You ask yourself the question whether in the Pillar 3a a Bank or insurance more worthwhile for you?
Then you should read this easy-to-understand article carefully. Because maybe there are not only these two options, but even another one Third, better option for you.
What the Advantages of a bank, Insurance, and a Deposits This article tells you about the different options within pillar 3a.
Let's start with the Bank or insurance company for your pillar 3a start. If you are currently weighing up between a bank or insurance (policy), you choose between two rather safe forms of investment for your pillar 3a.
Let's take a closer look at the account.
As you probably know, there are a lot of Bank account currently rather low interest rates. Even if these should rise again in the long term, the Inflation higher than interest rates. Accordingly, you currently lose value every day in a Pillar 3a bank solution.
If your pillar 3a is intended for the long term, it is not necessarily ideal.
For young people in particular, a Pillar 3a deposit here the Far more lucrative variant be. More on this in a moment.
You are already over 55 years old? Or would you like to invest the money from pillar 3a in the Next 10 years draw? (For example, for a home ownership promotion or self-employment). Then the Pillar 3a bank account a suitable solution represent for you.
In my opinion, the Combining pillar 3a and insurance (policy) not a good idea.
Why?
Swiss readers who have taken out a pillar 3a policy and realised after a few years that it is no longer suitable for them regularly get in touch.
When they then leave the Withdraw insurance want, they are provided with the so-called Surrender value confronted.
The surrender value is the capital in the policy minus the insurance company's fees incurred.
Surrender value = actuarial reserve - unamortised costs
If you you withdraw prematurely from an insurance policyyou will be charged for any fees incurred.
You may therefore receive No payout in the first yearsas the fees are higher than several thousand francs of paid-in capital.
Don't get me wrong, insurance per se is definitely not bad and appropriate in many situations.
But you can have a Risk insurance also outside of pillar 3a take out a pillar 3a insurance policy. This means that you are not tied to a pillar 3a insurance policy. This can mean having to make payments into a product until retirement age.
This is just my opinion and your situation should always be considered individually. Independent counselling can help you.
However, it is best not to go to an insurance broker 😉
You don't ask your hairdresser if you need a haircut.
Here is another good article by Cash Review to that.
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As promised, you will now learn another Third variant for your pillar 3a.
In addition to the pillar 3a bank or insurance solution, there is also the pillar 3a insurance solution. Solution with securities.
You can invest in shares in pillar 3a and even do so in a tax-optimised manner. For young people this is a particularly exciting opportunity.
Because if you have a pension plan for your Pillar 3a long time horizon you can also use it to create a profitable risk to go into. Studies show that for long-term, broadly diversified investments (from a horizon of approx. 8 years) in the past. never lost money was.
In pillar 3a, depending on your age, you easily have 20, 30 or even more years until you withdraw your money again. Accordingly, you can Build up assets in pillar 3a with shareswhich even Exceeds 1 million Swiss francsas shown in this video.
If this sounds too risky for you and you haven't had anything to do with shares before, you should check out this exciting contribution view
Furthermore, I would like to tell you that you do not have to invest 100 % of capital in shares. You can also invest only one Invest a small portion of your Pillar 3a in securities and let the rest earn interest on a normal bank account.
This works wonderfully with the following providers, you can use them Compare here.
So don't ask yourself the question: Pillar 3a bank or insurance or custody account. Ideally, you should create a mix that is suitable for you. Flexible to your circumstances can be adjusted. (It is best not to take out insurance for this via pillar 3a).
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Finances are always individual and it is not possible to give a blanket right answer for everyone here. You are probably best placed to say whether a pillar 3a bank or insurance solution or a custody account is better for you, knowing your situation and goals.
If you want to take out a pillar 3a insurance policy, First find out about the long-term consequences. Keyword Repurchase value.
Depending on your risk situation, age and time horizon, you can choose a Mixture of securities and account solution take a closer look. Here you will find a good overview.
If you have any questions or input for other readers, feel free to share them in the comments!
In my opinion, pillar 3a only makes sense a few years before retirement and even then it has disadvantages. The advantage is de facto only the tax savings when paying in. But if, for example, you have tax savings of 15 % in the year of payment and still have 30 years until retirement, these savings amount to 1/2 per cent per year. This does not even take into account the fact that (currently even lower) taxes are due again when the pension is paid out. And even this lower taxation on payout is currently under discussion. The Minister of Finance wants to change this as part of the savings package, and then the whole advantage will be in the bin. Investing your pillar 3a in securities is better in principle than just paying interest, but it has the disadvantage that you MUST sell these securities when you retire. If prices are poor, this can mean a loss. It is therefore better to invest independently in securities (especially shares, ETFs) and can then sell them at your own discretion, regardless of your age. Pillar 3a as insurance is, as you write anyway, nonsense, savings and insurance belong separately.
Thanks for your comment, Gerhard!
Pillar 3a does indeed offer tax advantages in the long term, which can be maximised with the right planning (e.g. staggering the payout). The discussion about taxation is ongoing, but has not yet been realised (personally, I don't think it will happen).
Holding securities in the 3a harbours risks in terms of payout, but the long-term potential remains high - especially for wealth accumulation.
Hi Eric, I wanted to point out that the longer it takes to retire, the lower the tax advantage. As described, if I save 15 % in tax this year, but only reach retirement age in 15 years, I effectively have a (tax) return of only 1 % p.a., and then there's the payout tax on top of that. So it's unprofitable. It's better to hold securities - I only invest in shares, by the way - in a private custody account. But if you save 15 % in tax 3 years before retirement age, for example, the tax return is 5 %, which is good. I myself only hold shares in a private portfolio, broadly diversified across 30 - 35 stocks and have been on the winning side for many years.
Hi Gerhard,
Payments into pillar 3a are deducted directly from taxable income.
I would look at the tax return the way you do, especially for voluntary pension fund purchases.
In addition: Soon Voluntary purchases into pillar 3a possible.
My husband has 4 pillar 3a accounts, 3 of them with 2 different insurance companies. We are only 30 and he has been paying into them for about 11 years. Logically, we would lose money if we closed them, but I wonder if it still makes sense so that we don't pay even more tax when we withdraw? Can you help us with this? Or who is the best person to ask? Another question: my banker told me that Pillar 3a accounts should be filled up to a maximum of 50,000. Is that right? How many accounts are you allowed to have? Thank you very much for the answers 😊
Dear Celina,
Unfortunately, the issue with 3a policies is often very unpleasant, as high fees are incurred. Nevertheless, it can often be worthwhile to bite the bullet ... but it should always be considered and calculated individually. It is best to look for an independent financial advisor who does not receive any commissions, but is simply paid per hour.
Otherwise you will quickly be sold the next product ...
Regarding graduation: Rules of thumb such as 50,000 are widespread and actually always wrong, but they do provide a guideline. Here you will find concrete calculations and a guide to the 3a scale.