3a pillar as Self-employed (AnoBag) and FIRE

Banks, Insurances & Third Pillar
1

Hi,

I’ve been searching on the forum but can’t find a clear breakdown of benefits of the self-employment situation with 3rd pillar.

As an AnoBag I’m allowed to contribute the max 35,280 or 20% of my income to 3a and not to invest in pillar 2.

The questions is: Should I do it? Yes, the 35K CHF will reduce my taxable income, but the amount is also locked in an investment account which can be used for purchase of property. Cool.

The problem is, that those 35K yearly are not going to be accessible to me to invest in anything else besides finpension funds or turn into cash if needed.

tldr: Is it worth to YOLO the full 20% of income into 3rd pillar?

p.s. Maybe it affects the situation but my net worth is around 5M and long term plan is to have FIRE and live just of dividends. Having 3rd pillar would make dividends not accessible to me before retirement. But then again, 35K/year is not much compared to growth of my main portfolio.

Thanks for reading!

2

You can leave the country and get it out that way.

1 Like
3

Well, I ideally don’t want to leave.

My main concern is IF I invest in low-cost ETFs myself and get a 9% return (optimistic, e.g. VOO), although I don’t get any tax deductions, in 30 years I would definitely outperform viac/frankly funds and the entire amount would be tax free.

4

Unless you want to invest in exotic stuff, the finpension and viac offering are as good as a regular taxed brokerage. And the tax benefit on dividends usually beats the 0.5% fees.

With a 5M net worth it sounds like a no brainer to me :slight_smile:

edit: but splitting it into multiple years to maximize the tax savings makes sense depending on your income (how much above the top marginal tax rate you are)

2 Likes
5

Yes, indeed very optimistic.
I would go with the 3a if I were you. You seem to be set for life (congrats!), so it makes sense IMO to lock in those tax advantages. Also you can adjust your 3a strategy in finpension if you wish to be more aggressive than their already aggressive 99% equity options. Then I would be surprised if you actually have more at the end of the day with VOO vs. Finpension + Tax savings.