Pillar 3a strategy/provider for possible early withdrawal (leaving CH)

Hi all,
I am an EU foreigner with already a 3a cash account which needs to be “rotated”.
I would like to open a new account with a provider such finpension or VIAC and invest in equities.
Since I do not know how long I will stay in Switzerland, I cannot decide what allocation strategy to employ.
Is it possible to keep the 3a pillar after moving ? If so, I could go for a high stock mix and probably reallocate the cash I have so far. In this case, finpension makes sense the most.
Otherwise, VIAC and a low equities share strategy makes sense the most.
Financially speaking I am a newbie and I welcome your suggestions.

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Yes. You are not obligated to cash out pillar 3a savings when you leave Switzerland. If you live outside of Switzerland, you have the right to cash them out, but you are not obligated to. So you can leave them be, and cash them out at a favorable time.

If you expect to cash out your pillar 3a savings withing 1-5 years, I would suggest keeping them in cash. The current best offer is True Wealth (1% interest per annum for cash).

If you expect to keep your money in the pillar 3a for 5-10 years, then you could consider investing. True Wealth and Finpension are the current best offers. Viac and Frankly are good too. If you want a mixed cash/investment portfolio, I would go with True Wealth, since you earn relatively high interest on cash, and the costs for investing are low.

Finpension is good if you want a pure stock portfolio. If you want control over how your money is invested, then I can vouch for Viac in that regard.

A retirement fund is also an option. BLKB iQ Fund - Responsible Equity Switzerland B is a 100% stock fund which has a 0.35% TER and no front- or back-end loads. That is comparable to the cost of Finpension. You can compare pillar 3a retirement funds here:

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Even if you have to or want to withdraw your 3a account when leaving Switzerland, you could immediately reinvest the money with a similar strategy at a regular broker. I.e. except for the short time while moving from 3a to your broker, you could stay fully invested.

If you decide to keep the money in 3a when leaving Switzerland, make sure that the 3a foundation allows this (there may be country-specific restrictions) and that there isn’t any significant drawback due to the tax laws of your new residence.

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There can also be significant advantages :smiley:

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I should have started investing just after arriving: now, having old parents abroad completely paralyzes my investment attempts.
I would even like to start buying US ETF on IBKR and build a simple portfolio, but the possibility of relocation and dealing with EU laws completely discourage me.
Probably the easiest and laziest solution is to have a cash account at TrueWealth (hoping they will not issue new fees).

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European ETFs are not that worse, buying Irish or Luxemburg based ETFs on IBKR should allow for a seamless transition even if relocating in Europe.

That is the easiest and laziest solution, and it might be the best for you depending on your risk tolerance (I may be very wrong but you sound rather risk averse in the way you value the simplest solutions over slightly more complicated but with higher expected returns and risks ones).

However, as stated above, if you want to use your 3a space to add (more) equities in your allocation, the term horizon of your move doesn’t matter, it is the horizon of when you will actually need the money that does. Selling your 3a assets and buying equally devaluated equivalent ETFs/stocks when you leave Switzerland (if you choose to close your 3a account(s) or can’t keep it/them) is a mostly neutral move.

What is your target allocation, for your global portfolio across all accounts?

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It is a mix of job conditioning and being a beginner on financial matters. I can take riskier paths if I know what I am doing.

So, I must be able to reproduce the provider strategy (pick the same funds or find something with similar price/cost).

To be honest, I do not know. Something like 60/40 makes sense to me, but as far as I understood bonds have really bad returns these days and cash is practically “safer”.

Don’t forget you have your 2nd pillar too.
Consider inclusion of it into your “overall” asset allocation (you might not need to explicitly buy bonds).

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You generally don’t pay fees for cash. Holding cash in the True Wealth pillar 3a is basically the same as putting it into a pillar 3a retirement savings account. The only things to pay attention to are incidental fees for certain kinds of early withdrawals (for home ownership or leaving Switzerland, for example). True Wealth only charges for home ownership withdrawals AFAIK.

As for investments vs. cash, it’s simply a question of time. Historically there have been very few 5-year periods in which Swiss stock indexes did not gain value, and no 10-year periods. So if history is anything to go by, investing in Swiss stock indexes if your investment term is 5 years or more is as good or better than putting your money into a savings account. Even a 100% stock portfolio has very little risk if your investment term is long enough (at least for Swiss stock indexes). But if you will need the money in less than 5 years, a savings account is better because historically there is a relatively high chance of losing money on shorter investment terms. Rock-solid bonds (i.e. Swiss government bonds) and medium-term notes are other options for shorter terms.

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This is a very good point. Your Swiss pension fund is very much like a bond, and you can include it in the bond portion of your portfolio. If you are aiming for a 60/40 allocation and your pension fund benefits make up 40 percent of your wealth, you don’t need any additional bond investments.