We need to wait and see what the actual proposal in parliament looks like (expected early 2025), as well what they actually conclude (expected late 2025). I think this has <20% chance to change anything, and basically zero chance to be adopted as proposed by Gaillard.
For 2024 my conclusion is similar to yours:
(a) Pillar 3a buy-in is still sensible in all cases (no limitations on tax rate, the lack of backfilling and free choice of your investment policy makes it a no-brainer)
(b) Pillar 2 buy-in is still undoubtfully beneficial if you have a 1e plan and are at marginal taxes anyway
(c) Pillar 2 buy-in is still reasonable if you have a 1e plan, even at lower tax rates. But, donât overdo it and use up the full potential, just optimize your taxes in a sensible way.
(d) Pillar 2 buy-in is on hold if you do not have a 1e plan (return expectation is too low).
And then we will have to reassess in March 2025 or so.
Yes, a broad negative echo from most parties as well as experts. Especially with respect to breaking the âVertrauensschutzâ. Choice Quote:
Auch in der Mitte ist man sich der Brisanz des Vorschlags inzwischen bewusst geworden. Vor einem Monat hatte die Mitte das bundesrĂ€tliche Entlastungspaket noch als zu einseitig auf die Ausgabenseite fokussiert bezeichnet. Jetzt kritisiert der Mitte-Fraktionschef Philipp Matthias Bregy «die RegelĂ€nderung mitten im Spiel» und dass man den «sparenden, eigenverantwortlichen Mittelstand schröpfen» wolle â «na bravo!».
No change at all here. Iâll continue to add to both pillar 3a and 2.
I enjoy the discussion, but frankly donât see the big issue. Wouldnât be suprised if some of these proposals are intentionally over the top to leave room for negotiations.
Cause some public outcry, and eventually reduce a few tax privileges that people accept happily, since they expected worse?
Maybe play the ball back to political parties that like to complain about federal cost, but are not so happy if someone wants to lower the benefits of their voters?
I donât like the idea to have pillar 2 taxed in the same progression as income, but itâs that not that absurd, the more I think of it. If you would receive for example 50k in regular pensions, instead of 1m capital, you pay federal tax on 50k each year. If you had another 140k of taxable income, youâd pay those taxes based on 190k, not 50 separately.
These poor guys canât even levy wealth tax on it, afterwards. And how many people have those additional 140k upon retirement? You could still time this and other withdrawals, end of employement, AHV etc. to avoid a really high income year.
And for 3a, are you peopleâs withdrawal taxes that high? Currently, Iâd pay some 5.7% on 250k, 6.2% for 500k and 8.3% for 1000k in a mid-level tax Canton, married scale. How much capital do you expect to have in your 3a?
Sure, a staggered withdrawal is beneficial, but none of these supposed changes would be game changer, either, whether your current marginal rate is 25% or 40%. Hopefully, could still take out some small bites in between to pay for mortgage or renovations.
The Federal Department has released a statement with regard to the proposed measure: Klarstellung
Heâs basically saying that its still very much open how the measure will be implemented esp. with regard to 3a and its too early to draw conclusions
Die Expertengruppe hat zudem festgestellt, dass KapitalbezĂŒge bisweilen zu sozialpolitisch unerwĂŒnschten Resultaten fĂŒhren können. Dann nĂ€mlich, wenn die Beziehenden ihr Kapital zu rasch verzehren und aufgrund einer zu kleinen verbleibenden Rente auf ErgĂ€nzungsleistungen angewiesen sind, die ohne Kapitalbezug vermieden hĂ€tte werden können. Auch so entstehen dem Staat Kosten, die vermieden werden könnten.
Now we are arguing this angle I seeâŠ
Because other people are not smart with their money, I should be punished.
It would be too expensive/intrusive to find out whether you are someone who can be trusted with their money or who canât, itâs more cost efficient to assume you arenât (and that if you are, you are finding ways outside of the pension system to increase your wealth and derive benefits from it). Trusting people who canât handle their money bears social costs born by the entire tax paying population so minimizing those costs bears some weight in the system optimization.
Looks like the Swiss way of balancing costs/effects while providing a basic safety net but not more to me. Thatâs the whole basis behind the current pillar 2.
The way of letting everybody swim in the same pond so that people are unrestrained, to the point of not caring if some weaker fishes get eaten by the sharks seems more like the US way to me.
The change was probably appropriate in the context of the second pillar - as it dis-incentivizes taking out capital (which was desired) but its extremely unfair on the third pillar as there simply was no meaningful option to takenout an annuity.
Maybe they need to introduce different taxation among the second and the third pillar⊠or simply ban any taking out of second pillar money.
One has to be politician to believe that the risk of the individual running out of money is lowered by government taxing away a much larger chunk before he/ she receives itâŠ
(Epeonâs rule of thumb: where the official reason doesnât make sense, a more sinister rationale tends to be in play)
Sorry, I got triggered by the mention of the swiss way of self-accountability, which I donât think applies in this context (in the same way that it doesnât apply when Iâm prevented to borrow more than the law thinks I can handle, on the premice that Iâd use it for consumption, even though I think I could use that money to great effect by buying diversified assets).
To be clear, I donât support these reported changes. While I think it is healthy once in a while to take a hard look at federal spending and taxes, I donât think that, in Switzerland, we have a systemic spending problem that is driving us to the edge on a macro level (many other countries would fall before us) so Iâm not at all convinced that bringing in more taxes should be on the dashboard at all.
Itâs both in my opinion. If I were trusted to handle my retirement assets, we wouldnât need those pension fundations, chosen by my employer, whose boards have to design investing strategies without my input.
On a general basis, I think that, in Switzerland, we actually trust people with their money only after a certain point. There is some patronizing from the government, handling our money below that point in our stead to make sure we reach a minimal standard of living. As a society, I think it benefits us but it does make me cringe every time I get to experience a barrier that tells me Iâm being protected from myself for my own good.
Seriously considering to withdraw 3a and part of 2 that I paid âinâ to clear the SARON mortgage. Any thoughts? I am not over panicking but I lost trust in the political system.
What we have here are Swiss politics working. None of the propositions should be considered as set and on its way to be implemented as is. In fact, itâs possible none of them will. We are at the very early stages of all this and are discussing the propositions of outside experts with no actual power to implement them. The political safety nets havenât really entered into play yet.
It works like that for many things, we just donât know of a whole bunch of proposals that never saw the light of day. This one draws more attention toward it but just like any other any and all individual proposals may not make it to the final version and/or may have been tampered with to the point of being unrecognisable. There is nothing actionable for an individual investor/citizen emanating from this report at this point.
Longer version:
What we are having here are experts doing recommandations. Experts are going to do proposals like that, theyâre just people getting paid to study a situation and propose solutions.
Then the political safety nets enter into action:
The Federal Council has approved their report, which only means the tasks the experts had been contracted for leading to this report are over. The Federal Council also deems the report worth studying and has defined a few, very broad lines of investigation in order to move forward. They have not at this point approved any single specific measure to my knowledge.
That doesnât mean anything for any singular proposition at this point. When the Federal Council will be done with it, it will go to the parliament who will also amend, scratch and/or add measures according to their will. Both chambers will have a back and forth that will lead to heavy changes that can range from rejecting all measures together to adopting them all and adding some through making any of them unrecognisable due to heavy changes.
Then if it goes through both chambers, a referendum can be launched and in case of success, it will have to be voted on by the population that can accept or reject it.
On a withdrawal of 1.5M you are looking at 172k of taxes (if withdrawal is fully taxed as income) instead of 34k of taxes as currently. Basically 5x more.
If an income is calculated and resulting tax rate is applied to the whole amount, then you get 42k of taxes - about 23% more.
Fully taxing the withdrawal amount as income in a single year is out of the question. That would heavily penalize retirement savings, which would be unconstitutional and it would also be far away from the described intent of the current proposal (which is to align taxes of capital withdrawal and pension payments).
Durch das Lesen und die Teilnahme an diesem Forum bestÀtigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
