How you can benefit twofold Save up for retirement and save on taxes too

Retirement provision also pays off from a tax point of view. You can save on taxes both during the accumulation phase and while withdrawing pension assets.

You can contribute to pillar 3a every year. The maximum contribution in 2024 is CHF 7,056. If you’re not a member of a pension fund, you may contribute 20% of your net income, but no more than CHF 35,280 per year (as of 2024), to pillar 3a. These amounts can be fully deducted from taxable income.

You may make voluntary contributions into a pension fund in order to close a pension gap. For example, potential purchasable amounts arise from missing contribution years or due to a maternity leave. These amounts are also fully tax deductible.

Depending on the canton, you can save a lot of money if you stagger the withdrawal of your pension assets. For this reason, try to stagger cash withdrawals under pillar 3a, from the pension fund or, if applicable, from the vested benefits foundation over time. For example, this can also be done across multiple pillar 3a accounts. Open a new pillar 3a account once the existing 3a account reaches around CHF 50,000.

Real estate can also help reduce your tax bill. For example, property maintenance and renovations are tax deductible. Maintenance measures and structural alterations are best spread out over multiple years in order to repeatedly reduce your progression-related tax burden.

Employed individuals who are planning to take an extended unpaid leave are advised to distribute it over multiple fiscal years. This will allow you to minimize your tax burden based on the progressive tax rate.

Couples with two incomes should get married at the beginning of a calendar year instead of at the end of the previous year in order to avoid higher taxation in the old year.