How best to use your retirement account

You’d like to save for your old age and want to know what your options are? A retirement account is a good start. With this you can make flexible payments and not be bound to fixed contributions. These 4 tips will help you get the most out of your retirement account for you and your family. 

4 tips for your 3a-pension accounts

• Exploit the maximum Pillar 3a allowance. If you open a 3a-pension account, you can pay in up to 6768 francs (Effective:2016) every year. This is conditional upon you being affiliated with a pension fund. The sums deposited must come directly from taxable income.
• Make a difference with investment funds. Combine your pension account with a 3a-custody account. By placing your money in investment funds you can benefit from higher returns over the long term.
• The early bird earns more interest. Pay your contribution into the pension account in January. Thus you’ll benefit from interest for the whole year.
• Create multiple pension accounts. In your old age you can only draw out the money from your 3a-pension account in one sum and your payouts will be liable to tax in that same year. That’s why it’s best to split your deposits into multiple retirement accounts. In this way you can stagger your drawdowns and save tax.

All the 3rd Pillar retirement and custody accounts in one glance

There is no lack of options: with the 3rd Pillar you can choose between the restricted pension provision 3a and the unrestricted pension provision 3b. The restricted pension is tax-advantaged but limited to a maximum contribution. Outside of limited exceptions, you can only make use of the Pillar 3a in old age. With the unrestricted pension you decide for yourself how much you invest and how you invest. The Pillar 3b however is not tax-advantaged.

For both the restricted and unrestricted pension options your accounts and custody accounts are there to help you save. So what is the difference?

• 3a-Fisca accountsare tax-advantaged but the size of the contribution is limited. In general, you’ll earn more interest than in a savings account but you can only draw down the funds once you are retired. If you would like to pull forward the release of the funds it is only possible in exceptional circumstances – like for instance in the purchase of a home.
• 3a-Fisca custody accountsoffer higher return potential than 3a-Retirement accounts, as your capital is invested in securities. However, the investment is riskier. The same conditions apply to payments into a 3a-Fisca custody account as to a Fisca account.
• 3b-retirement accountsdo not have a minimum term and you have access to your capital at any time.
• 3b-retirement custody accountsafford the potential for higher returns than 3b-Retirement accounts, because your capital is invested in securities over the long-term. In return the risk is higher.

Not sure what is the best solution for you?

Further information on personal retirement provision future is available on our website. We’d also be pleased to advise you personally and together find the optimal solution for your retirement provisioning.