Third pillar or personal investment?

Hi everyone!
I am new to the community but I am very happy to have found it because I find it very interesting and it will surely help me to fill my huge gaps in personal finance.
I am an architect and I work as an employee with permit B. I have arrived in Switzerland less than a year ago and would like some advice on the third pillar:
is it worth investing in a third pillar (Viac or Finpension) even if my annual income is currently low (less than 50,000 gross) or it is better to wait a bit for the third pillar and now invest personally (always in the long term, for retirement) for example with Degiro with an accumulation plan in an ETF portfolio?
Or maybe it’s better to do both? I have a starting capital of CHF 20,000 to invest and currently i can save around CHF 400 per month.

many thanks in advance

With a low marginal tax rate (which is likely the case at 50k income), that might not be worth it. Especially if they end up allowing later buy-in on missing pillar3 contributions, it will be much more beneficial once you start earning more.

(Also note that it will force you to file taxes, depending on how you value that extra paperwork annoyance :slight_smile: )


Are you still studying or working only part-time / doing an internship?

hi @San_Francisco, im working, 80%

I would think of it in terms of the one-time income tax saving and of the investments you can make with Viac or Finpension (through 3rd pillar contributions). You can withdraw the 3rd pillar when you’ve moved back abroad, but you’ll have to pay some taxes (less than the income tax). If you have a better/riskier idea how to invest or want to be more flexible, you should probably do it outside the 3rd pillar. On the other hand, the 3rd pillar locks in the money while you are in Switzerland and you will not be able to act on instincts and withdraw the money at a whim (if your are a weakling :wink: or in dire need of the money). The choice is yours…

Assuming you are taxed at source (you say you are permit B) you can see how much tax you would avoid paying this year by adjusting your income in this link

If you leave Switzerland it is true you can withdraw it and pay a reduced rate of tax in CH but it is then taxable in most destination countries, UK being a notable exception (depends on Double tax agreement per country)

From a financial standpoint, maybe you’d want to look if you could increase your employment income.

I don’t mean to rub you the wrong way (though honestly, I’m a low-income :monkey: myself, compared to all the IT and finance high-flyers active on this forum), but even at 80% workload, your sub-50k income seems very low for Swiss standards. Even more so with what I assume is an academic (architecture) degree.

If there’s any further education or professional training that you can fund with those CHF 20’000 to increase your salary and/or employment prospects, I wouldn’t be surprised if the mid- to long-term return on that “investment” were much higher than investing it in an investment fund for “the long term, for retirement”.

…after which you can (usually) have the Swiss tax refunded.


@San_Francisco hi, thank you very much for your advice. I know that my income is low for my position, but its a particular situation that i hope is going to fix soon…

hi everybody, i would like to thank you all for your advice. I thought about it and in the end i think i will wait a bit to open a third pillar, until my situation is Switzerland will be clearer. But in the meantime I will still invest for my pension but outside the 3th pillar.

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