30 to 50 years old

Save on taxes with pillar 2

By making voluntary purchases in the pension fund, you reduce your tax burden and gain additional tax advantages:

• You may deduct the paid-in amount from your taxable income.
• Your pension fund assets are exempt from wealth tax.
• The interest earnings and capital gains are tax-exempt.

Save on taxes with pillar 3

Payments into pillar 3a make good tax sense for several reasons:

• You may deduct the paid-in amount from your taxable income.
• During the accumulation phase, your assets in pillar 3a are tax-exempt.
• The interest earnings and capital gains are tax-exempt.

Depending on your income, place of residence and the amount paid in, pillar 3a could save you several hundred Swiss francs in taxes. However, there's a maximum amount you're allowed to pay into pillar 3a annually.

Our tips

Pillar 3a retirement savings are taxed when they're disbursed. Planning early for the disbursement is therefore worthwhile. Ideally you should set up a second or even third retirement savings account over the years. Then you can withdraw your money in staggered amounts later and keep the tax burden to a minimum.

A rule of thumb: Open another retirement savings account as soon as you've saved up around 50,000 francs in the first account.

If you'd like to have your pension fund assets disbursed later, you should make sure that the disbursement doesn’t coincide with a larger payment from pillar 3a in the same year.

Purchase in the pension fund

If you intend to pay a larger amount into your pension fund, you should split up your deposits over several years. By making staggered purchases, you can generally save more on taxes than with a single payment.

Get advice

Purchases in the pension fund should be considered carefully. Whether a purchase makes sense for you depends on your stage in life and your goals. You should consult with a professional before making a decision. We'd be glad to help you – on the topic of making a purchase in the pension fund and on all other subjects related to retirement provision.

How much money do you need during retirement?

To estimate your financial situation, compare current expenditures with your expected income:

• Current budget: Current expenses for home, living, taxes, health insurance, other insurance, telephone, car, public transportation, leisure and travel
• Prospective retirement income: AHV pension, retirement benefits from the pension fund or lump-sum payment, pillar 3, rental income and income from securities

Close any potential income gaps

Do you need more money today than you’ll have after retirement?

Do you have more income today than you anticipate for retirement? And would you rather not cut back on your spending later? Or do you have dreams which may even require more funds? Then you need to act. You still have time to pad your retirement income:

• Make voluntary purchases in the pension fund.
• Pay the maximum amount into pillar 3a.
• Build up additional capital, for example with a savings account or financial investments.

Optimize your retirement provision

What the best approach is depends on your current life circumstances and plans after retirement. Often it's a combination of several measures. We’ll gladly assist you and show you what you can do in detail.

Event of death

The benefits that AHV (pillar 1) and the pension fund (pillar 2) provide in the event of death depend on many factors. In general, retirement income from AHV and the pension fund are not enough to maintain the accustomed living standard of survivors.

Also important for common-law partners: The AHV does not pay a widow's or widower’s pension to common-law partners. Pension funds are also not obligated to disburse pensions to common-law partners. Many funds do, however, provide for benefits if the partnership existed for more than five years and written notification was submitted to the pension fund.

Invalidity

Employed persons are typically well protected in the event of an accident. In case of invalidity, the invalidity pensions provision (IV) steps in with measures to assist vocational reintegration or with an invalidity pension.

In the case of invalidity because of illness – notwithstanding possible benefits from the pension fund and IV – greater financial losses may be incurred. 

Our tips

The restricted pension provision (pillar 3a) and unrestricted pension provision (pillar 3b) let you build up additional capital and protect your family.

If you own a home, then providing for retirement and the financial security of your partner and family are especially important. Unforeseen misfortune can result in serious financial bottlenecks – above all, if one partner is mainly responsible for providing the family income. The ability to sustain a mortgage may not be guaranteed, which in the worst case could mean you need to sell your home. Term life insurance can help you avoid this.

Legally married spouses and common-law partners are not on equal footing. If you're not married, you should take certain precautions:

• Regulate the partnership pension provision on a private level. Record your individual agreements in a will or contract of inheritance. 
• Many pension funds are also there for your partner. Find out and tell the pension fund who the beneficiary is.
• Disbursal of the restricted pension provision 3a is regulated by law. Common-law partners are beneficiaries if the domestic partnership has already existed for at least five years. The unrestricted pillar 3b can be administered flexibly.
• Disbursal of the restricted pension provision 3a is regulated by law. Common-law partners can name each other as beneficiaries if the domestic partnership has already existed for five years. The nomination of a beneficiary must be deposited in writing with the pension fund. 
• The unrestricted pillar 3b can be administered flexibly. 

Get expert advice

What steps you should take to protect yourself and your family depends on many factors. We would be glad to look at your current circumstances and provide you with comprehensive advice.

Retirement savings and home ownership are closely linked, which is why you can also use retirement savings from pillar 2 and 3 when buying a property, provided you’ll be using it as your own residence. The following applies to financing: You need at least 20% of the purchase price as equity. No more than half of this can come from pillar 2.

If you want to use retirement funds for the financing, both pillars give you the following two options:

• Early withdrawal – which means the money will be taken from your retirement assets.
• Pledging – your retirement assets only act as security; your pension payments are not reduced.  

Our tip

If you'd like to use the pension fund money for financing, then you must also make sure that you maintain your pension, death and disability coverage.

Use pillar 3a to amortize your mortgage

If you already own your home, it can be worthwhile to use saved-up retirement capital to pay off your debt.

In the case of direct amortization, the mortgage will be paid off with partial withdrawals from your free assets or from pillar 3a savings. This gradually reduces the debt – though the tax-deductible interest charges also decrease year by year.  Additionally: It's only possible to make withdrawals from 3a savings to pay off a mortgage every five years.

In the case of indirect amortization, mortgage debt is not paid off in installments – instead the amounts are invested in pillar 3a. As a result, the mortgage stays unchanged, which keeps your tax burden down over the years. The mortgage will only be paid off when the retirement savings are disbursed at retirement age.

Planning your financing

It's a fact: You can save on taxes with a comprehensive plan to amortize mortgage debt. We’ll gladly show you your options in detail.

No one knows what life may bring. So it's never too early to plan your estate. Arrange your affairs in writing – this way you create clarity and be certain that your assets will be distributed in accordance with your wishes.

Remember that pension fund assets are governed by legal regulations, which you cannot get around by writing a will:

Pillar 1

In the event of death, the AHV does not pay out assets, but only a monthly survivor's pension.

Pillar 2

In the event of death before retirement, the pension fund pays a survivor's benefit stipulated in the regulations. Depending on whether you've decided on a pension or lump-sum payment, estate planning is as follows:

• Drawing a pension: The regulations determine to what extent the spouse or common-law partner is eligible for a pension.
• Lump-sum payment: Under the terms of statutory entitlement regulations, you are free to dispose of your assets by will as you choose.

Pillar 3

In the case of pillar 3a, the nomination of a beneficiary is regulated by law in the event of death: The surviving spouse gets all assets from 3a. You potentially have the opportunity to nominate the common-law partner as the beneficiary – but you must do this in writing. If there is no surviving spouse or partner, the children have a claim to your assets.

Other assets

In any event, spouses and children have a claim to statutory entitlement in the case of valuables such as real estate, savings accounts, securities or life insurance policies. Anything in addition to this is yours to dispose of as you choose.

Settling the inheritance

If there is neither a will nor contract of inheritance, the legal order of succession applies. If, as a result, the beneficiaries are the right people, you basically do not need to do anything.

With a will, you avoid ambiguities or even disputes. A will, for example, can be written out by hand if it's drawn up in accordance with certain procedural requirements. In this respect, it's advisable to enlist the help of an expert. You can amend or revoke your will at any time.

Estate planning guide

You'll find extensive information on the topic of estates and inheritance in our free guide.