Duration and amount
The period of savings on a 3rd pillar 3A is linked until retirement, i.e. 64 years for women and 65 for men.
It is possible to invest up to 7,056 francs per year for an employed person and up to 35,280 francs per year for a person with self-employed status.
Taxation and deductible amounts
The taxation of the 3rd pillar 3A is very advantageous, the amounts that you invest each year in your 3rd pillar are fully deductible from your taxable income:
- Up to CHF 7'056.- per year for an employed person
- Up to CHF 35'280.- per year for a self-employed person not affiliated to a pension fund (but at most 20% of net income)
The capital you have on your 3rd pillar does not enter into your taxable wealth and the withdrawal of capital is taxed at a special reduced rate. However, the amount of this tax will be much lower than the tax savings achieved through deductions throughout the term of the contract.
Withdrawal conditions
The 3rd pillar 3A is a savings method that was designed to build up capital for retirement, however there are 5 conditions that allow it to be withdrawn before retirement age:
- To finance the purchase of your main residence
- You become self-employed
- You are leaving Switzerland permanently
- As early as 5 years before retirement age
- If you become 100% disabled
Beneficiary clause
A 3rd pillar 3A placed in insurance also allows you to protect your loved ones, by providing them with capital in the event of death.
The beneficiaries of the 3rd pillar 3A in the event of death are appointed in a precise order:
- 1. Spouse (united by marriage)
- 2. Direct descendants and/or a partner with whom you have lived together for more than 5 years
- 3. The parents
- 4. The brothers and sisters
- 5. The other heirs
3rd pillar 3A or 3B which one to choose?
It is sometimes difficult to make a choice between these two types of 3rd pillar, especially if you live in the cantons of Geneva and Fribourg.
Here is a list of the important things you need to consider before making a decision:
- It is not very interesting to do a 3rd pillar 3B outside the cantons of Geneva or Fribourg, because you will not benefit from any tax advantages
- The 3rd pillar 3A is preferred for major projects: retirement, buying real estate, leaving abroad and starting out as a self-employed person, because you will benefit from higher tax deductions and these projects are part of the conditions for withdrawing from the 3A.
- The 3th pillar 3B can be used for more specific projects, as the duration and withdrawal conditions are free, you benefit from great flexibility that will allow you to dedicate this savings to projects that are important to you: buying a car, a trip, a trip, future investment or saving for your children, everything is possible.
If you don't have any specific savings plans in mind, you can open a 3B in addition to the 3A for major projects such as retirement, real estate, going abroad and becoming self-employed. This will allow you to reach your savings goals even more quickly while taking advantage of 3rd pillar 3B tax deductions in Geneva and Fribourg. - The 3rd pillar 3B offers tax deductions only for the 3rd pillars concluded in insurance (minimum 5 years of contract)
- It is possible to combine the tax deductions of a 3rd pillar 3A and a 3rd pillar 3B
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