Withdrawing your pillar 3a assets Withdrawing the pillar 3a

How to withdraw your pillar 3a and save on taxes.

How to withdraw your pillar 3a and save on taxes.

When can you withdraw money from your pillar 3a account?

Generally, pillar 3a assets can be withdrawn at the earliest 5 years before reaching the reference age. However, there are some special cases where an early withdrawal of pillar 3a assets is possible: 

  •  If you wish to finance your own home
  • If you wish to become self-employed
  • If you wish to buy into a pension fund
  • If you receive a full IV pension
  • If you leave Switzerland permanently
  • If you dissolve your current matrimonial property regime, in particular following divorce
  • Self-employed persons: Business investments 

Good to know

Good to know

Anyone who remains gainfully employed beyond the normal retirement age may also postpone the withdrawal of their 3a assets. However, you must withdraw your credit balance no later than age 70 (for men) or 69 (for women). 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.

How to save on taxes when withdrawing your pillar 3a

If you withdraw your pillar 3a assets, you will be subject to capital gains tax. It makes no difference whether you use your pillar 3a at retirement age or beforehand, for example to buy your own home or start your own business. 

To keep the tax burden as low as possible when withdrawing capital from your pillar 3a, you can hold multiple 3a pillars and withdraw from them in stages. This means not withdrawing your entire 3a assets all at once, but staggered over several years or tax periods. By law existing pillar 3a accounts may no longer be split, not even when making withdrawals at the time of retirement.

The tax authority counts all pension withdrawals in a year together to calculate the capital gains tax. This means that any (partial) capital withdrawal from the pension fund or withdrawal from a vested benefits account is also added to a pillar 3a withdrawal. The sliding scale helps to reduce the total amount payable per year.

Example calculation: Withdrawal of multiple pillar 3a accounts

Starting position: a married man, resident in Zurich, non-denominational, withdraws CHF 440,000 from his pillar 3a. Assuming that he always pays in the current maximum amount of CHF 7056 and has chosen the strategy with a 95% equity weighting. The choice of investment strategy has an impact on asset performance.

Case 1: If the withdrawal is made from only one pillar 3a, the tax burden is CHF 27,798.

Case 2: If the person holds five pillar 3a accounts, he can have the same total amount paid out over five years (starting at age 60). The tax burden spread over the four years amounts to CHF 20,450.

The staggered withdrawal therefore produces tax savings of CHF 7,348.

Creating multiple pillar 3a accounts

You need to have already opened multiple pillar 3a accounts in order to benefit from a staggered withdrawal. We recommend setting up a second frankly pillar 3a account for amounts above CHF 50,000.

You can open another frankly pillar 3a account in the app with just a few clicks. If you already have two pillar 3a accounts with other banks then you can also transfer them to two frankly 3a accounts, meaning that you can continue to separate your savings. Simply place two transfer orders – one order per frankly account.

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