You probably remember the moment when you decided to start your own business. It was certainly a mixture of determination, fear, courage and madness. A great deal was unclear, the rest was uncertain. But are you now self-employed and successful? Congratulations!
Not only did your blood, sweat and tears (hopefully only metaphorically) go into establishing your company, but also your money. And who has kept on investing in the business and their own future? You, of course! But let’s be honest – what about your personal pension?
Logically you have the feeling that your company represents your pension – after all, it’s all your money in there. But after mustering up enough courage to set up your own business and deciding to live your life independently of others, are you suddenly handing over the reins?
You may be certain that you can hand over your company to a successor or sell it at a profit if you want to step down, that’s quite possible - but placing your hopes in someone who will one day “pay back” your invested retirement capital of their own free will is certainly not the best strategy.
You purposely set up your own business, so now you can also shape your own pension!
The system of retirement benefits in Switzerland basically consists of three pillars: the state AHV, the occupational BVG and the private pillar 3. Pillar 1 is mandatory and, put very simply, is intended to secure a basic standard of living in retirement. However, in very few cases is it enough to maintain the accustomed standard of living.
As stressful as the operational demands of everyday life may be, you should simply think about your distant future too. At what age do you want to retire and what should your life be like then? Depending on the answers to these questions, there needs to be a supplement in the form of an occupational and/or private pension.
You are legally bound to offer pillar 2 (a company pension plan) if you employ staff, but even if you're on the go as a one-woman or one-man business, there are many options available to you. You can, for example, set up a limited liability company (GmbH) or a public limited company (AG) and be employed by this legal entity. If you have a family, one advantage of pillar 2 is that it also covers death and disability. However, you should carefully consider which specific legal form is best for you and your requirements, as it's not only your pension that's a factor here.
But it's reassuring that you can be flexible. If you still don't save on a regular basis or don't have many savings to invest in your pension, pillar 3a is an ideal alternative. In this case you can also cover yourself by taking out separate insurance.
Pillar 3 in the Swiss pension system is designed to enable people to save money so that they can maintain their accustomed standard of living later on. Perhaps you used your previous pillar 3a funds to start your own business or buy your own home. In any event, you can save your assets for retirement with tax relief:
as a self-employed person unaffiliated to a pension scheme, you may pay in up to 20% of your annual earned income, up to a maximum of CHF 34,416 (applies to 2022).
The tax authorities also support your pension provision, in that you can deduct all your deposits up to the maximum amount from your taxable income!
Saving is a good thing in itself, but with current interest rates you also need perseverance - this is why securities saving might be the better option for you. The good thing about pillar 3 is that you can determine your own investment strategy!
Employed persons with pension fund (second pillar)
maximum CHF 6'883.-
Self-employed persons without pension fund (second pillar)
20% of net earned income, maximum CHF 34'416.-
With frankly's pillar 3a app, it's easy to invest your retirement capital as you wish. It only takes a few minutes to open, and you'll benefit from the advantages for the rest of your working life:
you can make deposits from as little as CHF 1, and you have a choice of high-quality investment products with attractive yield opportunities, all at radically low prices. Digital, simple and easy to understand: it's literally in your hands to make more of your pension.
Do you already have a pillar 3 plan? No problem either, as you can change it to frankly directly in the app in four steps. This way you benefit from frankly's attractive conditions, because frankly is half the price of comparable offers for saving with securities.
You can find frankly in the App Store or on Google Play
You’ll be registered in a few minutes, no paperwork. Saves stress and time!
Simply pay in your pension assets to frankly. This is the maximum amount you can pay in as a self-employed person if you're not affiliated to a pension scheme.
25 per cent of all entrepreneurs do not deal with their pension. That’s not smart. You're used to making prudent and far-sighted decisions for your job - you must do so for your pension situation too. Perhaps one day you'll be able to hand over your company in a successful succession process. But what if you can't? Whatever the case, you did not set up your own business in order to be dependent on a successor or buyer.
So imagine how you want to live in retirement and pursue this goal in the same way as you pursue your career aspirations: self-determined and full of drive. frankly supports you in this.
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