Would you like to optimise your income? Then you should make full use of your tax-saving opportunities – with occupational provisions, for example. Making a pension fund purchase is worthwhile. On the one hand it gives you financial independence in old age, while on the other you benefit from lower taxes now. This not only relieves your household budget, but also gives you confidence for your financial, self-determined future.
Every year, taxpayers filing their tax return watch as their tax bill climbs higher and higher and ask themselves if there was anything they could have done to reduce it. There are various ways of keeping the tax burden low – for example with occupational provisions. Depending on the pension fund, your current pension solution and salary level, it can be worthwhile to take advantage of the tax savings opportunities and thus reduce pressure on your household budget.
Save on taxes by paying into your pension fund
Many people think of the 3rd pillar when it comes to saving taxes through retirement provision. However, the 2nd pillar also offers an opportunity to save on taxes. A pension fund purchase can make sense, for example, if you have already paid in the maximum amount to pillar 3a (for insured persons with a pension fund: CHF 7056; without a pension fund: CHF 35 280 or max. 20% of net income).
The pension fund certificate shows whether you can already count on the maximum possible retirement savings. If this is not the case, you can make additional payments into the pension fund to reduce your tax burden. The purchase sum can be deducted from your taxable income. The purchase can be made at any time.
The following points need to be considered:
- Living expenses: Purchase amounts generally cannot be withdrawn until retirement age. You can only withdraw the funds prior to retirement if you become self-employed, purchase owner-occupied property or move abroad permanently. Therefore, only money that is not needed for living expenses should be invested.
- Upper limit: The full benefits as specified in the pension fund regulations represent the maximum purchase amount.
- Early withdrawal: If you financed your home with an advance withdrawal from the pension fund, this must first be repaid before any tax-deductible purchases can be made.
- Pension fund situation: You should take a close look at your pension fund’s financial situation – and avoid paying into it if it does not have sufficient cover in order to avoid losses.
Distribute larger purchase amounts over several years. This will reduce the progressive tax rate several times over, resulting in further tax savings.
When is a voluntary purchase in the pension fund a good idea?
- If you join the pension fund after the age of 25.
- If you have received a salary increase.
- If your pension plan has improved by increasing your savings contributions.
- If you switch to a pension fund with higher benefits.
- If you wish to compensate for missing insurance years due to a gap in employment, e.g. through pregnancy, studying, unemployment or a stay abroad.
- If you are planning early retirement.
- If (early) retirement is more than 3 years off.
- If you want to close a pension gap as a result of divorce.
Arrange a consultation appointment
Does a pension fund purchase make sense for you? Let our experts advise you, free of charge and with no obligation.