I am amazed that no one mentions a fundamental point in the decision between the 3a and an individual etf.
Certainly, with the 3a, there is a tax saving: contributions, dividends, wealth tax. But don’t forget that there is a tax on capital payments of 3a, of the order of 10%.
Which makes me say that the tax advantage is ultimately derisory.
On the other hand, what makes the 3a interesting all the same is to defer the payment of taxes, and therefore to be able to make this money work.
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In my canton of residence, taxation of lump sum payment out of a pillar 3a is ~4-5% (incl. federal tax). So the net tax saving is still quite significant IMHO! Even without taking the defer of taxation into account…
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But for most people the tax on capital payment will be much lower than the marginal tax rate, that’s what matters. X * (1 - marginal tax rate) compounded, will always be lower than (X compounded) * (1 - tax on capital payment).
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with low salary, deducting contribution in 2nd or 3rd pillar could, in some cases, unlock some special social deductions.
My mother contributed to 2nd pillar CHF 10’000 in 2019. This unlocked subsides to health insurance and additional tax deductions. She paid CHF 900 instead of 4500 in taxes for 2019 and now receive CHF 170 per month (yes!) for health insurance.
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Thank you guys for contributing to this topic, your brain is amazing 
So to summarize our story, we should contribute maximum amount to the 3a pillar despite the fact that our combined gross salary is only 7000 chf? We will still see benefits compared to DIY ETF investing of that amount?
And we should both create our own 3a pillar so we will have two 3a pillars together?
Also, nobody mentioned our “advanced” age. Does that mean that our age does not matter at all in this story?
Thanks for raising this point, didn’t know that. We’d really like to avoid receiving any social deductions because we don’t want to be a burden to the state. We are well off and wilfully work only 30 % and 50 %. There is no need to exploit the state and get on their radar without reason, right? So I guess my question is how do we avoid any social deductions and subsidies? Did we set our salary high enough or should we raise it? I really don’t want taxman or social services come knocking on my door asking us if we are all right… By the way, for tax calculation purposes, remember we are married and don’t have children…
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In most cases you would have to “apply” for such things. In seldom cases, the most pro-active social cantons, they’ll get is send you a letter stating that based on your tax decl. you may be eligible, with an application form to fill out (if you want!).
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No one will knock at your door.
You have to ask for subsides. If you don’t, no worries.
For social taxes deductions, they are automatically calculated by the tax software and deducted from your revenue if you are eligible to.
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