Diversifying your 3rd pillar assets is essential for Optimize your retirement savings and reduce the risks associated with market fluctuations. In Switzerland, the 3rd pillar offers tax benefits and is a powerful tool for preparing for your financial future. However, limiting yourself to a simple savings account can slow the growth of your capital because of low yields, often lower than inflation.
Here are the main options for Diversifying your 3rd pillar :
- 3a bank account : Secure but with low returns (0.5% - 1.5%). Ideal for a short time horizon (less than 10 years).
- 3a insurance policy : Combines savings and protection (returns 1% - 3%), but with less flexibility and high fees.
- Investment funds/ETF 3a : Higher return potential (3% - 7%) thanks to a diversified portfolio, recommended for a long time horizon (15 years or more).
Key strategy : Divide your investments between several products, adjust your portfolio according to your age and risk tolerance, and diversify by country and sector to maximize your returns.
To go further, use simulation tools and consult with experts to build a portfolio that is aligned with your financial goals.
Do your 3rd pillar: in Banking or Insurance?
Types of 3rd pillar products and how they work
To effectively manage your 3rd pillar, it is important to understand the various options available. Each product meets specific needs based on your investment horizon, risk tolerance and financial goals. Here is an overview of the main alternatives.
3a bank accounts
Les 3a savings accounts are the most secure solution. They guarantee your capital and are simple to manage, offering immediate liquidity without requiring constant monitoring. However, this security comes at a cost: returns are often low, generally less than 1.5% per year, which may not be enough to offset inflation in the long run.
This type of account is ideal for cautious investors or those who plan to use their funds in the near future, for example in the next 5 to 10 years.
3a insurance policies
3a life insurance policies combine retirement savings with death or disability coverage. In the event of death, they pay the accumulated capital as well as an additional sum insured. However, these products include fees (management, commissions, bonuses) that reduce net investment, while offering less flexibility with often strict exit conditions.
These policies are particularly suitable for people with significant family responsibilities who want to secure both their savings and financial protection. If you already have sufficient life insurance, this option may be less attractive from a financial point of view.
Investment funds and ETFs 3a
For those looking to grow their savings, investment funds and ETFs 3a are a more dynamic alternative. These products invest in a diversified portfolio that includes stocks, bonds and real estate, offering greater potential for growth. You can choose between a variety of investment strategies, ranging from defensive to bolder, and some funds automatically adjust their distribution according to your age.
These solutions are particularly suitable for investors with a long horizon (15 years or more) and a moderate to high risk tolerance. Over extended periods of time, market fluctuations tend to subside, increasing the chances of higher returns for your retirement.
Here is a comparative table of the main characteristics of each option:
For effective diversification, it may be a good idea to combine several of these products. This allows you to take advantage of the specific advantages of each option while minimizing their disadvantages, creating a balanced portfolio that is tailored to your financial goals.
How to diversify your 3rd pillar investments
To reduce risks and increase your returns, it is crucial to diversify your investments under the 3rd pillar. This doesn't mean simply choosing a unique product, but rather adopting a thoughtful strategy that balances market fluctuations while promoting growth. Here's how to align this approach with your goals and profile.
Adapt your assets to your age and risk tolerance
Age plays a key role in the distribution of your investments. If you have a long-term horizon, focus on growth assets such as equity funds or ETFs. On the other hand, as retirement approaches, it is a good idea to switch to safer products to protect your capital.
Your risk tolerance is just as important: it guides your choice between bolder investments or secure options. This strategy based on age and risk can be further strengthened by combining several products.
Combining different 3a products
Dividing your contributions across several types of 3rd pillar products is an effective way to diversify your investments. For example, you could invest part of it in long-term solutions that focus on growth, while putting the other part into a secure 3a account to ensure stability. This approach is particularly useful if you are considering a withdrawal to finance housing or other specific projects.
In addition, integrating a 3a insurance policy can enrich your portfolio by offering additional protection tailored to your personal needs. This combination of products can be further optimized through geographic and sectoral diversification.
Diversifying your investments by country and sector
Investing internationally is an effective way to limit the impact of local economic downturns. You can split your investments between Switzerland, Europe, Europe, the United States and other global markets. At the same time, diversify your investments in different sectors such as technology, health, finance or energy to avoid too much dependence on a specific field.
Global ETFs are a practical option for achieving this diversification. These funds bring together companies from several countries, thus offering a broad exposure while maintaining low management fees. Some investors also choose to include commodities or real estate funds to protect themselves against inflation.
To refine your diversification strategy and obtain recommendations adapted to your situation, the site Best Third Pillar offers free simulations to analyze your financial needs and retirement goals.
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Step-by-Step Process for Building a Diversified Portfolio
Building a diversified portfolio requires a thoughtful approach that is tailored to your needs and financial goals. Here are concrete steps to guide you through this process.
Assess your financial situation
Start by analyzing your financial situation in detail. Establish a balance sheet of your income, monthly expenses and savings capacity. For 2025, the maximum annual contribution to the 3rd pillar for employees is CHF 7'056. Take this ceiling into account in your calculations.
Also, think about your investment horizon: how long can you let your funds work before you need them? This point will directly influence your risk tolerance and investment choices. For example, if you plan to buy a home, an early withdrawal from your 3rd pillar may be necessary, which will impact your diversification strategy.
Choose the right combination of products
Once your profile is defined, divide your investments between different 3a products. Here is a suggestion for a balanced profile:
- 60% in investment funds or ETFs : These products offer global exposure to various markets and sectors. Opt for funds with management fees of less than 1% per year to maximize your long-term returns.
- 30% in a traditional 3a account : Although interest rates are low, this type of account provides welcome stability and can be used as a reserve for short-term projects.
- 10% in a 3a insurance policy : This option is particularly interesting if you have dependants, as it combines savings and coverage in case of the unexpected.
This distribution can be adjusted according to your specific needs. The key is to find a balance between growth, security, and flexibility.
Review and rebalance your investments
Make it a habit to review your wallet at least once a year. Analyze whether your asset allocation is still in line with your goals, risk tolerance, and market conditions. If necessary, make adjustments.
“Anyone who invests their 3a pension money in a widely diversified manner on the equity markets has a better chance of returning. Certainly, the risk of losing share prices increases with stocks. But those who stay invested for 15 years or more have virtually nothing to worry about.”
As you approach retirement, it's a good idea to reduce your exposure to risky assets and focus on more stable investments. This makes it possible to secure your earnings while continuing to benefit from some growth.
To go further and get advice adapted to your situation, Best Third Pillar offers free consultations with experts. These professionals can help you optimize your portfolio and adjust your strategy so that it fits your profile perfectly.
Common mistakes and best practices
Diversifying your 3rd pillar requires a certain amount of vigilance to avoid mistakes that could limit your long-term performance. Here's an overview of common pitfalls and strategies to avoid them.
Mistakes that can affect your returns
Avoid betting everything on one product. If you limit yourself to a traditional product with low returns, you may miss out on the opportunities that a diversified portfolio offers.
Adapt your strategy to your personal situation. For example, a young investor may take a bolder approach to maximize growth, while someone nearing retirement should opt for a more cautious strategy to limit risks.
Pay attention to management fees. High fees, especially on some 3a insurance policies, can significantly reduce your earnings in the long term. Always take the time to review the effective fee rate (TER) before choosing a product.
Take advantage of tax benefits. Respecting contribution limits allows you to maximize your tax savings. Don't let this advantage pass you by.
Don't panic about market fluctuations. Market declines are normal. Selling at these times can turn a temporary loss into a permanent loss. Keep a long-term perspective.
By avoiding these mistakes, you increase your chances of success.
Proven methods for success
Diversify according to your profile. A good distribution of investments can reduce risks. Your risk tolerance depends on your investment horizon, financial knowledge, and ability to manage losses.
Rebalance your portfolio regularly. Asset performance changes over time, which can unbalance your target allocation. Regularly adjusting your portfolio allows you to stay in line with your goals.
Optimize your contributions for tax purposes. Plan your payments to get the most out of tax deductions. Careful scheduling can maximize your benefits.
Combine different 3a products. By diversifying your solutions, you gain flexibility. This makes it possible to adapt your withdrawals to your future needs and to changes in the tax framework.
Take a long-term view. Markets can fluctuate in the short term, but maintaining your investments over multiple cycles increases your chances of generating solid returns.
For personalized support, consult the experts at Best Third Pillar. They will analyze your situation and help you optimize your strategy based on your age, goals, and risk tolerance.
Conclusion: Building long-term financial security
To guarantee a peaceful retirement while taking advantage of tax advantages, diversifying your 3rd pillar is an essential step. By combining different solutions, such as 3a bank accounts, insurance policies and investment funds, you spread risks while increasing your chances of return.
Your strategy should evolve with you. When you are young, choosing dynamic investments can offer greater potential for growth. As you get closer to retirement, a more careful approach makes sense to secure your assets. Always adapt your choices to your goals, risk tolerance, and personal circumstances.
The tax advantages of the 3rd pillar are not negligible: they reduce your tax burden while strengthening your retirement savings. Starting early is especially beneficial. Even small, regular contributions, accumulated over years, can produce impressive results thanks to compound interest.
To go further, do not hesitate to ask for personalized advice. The experts of Best Third Pillar can support you free of charge with a simulation adapted to your needs. You'll get a clear picture of your potential tax savings and your retirement capital, helping you optimize your strategy.
In short, well-thought-out and structured diversification turns your savings into a real lever for a comfortable and sustainable retirement.
FAQs
What are the tax advantages of the 3rd pillar in Switzerland and how can these benefits be maximized?
In Switzerland, the 3rd pillar, and more particularly pillar 3a, allows you to benefit from significant tax cuts. The contributions you make each year are deductible from your taxable income, which can significantly reduce your tax burden. It is an interesting solution for combining financial optimization and preparing for your retirement.
Maximum amounts deductible in 2025
- Employees affiliated to a pension fund : CHF 7'258 per year.
- Unaffiliated freelancers : CHF 36,288 per year (or up to 20% of net income).
To take full advantage of these benefits, it is a good idea to contribute up to the authorized limit each year.
Tip for maximizing your tax savings
Adapt your contributions according to your financial goals and your personal situation. Careful planning will not only lower your taxes, but also secure your financial future.
How do I choose the ideal distribution between 3a bank accounts, insurance policies and funds/ETFs according to my investor profile?
To determine the best distribution between 3a bank accounts, insurance policies and Funds/ETFs, it is essential to consider three key elements: your risk tolerance, your investment horizon and your financial goals.
- 3a bank accounts : These accounts guarantee great security, but the returns they offer are often modest, sometimes even lower than the inflation rate. They are particularly suitable for people looking for a careful and risk-free approach.
- Insurance policies : They include coverage for risks such as disability or death. However, they can be redundant if your needs are already met by AI and the 2nd pillar.
- Funds/ETFs : These products make it possible to invest in a wide range of assets (shares, bonds, real estate, etc.), with the potential for higher returns. They are best suited to investors who are ready to accept market fluctuations and have a long-term investment horizon.
If you have a good risk tolerance and plan for the long term, investing more in equities through funds or ETFs could be an attractive strategy. To define a balance that fits your needs, it is always useful to consult a specialist. An expert will be able to assess your personal situation and guide you to the most appropriate choices.
What are the main risks associated with investments in funds or ETFs for the 3rd pillar, and how can they be effectively reduced?
Investing in 3rd pillar funds or ETFs can offer attractive opportunities in terms of return, but it also comes with risks, in particular financial market fluctuations that can influence the value of your investments. Unlike a 3a savings account with a fixed interest rate, these products evolve according to market performance.
To better manage these risks, here are a few key things to consider:
- Diversifying investments : Distributing your investments across several sectors or assets helps to mitigate the impact of declines in a specific area.
- Strategy adapted to your profile : Consider your risk tolerance, investment horizon, and ability to manage potential losses.
- Fee analysis : Comparing the costs of different providers can help you reduce expenses and maximize your net returns.
Passive funds, which follow a market index, often offer a simpler and less expensive solution in terms of management. Ultimately, carefully thought-out planning that is aligned with your personal goals is critical to building a solid financial future while limiting risks.
