Planning your retirement in Switzerland requires you to anticipate several aspects in order to optimize your finances. Here are the 7 key steps to maximize your savings through the three-pillar system (AVS, LPP, 3rd pillar):
- Define your goals : What is the starting age? What standard of living do you want to maintain?
- Choosing between pillar 3a and 3b : The 3a offers tax deductions, while the 3b is more flexible.
- Optimize your tax benefits : In 2025, contribute up to CHF 7,258 into the 3a to reduce your taxable income.
- Selecting the right product : Compare banks and insurance companies to maximize your returns.
- Plan your withdrawals intelligently : Staggered them to reduce taxes.
- Review your plan annually : Adjust your contributions and investments according to your needs.
- Preparing the succession : Ensure the protection of your loved ones with clear provisions.
Take action now, even with small contributions, can turn your retirement into a solid and serene project.
Do your 3rd pillar: in Banking or Insurance?
1. Define your retirement goals
Before starting your retirement savings plan, start by setting clear goals. These goals will help you focus your savings efforts and determine how much to contribute each month. A key step is also to think about when you want to retire in order to adjust your projections accordingly.
The age at which you plan to retire is the first decision to make. In Switzerland, the legal age is currently set at 65 for men and 64 for women, although harmonization is under discussion. If you want to leave earlier, for example at 60, you will have to compensate for the years without contributions by increasing your contributions now.
Another crucial point is the standard of living you want to maintain once you retire. An often-cited rule is to aim for around 70% of your last salary to maintain a similar level of living. For example, if you earn 80,000 CHF per year, you should expect a monthly income of around 4,667 CHF after retirement.
To refine your calculations, assess the gap between your financial needs and the benefits offered by AVS and LPP. Currently (in 2025), the AHV pays an average of CHF 2,520 per month. The LPP, depending on your pension fund and your years of contribution, can provide between 1,500 and 2,500 CHF monthly. This means that you may still have to make up a difference of 0 to 800 CHF per month, depending on your personal situation, via the third pillar or other private investments.
Simulation tools are very useful for estimating your savings needs. By entering information such as your age, earnings, desired starting age, and target capital, these simulators calculate the monthly amount to save. For example, at the age of 35, if you want to accumulate 200,000 CHF by the age of 65 with a return of 3%, you will have to save around 400 CHF per month.
By setting specific goals, you transform retirement savings into a concrete and achievable project. It will also make it easier for you to choose financial products adapted to your needs and your situation.
2. Choosing between pillar 3a and 3b
Once your goals are well defined, it is time to decide between pillar 3a and pillar 3b. This choice directly influences tax benefits, the flexibility of your savings and withdrawal conditions. Here is an overview of the strengths and particularities of each option.
The Pillar 3a is particularly interesting thanks to its significant tax advantages. However, it imposes strict rules regarding withdrawals, in order to ensure that savings remain intact until specific times, such as retirement age or specific situations (buying a home, moving abroad, etc.).
For its part, the Pillar 3b Offer a great flexibility. There is no contribution limit, and you can withdraw your funds at any time. On the other hand, the tax advantages it offers are more limited. If you are looking to optimize your savings, it is often recommended that you first maximize pillar 3a before turning to pillar 3b.
To get the most out of both systems, you may want to consider combine. This allows you to take advantage of the tax advantages of pillar 3a while enjoying the freedom that pillar 3b offers.
The balance between these two pillars will depend on your personal circumstances and financial priorities. Take the time to assess your needs before making your choice.
3. Optimizing tax benefits
Pillar 3a is one of the most effective ways to reduce your tax burden while saving for retirement. Every franc you contribute directly reduces your taxable income, which translates into immediate tax savings.
In 2025, employees can contribute up to CHF 7,258, while the self-employed, often without access to a second pillar, can deduct up to 20% of their net income. This difference allows the self-employed to partially compensate for the absence of a pension fund.
However, the tax impact depends heavily on your canton of residence and your tax bracket. To maximize these savings, it is useful to consult a tax expert or use online simulators to accurately calculate your benefits.
Contributing early in the year is a smart strategy because it allows your capital to generate returns over a longer period of time. In addition, adjusting your payments to your personal situation can further improve your savings. Your family status, place of residence, and other tax deductions play a key role in this optimization. Analysis tools can help you assess the fiscal impact of your contributions and identify adjustment opportunities.
Finally, the tax benefits do not end at the time of the contribution. Upon withdrawal, the accumulated capital is taxed separately from other income at a reduced rate. By spreading your withdrawals over several years, you can further minimize your tax burden and maximize your earnings.
4. Choosing the right product and provider
Opting for a banking or insurance solution for your pillar 3a directly influences your returns, your financial flexibility and the fees you will pay in the long term. This choice impacts not only the growth of your savings, but also the withdrawal conditions and associated costs. It is therefore crucial to consider the specific characteristics of each option before making a decision.
Les banking solutions stand out for their transparency on fees and their flexibility. You can opt for secure savings accounts or invest in diversified funds at often competitive costs. This type of solution is ideal if you want to keep control of your investments and adjust your portfolio according to market fluctuations.
For their part, the insurance solutions combine savings and protection, for example by including coverage in the event of death or disability. However, this double advantage comes with higher management fees and more restrictive withdrawal conditions. These solutions are more suitable for those looking for additional security in addition to their savings.
Once you've identified your priorities, carefully analyze the costs associated with each option: entry, management, and exit costs. Even seemingly small discrepancies can significantly reduce your capital in the long run. To avoid unpleasant surprises, ask for detailed simulations from several providers in order to compare offers.
Finally, don't underestimate the importance of a personalized support. A provider offering regular analyses, powerful simulation tools and online monitoring can help you adjust your savings strategy over time. Calling on an expert will allow you to choose a solution that is aligned with your goals and your personal situation.
5. Plan your withdrawals
How you withdraw your capital has a direct impact on your taxation. Thoughtful planning is key to maximizing what you will receive in retirement. Here is an overview of withdrawal strategies to consider.
Understanding withdrawal options
You have two main options: a one-time withdrawal or a withdrawal spread over several years. Opting for a single withdrawal means that all of your capital will be subject to progressive tax in the same year, which can result in a high tax burden. On the other hand, spreading your withdrawals allows you to benefit from lower tax rates on each individual amount.
The fiscal impact of staggering
Spreading your withdrawals over 3 to 5 years can reduce your total tax burden by 20% to 40%.
Let's take a concrete example: Daniel withdrew CHF 473,506 at once, which cost him around CHF 51,000 in taxes. Maria spread her withdrawals over two years and only paid CHF 31,000, saving more than CHF 20,000.
Optimize your withdrawal schedule
You can withdraw between five years before and five years after the regular AHV retirement age, as long as you continue to work. To take advantage of lower tax rates, plan your withdrawals based on the amount of pension capital you plan to withdraw.
Coordinate with the 2nd pillar
Once your withdrawal schedule has been optimized, coordinate the withdrawals of your 2nd and 3rd pillars to avoid cumulative taxation. If you withdraw capital from both pillars in the same year, the amounts are added together to calculate the tax. An effective strategy is to close your 3a accounts the year before you retire and then open a new account for the following year. This makes it possible to separate withdrawals from the two pillars for tax purposes.
Take account of cantonal specificities
Tax rates vary considerably from canton to canton. For example, in cantons like Schwyz or Zug, a withdrawal of CHF 100,000 can be taxed at a rate of 2 to 4%, while in Geneva or Vaud, this rate can increase to 10 or 12%. If you are considering moving, the timing can have a significant impact on your taxation.
Prepare your withdrawals administratively
Rigorous administrative preparation is essential. 3a accounts must be closed in full, as partial withdrawals are not allowed. To make it easier to spread, open multiple accounts early on. Contact your financial institutions well in advance to get the required forms.
For married couples, it is important to note that withdrawals made by both spouses during the same tax period are added together for tax purposes. Coordination between spouses can reduce overall household taxes.
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6. Revise your plan every year
Updating your 3rd pillar plan every year is essential to ensure that it remains adapted to your situation. Life is changing, and so are markets and regulations. What was relevant two years ago may no longer be relevant today. An annual review allows you to adjust your strategy according to these changes and to maximize the benefits of your 3rd pillar.
Identify changes in your personal life
Your personal and professional situation has a direct impact on your ability to contribute. For example, a salary increase could allow you to reach the maximum ceiling of CHF 7,258 for 2025. Conversely, a period of unemployment or a transition to part-time work could require a reduction in your contributions. Family events such as a marriage, divorce, or birth also influence your financial priorities.
A move can also have significant consequences. If you move from a canton like Geneva to a more tax-efficient canton like Zug, your tax savings on 3a contributions could increase considerably. This warrants a complete review of your strategy.
Adapting to new rules and regulations
Regulations related to the 3rd pillar change regularly. For example, contribution limits are adjusted annually, which may require your contributions to be updated. In addition, new investment options or changes in withdrawal conditions may offer opportunities for optimization.
Changes in cantonal or federal taxation can also influence the attractiveness of your investments. An annual review allows you to react quickly to these developments and take advantage of them before they are widely exploited.
Analyze the performance of your investments
If you have opted for a 3a securities account, regular monitoring of your investments is essential. A strategy that worked well during periods of market growth may become inadequate when there is volatility. Compare the performance of your accounts and assess whether a rebalancing between more conservative or more dynamic strategies is needed.
As retirement approaches, it is generally advisable to reduce risks. For example, if you are 55 and have a 100% equity portfolio, it may be time to diversify and opt for a more prudent allocation in order to protect accumulated capital.
Plan your withdrawals strategically
Adjusting your withdrawals is just as important as adjusting your contributions. As you get closer to retirement, start simulating different retirement scenarios. Five years before the AVS age, this planning becomes essential to optimize your taxation. For example, opening several 3a accounts can allow you to spread your withdrawals and reduce your tax burden.
Even if you only have one 3a account, it's not too late to open more. Even with only a few years of contributions, this could save you thousands of francs during the withdrawal phase.
Use simulation tools
Financial simulators are valuable tools to check if your current goals are in line with the real performance of your investments. Test different hypotheses, such as an increase in your contributions, a change in investment strategy, or a change in the withdrawal schedule. These simulations can reveal simple but effective adjustments to optimize your plan.
Integrate your 3rd pillar strategy into your tax planning
Your annual tax return is a great opportunity to adjust your strategy. Analyze the real fiscal impact of your contributions over the past year and adapt your contributions accordingly. If the tax savings aren't what you expected, identify the reasons and adjust your approach.
This coordination with your overall tax planning can also reveal opportunities, such as buyouts in your 2nd pillar or other tax strategies complementary to the 3rd pillar. This allows you to maximize your benefits while staying aligned with your long-term goals.
7. Succession planning and family protection
To optimize your 3rd pillar strategy, it is essential to anticipate the transmission of your assets in order to protect your loved ones and preserve your assets. Good planning not only ensures the financial security of your family, but it also ensures that your wishes are respected. Succession rules vary considerably between pillar 3a and pillar 3b, which makes rigorous organization essential.
Understanding the Pillar 3a inheritance rules
Pillar 3a is subject to a Order of beneficiaries established by law, offering little leeway to freely choose your heirs. This order gives priority first to the spouse or registered partner, followed by the children, then to other relatives according to specific criteria. This means that it is not possible, for example, to designate a nephew or another person outside of this order.
In addition, pillar 3a assets are not included in the inheritance in the strict sense. They are sent directly according to the procedures you have established with your pension institution. This specificity makes it crucial to fully understand the implications of these rules in order to avoid misunderstandings or conflicts.
Enjoy the freedom of pillar 3b
Pillar 3b, on the other hand, offers total flexibility in the designation of beneficiaries. You can freely choose who will receive your assets: a friend, an unmarried partner, or even a charitable organization. This makes it a particularly interesting solution for unmarried couples, who must formalize their choices to ensure that their wishes are respected.
With 3b insurance policies, you can change your beneficiaries at any time by means of a written statement, whether it is an amendment to the contract or a simple letter to your insurer. This flexibility allows you to adapt your choices according to the evolution of your personal or family situation.
The importance of legal documents
Even if pillar 3a assets are not part of traditional inheritance, it is still essential to have a Will or inheritance contract to organize the transmission of all your assets. These documents help to avoid confusion and ensure that the distribution is in accordance with your wishes.
Since January 1, 2023, the revision of Swiss inheritance law has changed reserved shares. The shares of the descendants have been reduced to half of their legal share, and those of the parents have been abolished. If your will dates from before this reform, it is crucial to update it to reflect your current intentions. For unmarried couples, only a will or an inheritance contract can guarantee that your partner will inherit according to your wishes.
In addition, the advance directives allow you to express your wishes concerning medical care in case of incapacity, thus strengthening the protection of your loved ones and your assets.
Take tax consequences into account
The transfer of 3rd pillar assets can have significant fiscal effects. For example, the cash value of policies is taken into account when calculating reserved shares. It is therefore important to incorporate this aspect into your estate planning to avoid unpleasant surprises.
Update your arrangements regularly
Your personal and professional situation evolves over time. Marriage, divorce, birth or death: every important event should be an opportunity to review your estate designations and documents. This is especially true for pillar 3b, where flexibility allows you to adjust your choices in real time. Also, make sure that your pension institutions have the most up-to-date information about your beneficiaries.
Finally, to guarantee the legal validity of your provisions, it is strongly recommended to consult a notary. Inheritance contracts must comply with specific formalities and be authenticated by two witnesses to avoid any subsequent dispute. This process gives you the peace of mind knowing that your wishes will be respected.
Conclusion
Planning your retirement with the 3rd Swiss pillar requires a thoughtful approach adapted to your specific needs. Les seven key steps mentioned offer a solid basis for developing a sustainable financial strategy.
Here is a reminder of the points discussed: define specific objectives to guide your savings, choose between pillar 3a and 3b according to your priorities (tax advantages for 3a, more freedom with 3b), take advantage of tax deductions to accelerate the growth of your capital, carefully select products and providers to maximize returns, carefully select products and providers to maximize returns, organize withdrawals to limit taxation, carry out annual monitoring to adjust your plan according to your situation, and finally, anticipate succession planning Oral to protect your loved ones.
This road map helps you move peacefully towards a peaceful retirement. The main thing? Start now, even with modest amounts, and adjust your strategy over the years. Every year counts, and time is on your side.
Don't wait any longer: apply these tips today and incorporate them into your annual routine. This is how you ensure a pension that is in line with your life goals.
FAQs
What are the main advantages and disadvantages of pillars 3a and 3b for planning my retirement in Switzerland?
The Pillar 3a is distinguished by attractive tax advantages, in particular the possibility of deducting contributions from your taxable income. In addition to this advantage, it guarantees greater security thanks to strict regulations. However, its main disadvantage lies in its lack of flexibility: the funds remain blocked until retirement, except in certain specific cases, such as the purchase of a home or a permanent departure from Switzerland.
Conversely, the Pillar 3b proves to be much more flexible. You can access your funds whenever you want and use them however you want, making them an ideal option for short to medium term projects. On the other hand, the tax benefits are more limited, although in some cantons, part of the contributions may be deductible. This pillar is particularly suitable for those who want a complementary or more flexible savings solution.
How can I maximize my tax savings thanks to pillar 3a in Switzerland?
Optimize your tax savings with pillar 3a
To reduce your taxes thanks to pillar 3a, start by contributing up to authorized annual limit (7,258 CHF in 2025 for employees). These contributions are fully deductible from your taxable income, which can significantly reduce your tax burden, depending on your canton, income level and the amount paid.
A few tips to maximize your tax benefits
- Pay your contributions at the beginning of the year : By doing this, you benefit longer from the interests or returns generated.
- Opt for several 3a accounts : This approach allows for staggered withdrawal at retirement, thus limiting taxation on withdrawn capital.
By adopting these strategies, you are not only optimizing your tax savings, but you are also preparing for a more serene retirement.
How can I plan my 3rd pillar withdrawals to reduce the tax impact in retirement as much as possible?
How to reduce the tax impact of your withdrawals from 3rd pillar ?
To avoid a heavy tax burden when withdrawing your 3rd pillar, it is recommended to spread these withdrawals over several calendar years. This strategy helps to reduce the effect of tax progressiveness, by preventing all of your savings from being taxed at a higher rate at once.
At the same time, it is essential to take into account the tax rates specific to your canton as well as the ceilings that apply to your personal situation. Early planning adapted to your needs, ideally carried out with the help of a tax expert, can not only optimize your savings, but also facilitate a smooth financial transition to retirement.
