Saving with pillar 3a can make your dream of a self-determined life in old age come true. But did you know that the funds are taxed when they are paid out? Swiss Life explains.

If you pay regularly into your pillar 3a as a gainfully employed person, it reduces your tax bill. You can deduct your contributions from your taxable income and save on taxes.

Taxation of pillar 3a lump-sum payment

If your accumulated pillar 3a capital is withdrawn as normal – as a rule no earlier than five years before you reach AHV retirement age* – it will be taxed at a reduced rate, separately from your other income.

* There are some special cases in which it is possible to withdraw money from pillar 3a early:

  • If you become self-employed
  • To finance a home you live in
  • To repay a mortgage
  • If you move abroad
  • If you become disabled or die

Tax rates vary by canton

Tax rates vary from canton to canton. It could therefore be advisable to change your place of residence to a low-tax municipality before making a withdrawal. Low taxes on lump-sum payouts, income and wealth are relevant.

Phased pillar 3a withdrawal can pay off

If you spread the pillar 3a payout over several tax assessment periods, you may be able to reduce taxes because: the smaller your withdrawal in a year, the lower the percentage tax burden.

Make an appointment for a consultation

Retirement provision is a complex and, above all, individual subject. Our insurance and financial experts will be happy to analyse your personal situation and suggest solutions.

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Provide for the future with three pillars

The three pillars of the Swiss pension system allow you to build your retirement savings up over years and decades. We can help you look forward to a self-determined future.

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