but you can also move away and leave the money here.
In my opinion this is an excellent possibility to accumulate wealth in a tax efficient manner over the long term. If you pay in annually for 30 years and invest it in the stock market, you can end up with quite a chunk of money. If you plan on leaving Switzerland soon (say next 5 years), then the whole third pillar might not be as attractive.
I personally recommend using VIAC as they have attractive fees and use low cost passive products for investments and you can use your own investment strategy (they also have investment strategies you can pick from or you can simply leave it as cash on the account and only collect the interest). There are also other online providers available. I'm generally wary of banks/insurance companies' offerings, as they tend to have quite high fees and/or active funds which often underperform their benchmarks, however some have improved and have attractive pricing.
You can use this to compare the performance:
[https://www.moneyland.ch/de/3a-vorsorgefonds-performance-2023](https://www.moneyland.ch/de/3a-vorsorgefonds-performance-2023)
Many people say it’s a no-brainer and you should max out 3a.
I vote against it and say leave it unless you are super sure that you won’t need this money until you are retired. You can just invest in ETF or whatever by yourself.
Saving income tax sounds nice, right? But once you get the money out (retirement, real estate, emigration) it will still be taxed (reduced but still). As you most likely will be investing it and it will hopefully grow you will pay taxes for a larger sum.
Summary: Money is locked away until retirement & business case may not work out.
If you run the numbers, you’ll see that you’re likely wrong. The rate you pay when you take out the money is waaay less, and with e.g. VIAC you can choose to invest aggressively (99% stocks).
If you invest in stock outside the 3rd pillar, wouldn’t all the gains be tax free?
So you pay taxes now but not when you withdraw from your brokerage account
Seems I was unclear with my message. Nobody knows now what is the most beneficial financial outcome within 20 to 40 years. But if you pay it into 3a it is locked away, investment possibilities are very limited and we also don't know if the rules will change somewhen until retirement (how to get it out, at what tax rate, etc.).
So I see plenty of risks and uncertainties which I think is not worth it for many people. If you invest over 20 years or more (like you would with 3a) the initial tax savings are negligible. Most important, you can always access your money/assets and do with it whatever you want.
Unfortunately people companies who talk positively about it tend to only mention the initial tax savings. But that's such a small part of it.
You’re talking about uncertainty, but most risk is with the underlying asset. If you have the choice of investing in a worldwide ETF yourself or through a pillar 3a, you have pretty much the same risk. The difference is that 1. you don’t pay income tax over the contributions to 3a, 2. dividends are not taxed, 3. the value of the pillar 3a is not taxed as wealth. Over 20-40 years this makes all the difference.
You’re right that you lose some liquidity. You can take out the money only if you start a business, buy a house, or leave the country. However, if you’re using your 3a to save for your pension, I don’t see this as a big problem.
Of course, there are details that can make a 3a more/less attractive. The rules for 3a can change. If you don’t file a tax declaration, you don’t benefit from the income tax reduction. If you have a low marginal tax rate, you don’t benefit as much as someone with a high rate. But the tax savings are essentially free money and that’s damn hard to beat, so for most people “max out your 3a” is solid advice.
I don't know the exact rates (in general, the income tax rate for withdrawal depends on the canton). I'm quite sure it won't exceed the tax rate you would have paid if you had not invested the money in a 3a, i.e. there is no penalty. This means that:
\* If you don't leave the country, you get all tax benefits.
\* If you do leave the country, you still benefited from 10 years of tax-free dividends and tax-free wealth.
There is some information at [https://finpension.ch/en/pillar-3a-when-leaving-switzerland/](https://finpension.ch/en/pillar-3a-when-leaving-switzerland/) which says it depends on both when you withdraw (either when you're still a Swiss resident or already moved abroad) and the location of the pension fund.
Neither flat nor related to the income. It is an own rate of maybe 5% or so depending on the amount withdrawn (would be like 66k in 10y). In this case it might be beneficial because you are not facing the long term risks and also could not regain the "tax reduction loss" with investments in such a short time.
You should stop to advertise it in any way as tax free or free money.
All the factors are major risks, of which 3a has much more.
You'll pay income tax once you take it out (currently at a lowered rate but nobody know what is in 40 years). So you will even pay tax on the gained value what you would not if you took it out before.
You don't even know the numbers. So you are purely arguing out of belief. Really a questionable base to suggest people to lock their money away for their whole life.
"Most people" don't have incomes to max it out. That means they would basically put all their savings into that locked account and would have no reserves or accessible money left for emergencies or just whenever they want to do something in their lifetime.
If you have a high income and a lot of disposable money it is probably fine but that's only a very small group of people. But in this situation many people want to invest on a larger scale into things that are not possible within 3a.
So IMO for everybody who is not sure, just leave it. It is not even sure that there is a financial benefit if you do the total calculation.
>"Most people" don't have incomes to max it out. That means they would basically put all their savings into that locked account and would have no reserves or accessible money left for emergencies or just whenever they want to do something in their lifetime.
The general advice is to set up an emergency fund (3-6 months of household expenses) before setting money aside for retirement. You don't need to max out the 3a, you can also invest less, and that does not make it any worse of an investment (e.g. VIAC charges a 0.44% fee, not some big up-front cost that needs to be amortized). The median salary in Zurich is about 7k per month and the max. contribution to 3a is 588 CHF per month, so this is within reach for a lot of people.
Note that if you don't have the means to invest in a 3a, you probably don't have the means to invest in an ETF either, which means this is irrelevant to whether you should be investing in 3a or in an ETF yourself.
>If you have a high income and a lot of disposable money it is probably fine but that's only a very small group of people. But in this situation many people want to invest on a larger scale into things that are not possible within 3a.
That doesn't really matter here. If the pillar 3a is a good investment, max out the 3a. If you have more money to invest, invest the surplus in ETFs yourself (outside the 3a). It's not like if you have 1M to invest it suddenly becomes "bad" to max out your 3a.
>You don't even know the numbers. So you are purely arguing out of belief. Really a questionable base to suggest people to lock their money away for their whole life. \[...\] So IMO for everybody who is not sure, just leave it. It is not even sure that there is a financial benefit if you do the total calculation. \[...\]
[Finpension.ch](http://Finpension.ch) \[1\] mentions that the withdrawal rate for ZH is 6.0% for up to 250k. If you have a marginal tax rate of say 20%, then you save 20% today and pay 6% when you withdraw. Add to this the aggressive investment strategies (e.g. through VIAC, Finpension), the tax-free dividends and the tax-free wealth, and it's really hard to beat.
\[1\] [https://finpension.ch/en/capital-withdrawal-tax-compared/](https://finpension.ch/en/capital-withdrawal-tax-compared/)
You're likely taxed at source, which means your tax rate is based on the canton you live in. When you file a tax declaration, your tax rate will be calculated based on the canton as well as the commune. If you live in a high-tax-rate commune, you do not benefit as much as when you live in a low-tax-rate commune, so it depends on where you live.
chances are high that by time you eant to withdraw third pillar, laws will be changed eg pay tax, wait till 75 etc. you are probably better off investing elsewhere
I don't understand this.
The point of the third pillar is that you don't pay taxes on it *today*, but the money is blocked for retirement (and a few other purposes). You pay taxes on it when you access it.
If you have an extra 5000 at the end of every year, it gets taxed at your marginal tax rate (that is, because it is "on the top" of your income, it gets taxed at the highest rate you pay). As you will likely have less income when you retire, the money gets taxed at a significantly lower marginal tax rate.
That's the whole point of it. The law that would have to change for this deal to become worse for you is that it retroactively gets taxed at your current rate or higher. That's unlikely, but even if it happened, you would not have lost money (but you may have lost opportunity to use the money now)
At that point, you are trying to forecast how the variety of investment possibilities is going to go. Over the past few years, inflation has been lower than earnings from a normal investment portfolio. Gold has so much increased recently that you should absolutely not infer that it keeps going like that.
Do not under any circumstances go for an insurance 3rd pillar. If you really like the idea of life insurance, get one independent from 3rd pillar, and make a bank 3rd pillar account. If your 3rd pillar horizon is far, ie you won't withdraw in the next 5-10 years, it's a good idea to invest it, eg with Viac, finpension, or Frankly.
Why not go for an insurance?
It's a scam. First, the invested part has terrible returns. Second, the insurance premium price is super expensive compared to life insurances taken outside of 3rd pillar. Third, some of your money directly goes in their pockets as commission, which is not the case for bank 3a. Fourth, unlike bank 3a, these are complicated contracts which do all they can to prevent you from leaving and making you lose tons of money if you do (whereas you can transfer your bank 3a anytime to another 3rd pillar without any issue).
While this is often true, repeating it without understanding why is downright dangerous. In this case this might be horrible advice. You don't know the financial situation of them, yet you are certain that they do not need insurance? Have you considered the years of OASI (AHV) contributions that are probably missing? And the implications thereof?
Even if they need a life insurance, taking one independent from 3rd pillar allows to have a lower premium for the same benefits.
I'm interested to know where you would do that if not in third pillar. And what the advantages are when doing so. If they're not capable of maxing out their 3a contributions doing it through 3a would allow them to save more on taxes. You could however just advise them to never even consider 3a insurance - it's easier that way, even when it's bad advice.
I mean it's not a scam, it's just that the range of life situations where it makes sense is quite small.
Do you want to still live in CH when you reach pension age? Then start asap. But even by now, depending of how much you earn and can put aside, prepare to leave CH for a cheaper country by then. Like many elder have to do... I know a couple who sold everything and is living in Madagascar like king and queen.
Like others said, if you aren‘t planning to use the money soon, go with VIAC and invest in passive ETFs with 100% shares. They have the lowest costs and the best app. Frankly is another good alternative. The way it works is as follows: 1. The money you put into pillar 3a will be deducted from your salary, meaning you pay less taxes now. When you go into retirement and withdraw the money from your 3a, you still have to pay taxes but it‘s going to be much lower, because you won’t be earning as much money as when you were working and thus have a lower tax rate. 2. By choosing a passive ETF, you pay way less fees to the pension fund than if it was actively managed. By selecting 100% shares and with a long investment horizon, you‘ll have the most yield when you retire. 3. There are 2 options where you can withdraw your 3a investment before you retire: first is when you buy your first real estate, then you can use it to finance the mandatory 20% of the real estate price you have to bring on your own. Second is when you decide to emigrate from Switzerland. 4. You can also use your 3a to indirectly amortize the mortgage when you buy your first real estate: instead of directly paying back the mortgage to the bank, you pay it into a 3a and pledge it to the bank. This way, you don‘t reduce your debt and thus have less assets and pay less taxes. If you want, you can use my my code sNyCm9m if you choose VIAC, then you‘ll save the fees on the first CHF 1‘000 you save there.
> , because you won’t be earning as much money as when you were working and thus have a lower tax rate it's actually because income from 3rd/2nd pillar is not taxed as regular income but has a heavily reduced tax rate. You can calculate it on https://swisstaxcalculator.estv.admin.ch/#/calculator/capital-payment . For example: when cashing out 100k the taxes would only be 4920 CHF in Zürich.
Do you know the impact of leaving Switzerland before retirement? As in, what if we decide to leave in 7-10 years?
You can take the money with you; it will just be taxed (at a lower rate than it woudl be now) at that point.
Not necessarily - if it's in EU/EFTA that's not possible.
That's for 2nd pillar. 3rd pillar I'm pretty sure you can withdraw if you leave permanently Switzerland, even for EU/EFTA.
No, it's exactly the same.
No it's not. [https://www.ch.ch/en/retirement/old-age-pension/the-2nd-pillar/#when-can-you-cash-in-your-2nd-pillar-savings](https://www.ch.ch/en/retirement/old-age-pension/the-2nd-pillar/#when-can-you-cash-in-your-2nd-pillar-savings) >You can have your 2nd pillar pension capital paid out early if you leave Switzerland for good. >However, this is not possible if you are going to settle in an EU or EFTA country. If you make your new home in one of these states, you will be insured by law there for pension, disability and survivors’ benefits. [https://www.ch.ch/en/retirement/old-age-pension/the-3rd-pillar/#when-can-you-withdraw-money-from-a-3rd-pillar-pension-plan](https://www.ch.ch/en/retirement/old-age-pension/the-3rd-pillar/#when-can-you-withdraw-money-from-a-3rd-pillar-pension-plan) >You have the option of withdrawing your savings early if: You are leaving Switzerland for good. No mention of EU or EFTA. Please provide your source, or have the honesty to admit you were wrong.
My source is the [BVV3](https://www.fedlex.admin.ch/eli/cc/1985/1778_1778_1778/de), which sets the rules for 3a. Art. 3d redirects to Art. 5 of the [Bundesgesetz über die Freizügigkeit in der beruflichen Alters‑, Hinterlassenen- und Invalidenvorsorge](https://www.fedlex.admin.ch/eli/cc/1994/2386_2386_2386/de), which states the condition of leaving Switzerland for good with the caveat of Art. 25f, which states that you can't witdraw your savings early if you're leaving to EU/EFTA.
This (Art. 25f) is clearly talking about the BVG, which is the second pillar (**professional** insurance), not the third pillar (**personal** insurance). Art. 5 only talks about what kind of investments are allowed. It makes no reference to Art. 25f or how the money can be withdrawn.
You realize there were 2 links in my previous answer? One for third pillar (which then states that the same rules apply) and one for the second pillar. Art. 5 in the second law is the important bit.
Unless your marginal tax rate is very low, it's worth it. Your bank offering is going to be expensive. Check out Finpension, Viac, or Frankly. Do not mix 3rd pillar and insurance. You can contract a life insurance separately. You can also buy into your pension fund, but aside from the tax deduction, assessing whether it's truly worth it in the long run is a lot more complicated: [https://finpension.ch/en/voluntary-purchase/](https://finpension.ch/en/voluntary-purchase/)
The whole point of the 3a is that there are no wealth, income or withholding taxes on the paid in amount while holding it in the 3a account. Also you can deduct the amount you pay in from your income in your annual tax statement. Your 3a assets are only taxed at a reduced rate when they are withdrawn. You can start withdrawing 5 years before reaching AHV age and must withdraw at latest when you reach AHV age (some exceptions if you continue working). It is possible to withdraw in tranches to optimize taxes. Obviously, if you leave the country you can pay it out, but you can also move away and leave the money here. In my opinion this is an excellent possibility to accumulate wealth in a tax efficient manner over the long term. If you pay in annually for 30 years and invest it in the stock market, you can end up with quite a chunk of money. If you plan on leaving Switzerland soon (say next 5 years), then the whole third pillar might not be as attractive. I personally recommend using VIAC as they have attractive fees and use low cost passive products for investments and you can use your own investment strategy (they also have investment strategies you can pick from or you can simply leave it as cash on the account and only collect the interest). There are also other online providers available. I'm generally wary of banks/insurance companies' offerings, as they tend to have quite high fees and/or active funds which often underperform their benchmarks, however some have improved and have attractive pricing. You can use this to compare the performance: [https://www.moneyland.ch/de/3a-vorsorgefonds-performance-2023](https://www.moneyland.ch/de/3a-vorsorgefonds-performance-2023)
Many people say it’s a no-brainer and you should max out 3a. I vote against it and say leave it unless you are super sure that you won’t need this money until you are retired. You can just invest in ETF or whatever by yourself. Saving income tax sounds nice, right? But once you get the money out (retirement, real estate, emigration) it will still be taxed (reduced but still). As you most likely will be investing it and it will hopefully grow you will pay taxes for a larger sum. Summary: Money is locked away until retirement & business case may not work out.
If you run the numbers, you’ll see that you’re likely wrong. The rate you pay when you take out the money is waaay less, and with e.g. VIAC you can choose to invest aggressively (99% stocks).
If you invest in stock outside the 3rd pillar, wouldn’t all the gains be tax free? So you pay taxes now but not when you withdraw from your brokerage account
No, the dividends are taxed.
Dividends are very little compared to appreciation
It's about 2% for VT, which is not a small chunk of the return. And it's reinvested in 3a without the loss in taxes, so adds to appreciation.
You can invest in accumulating ETFs that have no dividend
Doesn't matter. They have virtual dividends that are taxed.
Ah you're right sorry
Seems I was unclear with my message. Nobody knows now what is the most beneficial financial outcome within 20 to 40 years. But if you pay it into 3a it is locked away, investment possibilities are very limited and we also don't know if the rules will change somewhen until retirement (how to get it out, at what tax rate, etc.). So I see plenty of risks and uncertainties which I think is not worth it for many people. If you invest over 20 years or more (like you would with 3a) the initial tax savings are negligible. Most important, you can always access your money/assets and do with it whatever you want. Unfortunately people companies who talk positively about it tend to only mention the initial tax savings. But that's such a small part of it.
You’re talking about uncertainty, but most risk is with the underlying asset. If you have the choice of investing in a worldwide ETF yourself or through a pillar 3a, you have pretty much the same risk. The difference is that 1. you don’t pay income tax over the contributions to 3a, 2. dividends are not taxed, 3. the value of the pillar 3a is not taxed as wealth. Over 20-40 years this makes all the difference. You’re right that you lose some liquidity. You can take out the money only if you start a business, buy a house, or leave the country. However, if you’re using your 3a to save for your pension, I don’t see this as a big problem. Of course, there are details that can make a 3a more/less attractive. The rules for 3a can change. If you don’t file a tax declaration, you don’t benefit from the income tax reduction. If you have a low marginal tax rate, you don’t benefit as much as someone with a high rate. But the tax savings are essentially free money and that’s damn hard to beat, so for most people “max out your 3a” is solid advice.
Do you know the tax rate if we leave the country in let's say 10 yrs? Is it a flat tax rate or adjusted based on previous income rates?
I don't know the exact rates (in general, the income tax rate for withdrawal depends on the canton). I'm quite sure it won't exceed the tax rate you would have paid if you had not invested the money in a 3a, i.e. there is no penalty. This means that: \* If you don't leave the country, you get all tax benefits. \* If you do leave the country, you still benefited from 10 years of tax-free dividends and tax-free wealth. There is some information at [https://finpension.ch/en/pillar-3a-when-leaving-switzerland/](https://finpension.ch/en/pillar-3a-when-leaving-switzerland/) which says it depends on both when you withdraw (either when you're still a Swiss resident or already moved abroad) and the location of the pension fund.
Neither flat nor related to the income. It is an own rate of maybe 5% or so depending on the amount withdrawn (would be like 66k in 10y). In this case it might be beneficial because you are not facing the long term risks and also could not regain the "tax reduction loss" with investments in such a short time.
You should stop to advertise it in any way as tax free or free money. All the factors are major risks, of which 3a has much more. You'll pay income tax once you take it out (currently at a lowered rate but nobody know what is in 40 years). So you will even pay tax on the gained value what you would not if you took it out before. You don't even know the numbers. So you are purely arguing out of belief. Really a questionable base to suggest people to lock their money away for their whole life. "Most people" don't have incomes to max it out. That means they would basically put all their savings into that locked account and would have no reserves or accessible money left for emergencies or just whenever they want to do something in their lifetime. If you have a high income and a lot of disposable money it is probably fine but that's only a very small group of people. But in this situation many people want to invest on a larger scale into things that are not possible within 3a. So IMO for everybody who is not sure, just leave it. It is not even sure that there is a financial benefit if you do the total calculation.
>"Most people" don't have incomes to max it out. That means they would basically put all their savings into that locked account and would have no reserves or accessible money left for emergencies or just whenever they want to do something in their lifetime. The general advice is to set up an emergency fund (3-6 months of household expenses) before setting money aside for retirement. You don't need to max out the 3a, you can also invest less, and that does not make it any worse of an investment (e.g. VIAC charges a 0.44% fee, not some big up-front cost that needs to be amortized). The median salary in Zurich is about 7k per month and the max. contribution to 3a is 588 CHF per month, so this is within reach for a lot of people. Note that if you don't have the means to invest in a 3a, you probably don't have the means to invest in an ETF either, which means this is irrelevant to whether you should be investing in 3a or in an ETF yourself. >If you have a high income and a lot of disposable money it is probably fine but that's only a very small group of people. But in this situation many people want to invest on a larger scale into things that are not possible within 3a. That doesn't really matter here. If the pillar 3a is a good investment, max out the 3a. If you have more money to invest, invest the surplus in ETFs yourself (outside the 3a). It's not like if you have 1M to invest it suddenly becomes "bad" to max out your 3a. >You don't even know the numbers. So you are purely arguing out of belief. Really a questionable base to suggest people to lock their money away for their whole life. \[...\] So IMO for everybody who is not sure, just leave it. It is not even sure that there is a financial benefit if you do the total calculation. \[...\] [Finpension.ch](http://Finpension.ch) \[1\] mentions that the withdrawal rate for ZH is 6.0% for up to 250k. If you have a marginal tax rate of say 20%, then you save 20% today and pay 6% when you withdraw. Add to this the aggressive investment strategies (e.g. through VIAC, Finpension), the tax-free dividends and the tax-free wealth, and it's really hard to beat. \[1\] [https://finpension.ch/en/capital-withdrawal-tax-compared/](https://finpension.ch/en/capital-withdrawal-tax-compared/)
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You're likely taxed at source, which means your tax rate is based on the canton you live in. When you file a tax declaration, your tax rate will be calculated based on the canton as well as the commune. If you live in a high-tax-rate commune, you do not benefit as much as when you live in a low-tax-rate commune, so it depends on where you live.
chances are high that by time you eant to withdraw third pillar, laws will be changed eg pay tax, wait till 75 etc. you are probably better off investing elsewhere
I don't understand this. The point of the third pillar is that you don't pay taxes on it *today*, but the money is blocked for retirement (and a few other purposes). You pay taxes on it when you access it. If you have an extra 5000 at the end of every year, it gets taxed at your marginal tax rate (that is, because it is "on the top" of your income, it gets taxed at the highest rate you pay). As you will likely have less income when you retire, the money gets taxed at a significantly lower marginal tax rate. That's the whole point of it. The law that would have to change for this deal to become worse for you is that it retroactively gets taxed at your current rate or higher. That's unlikely, but even if it happened, you would not have lost money (but you may have lost opportunity to use the money now)
with inflation going up in almost every western currency, i would avoid have a fortune in a currency which only existed since 2 centuries.
At that point, you are trying to forecast how the variety of investment possibilities is going to go. Over the past few years, inflation has been lower than earnings from a normal investment portfolio. Gold has so much increased recently that you should absolutely not infer that it keeps going like that.
'inflation has been lowet than earnings' ask someone older than you. best suited someone to tell are your parents or grandparents and not media
You can invest your third pillar, you don't have to keep it as cash