The Pillar 3a Tutorial

Nice post, thanks for all the information and the links!

About the lump sum taxation (Kapitalauszahlung) I’ve run some numbers, pulling data from postfinance website.

Here is my spreadsheet with a detailed analysis of tax rate per canton and per situation (single, single with kids, married)

Zurich is the worst Kanton for Kapitalauszahlung.

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Hey MrRIP,
very nice, very interesting and helpful!
wow, did not manually enter each single point there into the postfinance calculator??? :smiley:

maybe i should marry or move to ticino :wink:

Ehm… I’m very quick at typing and switching tabs… :smiley:
I’d love to have some API to update the sheet programmatically tough.

Remember that the Kapitalauszahlung applies to Pilar 3a AND Pillar 2 in case you decided to take lump sum.

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omg i was already pissed off when i realized that the income tax table cannot be copy pasted to excel and i had to type the few dozen points manually ^^ man you must have optimized this! :heart_eyes:

yes, i also have that in my mind. do you remember where this is writtnen down?

this would actually be big deal^^ instead of manually crawling the net for information…

Well, even PostFinance calculater is named “Besteuerung Kapitalauszahlung 2. Säule und Säule 3a”

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Dear all,
i came up with a new version of the 3a-vs-non-3a- calculator here
it now contains macros (I discovered VBA!!) for some income tax calculation and makes an assumption on salary and development and savings rate, so it might rise to a general FI-planning calculator for switzerland.

With MR.RIP providing so much tax data, i though of expanding it in terms of allowing for region/ confession/ #kids / civil status/… selection. This owever requires some more accurate and complete taxing tables.

I would also need some help with non-Quellensteuer calculation.

So, if you are interested, get in touch with me!

desired updates:

  1. Quellensteuer vs regular income tax: taxation calculation, database
  2. implementing Canton, civil status, #kids, confession, Gemeindesteuerfuss
  3. more versatile Kapitalbezugsteuer function
  4. more cantons support (already great work from MrRIP!)

[edit] I know there are still some bigs in this calculator - you can see it at the not-so smooth curve of the grey relative difference plot within the first 10 years. as of yet no idea where it comes from.

Great article,

One thing I did not understand is when you said you can not take fractions of account, you have to take everything out. You mean per account. As far as I know, you are allowed a maximum of 5 3a accounts and you add money in them as you wish: either fill up the first and then open a second or open all 5 and each year add the 7000 in the next account. When you retire, you will take out money from one account and only pay taxes for that ammount. Is this a good strategy(dividing the money) if you want to invest it? Isnt one big account better for returns?

@c_ralu,
thanks for your comment :slight_smile:

when you said you can not take fractions of account,you have to take everything out

this is true according to my knowledge: when you announce the you want to recieve one of your 3a accounts, you will recieve the the complete account and be taxed accordingly.

maximum of 5 3a accounts

according to here there is no technical limit on the number of accounts. however, there is a maximum number of years where you can recieve you 3a accounts, and these are the 5 years prior to your retirement. therefore you cannot generate more tax benefits by having more than 5 accounts. in the ideal case, you have 5 accounts with the same amount and recieve one every year. that is the definite tax-optimum.

you add money in them as you wish

exactly. apart from the yearly maximum amount there is no restriction when to put it into which account. and the rest of your comment is also correct, except for

Isnt one big account better for returns?

no, clearly not. Any number of shares of a fund will result in the same returns, regardles of their distribution over multiple accounts. Even the account fees usually are a small percentage of the total account value, so also this does not change when having multiple accounts.

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Great answer, thank you.

I have another question i wad looking for answer for a while. Pillar one.
It is said that if you make maximum contribution from 20 to 64 you will get s pension of 27 840. since i moved here when i was 30, i missed 10 years of contribution. It says that the pension will be reduced proportionally. That would mean that if for 44 years you get 27 840, you get 21 518.
On the official website, there is a calculator (AHV pension estimate tool )
https://www.ahv-iv.ch/de/Merkblätter-Formulare/Online-Renteneinschätzung-ESCAL
and according to my input, i get around 7000 a year.
I tried contacting all these institution but I was told they would calculate this at retirement.
Does anybody have an idea?

I am no expert on pillar 1, sorry!
i know that it is not a very simple calculation. as far as i remember, there is a percentage by which you rent is reduced for every year since you were 20 years old that you did not contribute. Yes, this is explicitly disadvantageous to people that move to switzerland in the midddle of their carreers. And it is not linear, but dont build on this comment of mine! you tax/ insurance advisor knows better for sure.

Hi @c_ralu, which numbers did you put into the calculation form ?

I think your assumptions (34/44) are correct -> you should get +/- 21k / year assumed that your income is enough to get the maximum pillar 1 contribution (which will be between 1’175 CHF/month and 2’350 CHF/month; the maximum is calculated with an annual gross income of 84’600 CHF).

You have to pay attention to the “total gross income for the period” field, where the period is 34 years -> you have to put 34x your yearly gross income.

Hope this helps.

Hi guys,

I put 100 000/year as a salary. When i added a full contribution from 20 to 64, the result was still low. Either iam not doing it rwrong or the calculator is broken.
Anyway, i found an official document that says that every year of missed contribution is penalised with 1/44. In the end, the pension is lowered from 2350 to 1873.
There is also the option of deffering using the pension by 5 years. I cant find the link anymore.
See chapter 11- When do i get a partial pension.
https://www.ahv-iv.ch/p/3.01.d

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You were right, i was only inputting the salary for one year. The good thing is that the deduction is linear.

Hi @c_ralu, try to put 100’000 x 34 = 3’400’000 CHF, you should get the correct result

Edit: OK, I’ve seen your reply !

I’m happy to see other people who think that pillar 3a isn’t a so good deal. Everyone around me thinks pillar 3a is a gift :slight_smile:
On my simulation, there was also no winner.
I have decided not to invest in 3a because of :
-the tax on withdrawal which could increase anytime
-my future early retirement :wink:

  • the difficulty to withdraw funds

There is one positive thing nobody is really considering. Its much safer in case of divorce. I have no real evidence, but think about it…

good aspect! and true, i have exactly no idea about this.

for me it’s obviously a good deal: if I subtract 6k from my income, I pay 1.5k less taxes. And I’ll pay a much smaller rate in the future when I’m withdrawing it.
On top of that, I can invest it with a TER from 0.6% to 0.9%. This is more or less exactly how much I pay as taxes in taxable account (TER +wealth tax + income tax on dividend).
And I’m planning to buy a home in 15 years so they are not really blocked, it is a form of early withdrawal.

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Grog, do you have any idea if one can move assets from a 3a in one bank to another 3a in a different bank ?

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@lv24 Yes, this is easily possible. The details you need to learn with the according bank.