As a self-employed person in Switzerland, preparing for retirement is essential, as you are not automatically affiliated with the 2nd pillar. Here are the key points to remember:
- Insufficient AVS alone : The maximum AHV pension in 2025 is CHF 2'520 per month for a single person. This amount is often not enough to maintain a comfortable standard of living.
- Indispensable 3rd pillar : Pillar 3a allows you to save while reducing your taxes through tax deductions.
- Financial valuation : Take stock of your assets, debts and future needs. Plan between 60 and 80% of your current income to live in retirement.
- Diversification and follow-up : Combine traditional savings and investments, and adjust your plan each year according to your income or personal changes.
In summary, a solid retirement plan is based on regular evaluation, optimal use of tax benefits, and thoughtful management of the three pillars. Start today to ensure a peaceful retirement.
Everything you need to know about the 3rd pillar in Switzerland ¦ ↘️ Taxes ↗️ Wealth
Assess your financial situation and retirement needs
Before planning for retirement, it is essential to fully understand your current financial situation. It is the basis for effective planning. Once this step is completed, you can identify potential gaps and adjust your plans as your situation evolves.
Calculate your assets and debts
Start by drawing up a detailed summary. List your assets: bank accounts, investments, real estate, vehicles, and pension assets. Also remember to check the amount accumulated on your individual AVS account via the website of the Compensation center.
On the debt side, include mortgages, consumer loans, or business debts, if you are self-employed. The difference between your assets and your liabilities is your net wealth, a key indicator for planning your retirement.
If you are self-employed, remember to also assess the value of your business. Many rely on selling their business to fund their retirement, but this option involves risks that are crucial to anticipate.
Estimate your retirement needs with financial tools
Once your balance sheet is established, project your future financial needs. In general, it is advisable to plan between 60 and 80% of your current income to maintain a similar standard of living in retirement.
Start by evaluating your predictable income: the AHV pension (maximum CHF 2'520 per month for a single person), your 2nd pillar assets (if you contributed to it), and the income from your investments. The difference between this income and your estimated needs represents the amount you will need to cover with your personal savings.
Of online simulators can help you visualize the evolution of your economies in different scenarios. These tools take into account variables such as inflation, returns, and your contributions, to provide you with a realistic projection.
Test several hypotheses, such as different retirement ages or income variations, to identify the strategy that best fits your situation.
Adapt your plans to your circumstances
Your retirement plan should evolve with your situation. If you are self-employed, your income may fluctuate, requiring regular adjustments to your savings.
Review your plan at least once a year, for example when preparing your tax return. This is a good opportunity to assess your finances over the past year and to decide what contributions to make for the following year.
Some events, such as a wedding, divorce, birth, or real estate purchase, require an immediate review of your strategy. A financially favorable year could be an opportunity to increase your contributions, while a difficult period could require them to be reduced.
Finally, consider legislative changes, such as reform REVIEW 21, which can influence your choices. By staying informed, you can adjust your planning to stay in line with your goals.
These regular reviews allow you to stay on track, even in the face of the unexpected, and to optimize your chances of reaching a peaceful retirement, despite the risks associated with self-employment status.
How to use the 3rd Swiss pillar as a self-employed person
The 3rd pillar is a valuable tool for preparing for retirement while benefiting from tax advantages. As a self-employed person, you have access to specific conditions that allow you to build retirement savings adapted to your needs. With thoughtful management, this instrument can fill possible revenue gaps in the future.
3rd pillar A vs. 3rd pillar B: what's the difference?
The Swiss system offers two types of 3rd pillar: pillar 3a and pillar 3b. Each meets different needs and has distinct benefits. Here is a summary of the main differences:
If you are not a member of a pension fund, pillar 3a allows you to contribute up to the annual ceiling provided for by law, while benefiting from a full deduction from your taxable income. Pillar 3b, on the other hand, offers more flexibility for savings and withdrawals, although its tax advantages are generally less attractive and depend on your canton of residence.
Reduce your taxes thanks to 3rd pillar contributions
Pillar 3a contributions are particularly effective in reducing your taxable income. At the time of withdrawal, the funds are taxed at a preferential rate, which can represent a significant tax saving in the long run. For self-employed people with high incomes, this tax advantage can add up significantly over the years, strengthening your financial security for retirement.
How to open and manage your 3rd pillar account
Opening a 3rd pillar account is simple, but choosing the product requires careful consideration. You can opt for a traditional savings account or an investment solution that offers the potential for higher returns.
- 3a savings account : Please contact your bank to open an account. Conditions, such as interest rates, vary by institution.
- Investment solutions : These options allow you to invest your contributions in diversified portfolios (shares, bonds, etc.). Although subject to management fees, they generally offer better prospects for long-term returns.
Tools like those offered by” Best Third Pillar ” can help you make an informed choice. Their free simulation assesses the impact of different strategies taking into account your risk profile, investment horizon and financial goals.
Once your account is open, you can automate your transfers or make one-time payments, depending on your preferences. Remember to monitor the evolution of your investments regularly — a half-yearly check is often sufficient to adjust your strategy if necessary. You can also spread your contributions across several 3rd pillar accounts at different institutions, while respecting the overall ceiling. This approach can optimize tax management when you retire.
Building a comprehensive retirement strategy
Once your financial assessment has been completed, it is essential to develop a retirement strategy that coordinates the various pillars to optimize your future income and limit risks. This integrated approach aims to balance financial security and performance.
How to coordinate the three pillars of pension provision
The key to a successful retirement strategy lies in the harmonious management of the three pillars:
- The 1st pillar (AHV/AI) is a basic pension, but it is generally not enough to maintain your standard of living. As a self-employed person, your AHV contributions are directly linked to your income.
- The 2nd pillar, although optional for the self-employed, may be an interesting option. By joining it voluntarily, you not only benefit from additional savings for retirement, but also from tax advantages. For those with high incomes, this membership can be combined with maximum contributions to the 3rd pillar in order to reduce the tax burden while strengthening their financial security.
- The 3rd pillar, on the other hand, offers flexible savings and investment solutions. It is particularly useful to complement the benefits of the first two pillars and to adapt your strategy to your personal goals.
Once the foundations are in place, it is crucial to focus on diversification, which plays a central role in the strength of your retirement plan.
Why diversification matters in retirement planning
Diversification is much more than a simple distribution of investments; it involves a comprehensive approach to limit risks and adapt to economic or regulatory contingencies.
- Diversification of asset classes : As part of the 3rd pillar, it may be wise to combine secure investments with more dynamic portfolios, such as equity funds. This makes it possible to aim for long-term growth while maintaining a certain stability through bonds or savings accounts.
- Geographic diversification : 3rd pillar investment solutions often offer access to international markets. This reduces your dependence on the Swiss economy and distributes risks over a period of several decades.
- Complementary instruments : Consider tools like life insurance or other forms of savings. Although they do not have the same tax advantages as the official pillars, they offer valuable flexibility to deal with unforeseen events or finance projects before retirement.
Finally, effective diversification requires regular monitoring to ensure that your strategy stays in line with your goals.
Review and adjust your strategy every year
The life of a self-employed person is marked by fluctuations, and your retirement plan must evolve accordingly. An annual review is essential to adjust your contributions and investments.
- Adapt your contributions : If your income increases, take the opportunity to maximize your contributions to the 3rd pillar or consider joining the 2nd pillar. Conversely, in the event of a temporary decrease, adjust your efforts while maintaining a long-term vision.
- Follow regulatory changes : Investment limits and options are subject to change. Stay in the know to take advantage of new opportunities.
- Take personal changes into account : A marriage, a birth, or the purchase of real estate can change your financial priorities. These events often justify a rebalancing between retirement savings and liquidity.
Tools like those offered by Best Third Pillar can simplify your task. Their free simulator allows you to evaluate different scenarios based on your income and goals. These analyses help you adjust your strategy and make informed decisions year after year.
Tax planning and financial security for the self-employed
Taxation plays a key role in optimizing your retirement savings as a self-employed person. By understanding and applying tax rules, you can not only save on taxes, but also build a solid wealth for the future. Let's take a look at the main Swiss tax rules that influence your contributions and withdrawals.
Swiss tax rules for pension contributions
In Switzerland, the 3rd pillar offers interesting tax advantages, especially for self-employed people without a 2nd pillar. The amount you can deduct from your taxes is calculated based on a percentage of your net income, with an annual limit set by law. These deductions are valid on federal, cantonal and municipal taxes. In cantons where taxation is high, maximizing your contributions can significantly reduce your tax burden.
As a self-employed person, your income may fluctuate from year to year. It is therefore essential to adapt your contributions according to your financial situation. If a year is particularly prosperous, increasing your contributions can reduce your taxes while strengthening your savings. On the other hand, during more difficult years, you can temporarily reduce your contributions while maintaining a long-term vision. Remember that to benefit from tax deductions, your contributions must be made before December 31 of the current year.
Tax rules for 3rd pillar withdrawals
Once your contributions have been optimized, it is just as important to plan your withdrawals well. Amounts withdrawn from the 3rd pillar are taxed separately from your other income, generally at a reduced rate. This rate depends on the amount withdrawn and the canton where you live.
To minimize the fiscal impact, staggering withdrawals can be an effective strategy. Rather than withdrawing all your capital at once, spreading withdrawals over several years allows you to take advantage of more advantageous tax brackets. However, if you are considering an early withdrawal — for example, to buy a home or start a business — know that it will be taxed immediately. This decision must be carefully considered, as it reduces the capital available for your retirement.
Finally, to maximize your tax benefits, it is a good idea to coordinate the deadlines of your 3rd pillar accounts and to adjust your strategy according to your needs.
Examples of tax savings and the importance of simulation
The tax savings associated with 3rd pillar contributions vary depending on several factors, including your income and your canton of residence. Thanks to progressive taxation, high incomes allow you to save more per franc contributed. Over the long term, these cumulative savings can represent a considerable sum.
To better understand potential savings and adjust your strategy, the simulation tools offered by Best Third Pillar are invaluable. They allow you to explore different scenarios based on your tax and retirement goals. Informed tax management is a central element in ensuring your financial security as a self-employed person.
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Conclusion: Stay committed and informed for your retirement
Start preparing for retirement today by assessing your financial situation, making the most of the 3rd pillar, and taking into account the coordination between the three pillars as well as fiscal aspects.
Your situation is never fixed: your income, your professional activity and regulations may change. It is therefore essential to adjust your strategies regularly, especially in the event of significant changes.
To stay up to date, check official resources frequently. They will allow you to follow developments that could have an impact on your contributions or your rights.
Calling on specialists remains a valuable solution to optimize your retirement plan. By adapting these strategies to your personal goals, you are building an approach that precisely meets your needs.
Best Third Pillar is at your side to support you throughout this process. Thanks to our free simulation tools and our personalized consultations, our experts analyze your situation in detail and offer you solutions adapted to your goals. We also provide annual monitoring and assistance with your tax returns, offering you constant support to adjust your strategy according to the evolution of your professional life and regulations.
In short, build your future today. By remaining active in managing your pension and by surrounding yourself with good advice, you are giving yourself the opportunity to fully enjoy your retirement with peace of mind and financial security.
FAQs
What tax advantages can self-employed persons derive from pillar 3a in Switzerland?
The tax advantages of pillar 3a for self-employed persons in Switzerland
In Switzerland, pillar 3a represents an interesting opportunity for self-employed people who want to optimize their taxation. They can deduct up to 20% of their net annual income, with a maximum limit of CHF 36,288 per year. This deduction directly reduces their taxable income, which results in lower taxes payable.
But that's not all! Beyond the immediate tax advantage, pillar 3a is also an excellent way to build up savings for retirement, while improving your financial situation over the long term. It is a solution that combines savings and fiscal optimization in an effective way.
How do I calculate the value of my business to prepare for my retirement as a self-employed person in Switzerland?
How to estimate the value of your business as a self-employed person in Switzerland?
To assess the value of your business, it is essential to consider the own capital invested, calculated as of December 31 of the contribution year. This includes your assets, long-term investments, and the ability of your business to generate revenue in the future.
Here are two common approaches to estimating this value:
- The discounted cash flow (DCF) method : This technique is based on expected future revenues, updated to reflect their current value. It allows you to measure the future profitability of your business.
- Comparison with similar businesses : By analyzing comparable companies on the market, you get a more accurate idea of the position of your business compared to your competitors.
These methods are not only used to put a number on the value of your business, but also to understand how it could contribute to your retirement. A well-made estimate helps you plan a retirement strategy tailored to your specific goals and needs.
What tools can I use to estimate my financial needs in retirement in Switzerland?
Estimating your financial needs in retirement
To prepare for your retirement in Switzerland, several practical tools can assist you in this process. These simulators are designed to help you assess future earnings, identify potential gaps, and adjust your financial planning.
Swiss financial institutions provide pension calculators adapted to local fiscal and social specificities. These tools allow you to test different scenarios, such as your desired income or retirement age, and to adjust your savings strategies according to your long-term goals.
Retirement planning is not a simple formality: it is an essential step in ensuring your financial security. Take the time to analyze your needs, and remember to review your strategy regularly so that it stays in line with your projects and priorities.
