Hello,
This is an option I’m considering this year (I was foolish not to read into it last year). Is this something you recommend? If so, what percentage annually? Are the tax benefits really that good?
Hi. This looks like a duplicate of a fairly fresh topic.
since that other thread went another direction, ill post here:
there is a yearly and an absolute limit to these voluntary contributions, but don’t ask me numbers^^
the common rationale is to wait until rather late in your life when you have a high salary and high tax bracket, because then you save most taxes with it.
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Nugget made a point. You may avoid to fill your contribution gap too early in your life because your tax bracket is quite low compared to the one you will have in a few years, Moreover, if you want to take advantage of your contribution gap, make sure to plan the repayments on a few years. Tax brackets are progressive, breaking the progression on several years leads to higher tax benefits 
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haha lets go fancy now. later gap filling usually results in higher tax advantage (due to higher tax bracket) but waiting comes with opportunity cost!
muhaha someone should calculate this, i never saw any of the tax advisors point this out! it bight be better in the end to invest into the world portfolio instead^^
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The conversation in that thread has gone in another direction.
Thank you ever so much. I don’t suppose you have the breakdown of this? I’d be interested to read the info (English or French).
My canton’s tax guide is quite in depth but it seems to skim over this topic 
Hi all, I’m a little bit stuck in my decision process so I would really appreciate some rational guidance.
35yo, 2 kids, changes job 2 year ago and had a big salary increase, from 100K to 180K + comps. Now I have gap of around 120K in my second pillar that I can buy back.
I also invest as much as possible in VOO and currently have around 130K invested in IB.
I have around 90K sitting in my savings account, what would you do?
I’d like to keep at least 40K as emergency fund, we are are planning to buy our primary home in CH but not before 3 or 4 years from now.
Should I Buy back let’s say 50K of 2nd pillar or invest more in VOO? Is the tax savings worth the underperformance of the second pillar vs stock allocation?
Thanks
I’d call it a buy-in, just to differentiate to a buy-back when one uses PF to pay for a house/apartment, and then later buys/pays back in.
I’d say 35yo is a bit young for buying in to PF, unless you’ll be using it to buy a house “soon”. Wait until about 5y before your quitting your last job, before starting to buy-in to your PF.
there’s also other newer threads about this.
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The nice thing about Pillar 2 is that you won’t pay wealth tax (Vermögenssteuer) on the amount you have invested.
What’s not so nice is that they usually have a low return compared to what VOO yields. I would start comparing the historic returns of your pension fund, taking wealth tax into account and then run the numbers.
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There’s a 3 years freeze where new buy-ins into 2nd pillar cannot be taken out for own home ownership so if those funds would be useful to help you buy your target home, it’s potentially the last chance you’ll have to score a tax savings before you need them. I would say if you plan to use (part of) your 2nd pillar to finance your prospective home, there’s a good chance the tax savings you’d be doing now would overshadow the returns you could achieve by investing in a taxable account over such a short period of time (if you use them in 3-4 years).
If you didn’t plan to use those funds to finance your home, then it’s likely you could achieve better returns by investing them more agressively in a taxable account, provided you can afford the additional risks that come with that and you intend to keep it invested for the longer term (10+ years) (and unless your pension fund pays attractive returns, making it more competitive).
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Any specific reason why you decided to only invest on the 500 largest American companies?
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I guess it’s a personal bias, I always believed in the US economy. Recently I started looking into diversifying, adding some VTI to the mix, even if for 80% it’s the same as VOO. What would your suggestion be?
Look also at the rest of the world? US stocks have been doing great lately, but things might change in the decades to come.
And BTW, economy != stock market valuations.
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Maybe we are getting out of topic for this thread, my thinking was either buying some VTI or VXUS to avoid the duplication and have a good international exposure
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