To 3rd pillar or not to 3rd pillar

Banks, Insurances & Third Pillar
9

Hi everyone

I wasn’t really active on your forum lately - just to much going on, but this post attracted my attention. Especially as I asked Felix (CEO of Truewealth) to correct his Article.

Three important things are missing:

  1. Costs - Truewealth for example has around 0.2-0.3% higher costs than VIAC, so you should compare the return after costs. I would guess, that we are around the lowest fees in the market.

  2. Tax on income - the article does not take into credit, that you receive for example the full swiss dividends in your pillar 3a while you have to pay tax if you save privatly. For US equity there is no difference (unfortunately the updated double tax treaty is still not signed by the US). I know you mustachians do not like Swiss equity that much :wink: but if you think about the dividens (approx. 3%) and you end up paying 35% income tax (see https://www.123-pensionierung.ch/images/451_grenzsteuersaetze.pdf), you perform 0.4% better in the 3a (40% CH allocation, 1% tax difference)

  3. the tax benefit from the 3a contributions could be invested, to simply sum up is not a fair comparison. You can either choose to pay it as tax (no pillar 3a) or invest the tax savings on top of your pillar 3a with your private savings.
    If you invest the tax benefit of 1’396 with your private savings at 6%, the result would be 229’010 instead of the 55’840

I hope this helps.

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