Am I late for pillars?

Banks, Insurances & Third Pillar
1

Hello everyone,

I have been wondering, if I am already late for putting money in my pillars. I came to CH 4 years ago, without the idea of staying so long. Now, I’m in a situation where I have cash, that I have been putting into some ETFs monthly. However, I never put money in pillars.

The plan now is to leave CH in around ±2 years, therefore I am not sure if I should start maxing my pillar 3 now.

Would you suggest to anyways max it out?

I guess there will be people in similar situation, and maybe it could throw some light :slight_smile:

2

Yes, maxing out makes always sense, even if you leave Switzerland in two years (let’s see ;D)

  1. You save on your taxable income (depends on your type of residence permit).
  2. When withdrawing it, a preferred tax rates applies. I would choose a provider like Finpension.
  3. You invest in cost preferred securities.
2 Likes
3

If you plan to leave in 2 years, you need to evaluate the pro and cons.

Important things to consider

  • when you leave CH, are you allowed to keep your 3a and 2nd pillar invested or you would be forced to sell them and withdraw ?
  • if you are forced to withdraw, would withdrawal tax rate be based on CH or the new country ?
  • if you are not forced to withdraw , and let’s say you can keep the money in Vested accounts, would return be interesting vs Taxable account?
  • normally voluntary payments to 2nd pillar need 3 yr locking period , if you are forced to withdraw, then what happens to the tax advantage that you received during the two year period
  • are you filing regular tax returns or you are on Quellensteuer only ? That would depend marginal tax rate advantage for 3rd pillar

Answers to these questions would determine the advantages and disadvantages. And that should help make a decision.

I know I didn’t answer the question with yes or no. But the problem is it all depends on many other variables :slight_smile:

3 Likes
4

Yes i See. Thanks for that. It will give me thing to think about before getting into it.

5

Good points. And do you know if I can contribute retroactively to “compensate” the years that I did not contribute to the 3a?

6

Unfortunately, this is not possible.

They are discussing it in the parliament, but I would not gamble, that this will come through, soon.

2 Likes
8

Are you already filing tax returns?

I arrived in CH in 2020 as well and have been using S3a since the beginning, but the process for nachträgliche ordentliche Veranlagung in Zurich is so slow. I received my tax return for 2020 in March 2023 and as of today still haven’t received the one for 2021 (despite filing all necessary documents in January 2022).

Partly venting, partly mentioning it here because it might be relevant, especially with the added complexity of dealing with your CH tax office from abroad.

2 Likes
9

If you leave in +2 years, it makes sense to put money in your pillars.
If you leave in -2 years, something else doesn’t make sense :slight_smile: