5 prac­tical tips on how to save on taxes with pillar 3a

How can you also save on taxes when making deposits to your pillar 3a? 5 practical tips which help you get the most out of your pillar 3a.

5 practical tips on how to save on taxes with pillar 3a

5 practical tax tips for your pillar 3a

You don't only save on taxes with your pillar 3a when you make deposits, but also when making withdrawals in particular. You probably already know that you can deduct your pillar 3a deposits from your taxable income. But that’s not all! With a few simple tricks you can also save more on taxes.

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Make a deposit every year, even small amounts 

What you pay into your pillar 3a account in the current year can be deducted from your taxable income for that year. 


Even if you can’t deposit the maximum amount, use your opportunity every year because you benefit twice over. You save on taxes straight away, and your money has more time to accumulate.


Please note that if you miss a year, you can’t make a retroactive deposit. 



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Optimise the amount you save in taxes by having several 3a pillars

If you want to use your pillar 3a when you retire, you can only withdraw your entire savings and securities balance at any one time. A partial withdrawal is not possible. 


You pay tax on the entire amount, and the higher the individual amount the more you pay because of the progressive tax structure. This makes it especially worthwhile having several 3a accounts if you have total savings of CHF 50,000 upwards, which ideally should be of the same size. You can then close them in stages and thus mitigate the problem of progressive taxation. 

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Plan in advance when you want to use your pillar 3a, and what for

You can use your pillar 3a for more than just your retirement planning, but also as a partial withdrawal for owner-occupied residential property (promotion of home ownership – WEF), e.g. for purchasing, amortising a mortgage and/or renovating, for becoming self-employed or in the event of disability. 


You can use your pillar 3a every five years for the purpose of home ownership. It's worth planning in advance what you want to use your pillar 3a assets for, since you can optimise both your tax deduction and your investment strategy accordingly. What’s more, there are many other reasons to make an advance withdrawal (e.g. taking up self-employment, moving abroad, etc.).

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Make plans as a couple and withdraw money in stages

If you and your partner (either spouse or registered partner) both withdraw pillar 3a benefits in the same year, the amount of both withdrawals will be added together and will be considered as a (higher) amount for the purpose of determining the progressive tax rate.


If you are buying a house together for example, it is worth planning your withdrawals and if possible staggering them over different tax years, or concluding a home ownership pledge agreement in favour of the financing mortgage bank instead of making a home ownership advance withdrawal.

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Make staggered withdrawals in old age

In your old age, you can withdraw your pillar 3a assets for a maximum of five years before retirement. 


If you have several 3a accounts, you can close them in stages over a period of five years, have them taxed individually and so save on taxes. Please note that if you decide to make a withdrawal from your pension fund, you should not have it paid out in the same year as your pillar 3a because of the progressive tax structure, since both amounts will be added together for tax purposes. 


Incidentally, you can leave your pillar 3a until the regular retirement age (women at 64, men at 65) even if you are no longer employed. From 2025, the reference age for women will be increased in stages. From 2028, the same reference age of 65 will apply for women and men.

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