The 3rd pillar is private savings in Switzerland that complements theAVS and occupational benefits. It makes it possible to close the retirement income gap while offering tax advantages. It is divided into two main categories:
- Pillar 3a (linked) : Ideal for optimizing taxes, with annual contribution ceilings (CHF 7'258.- for employees in 2025, CHF 36'288.- for the self-employed). The funds are only available in specific cases (retirement, real estate purchase, etc.).
- Pillar 3b (free) : More flexible, with no contribution limit, but with fewer tax benefits. Funds can be withdrawn at any time.
Why use the 3rd pillar?
- Tax Optimization : Contributions to pillar 3a directly reduce taxable income.
- Preparing for Retirement : The first two pillars cover an average of 60-70% of the last salary.
- Flexibility : Pillar 3b makes it possible to supplement savings beyond the limits of pillar 3a.
Who Can Benefit from It?
- Swiss residents, border residents, foreigners with B or L permits.
The choice between pillar 3a and 3b depends on your financial needs and your personal situation. A combination of the two can maximize your tax savings and long-term savings.
Everything you need to know about the 3rd pillar in Switzerland ¦ ↘️ Taxes ↗️ Wealth
Types of 3rd Pillar: 3a vs. 3b
Now that the foundations of Pillar 3 have been laid, it is time to explore the two main options: Pillar 3a and Pillar 3b. Each option meets specific objectives and comes with distinct advantages depending on your financial situation and priorities. Let's dissect these two approaches to better understand their particularities.
Pillar 3a in detail
The Pillar 3a, often referred to as linked pension provision, is the cornerstone of private pension savings in Switzerland. This structured system offers attractive tax advantages, but also imposes some restrictions.
The Main Advantage Lies in the Tax deductions : every franc paid into pillar 3a directly reduces taxable income. For example, with a marginal tax rate of 30%, an annual contribution of CHF 7,258.- saves around CHF 2,177.- in taxes.
However, the Withdrawal conditions Are strict. The funds can only be released in specific cases, such as retirement, the purchase of a main residence, permanent departure from Switzerland or total disability. These rules ensure that the money stays spent on pension provision.
As for Investment options, they vary between institutions. Banks generally offer savings accounts with modest rates (currently between 0.25% and 1.5%), while insurance companies offer fund-linked products, which can offer higher returns, but with an increased level of risk.
Pillar 3b in detail
Unlike pillar 3a, the Pillar 3b, or free pension, is distinguished by its great flexibility. This option is ideal for those who want to save beyond the limits of pillar 3a or who prefer to keep free access to their savings.
With pillar 3b, you can get your funds back at any time, with no conditions or penalties. This makes it a practical solution for building an emergency reserve or financing medium-term projects.
In terms ofTax benefits, these are more modest and vary from canton to canton. For example, some cantons such as Geneva or Fribourg offer partial deductions for life insurance premiums linked to pillar 3b, but these benefits are significantly lower than those of pillar 3a.
Les Investment opportunities are also helping. You can opt for life insurance, funds, stocks, stocks, bonds, or even real estate investments. This diversity allows you to personalize your strategy according to your risk tolerance and goals.
Comparing Pillar 3a vs. Pillar 3b
The choice between these two options depends primarily on your priorities. If your main objective is to optimize your taxes while preparing for retirement, pillar 3a is essential. Once this ceiling is reached, pillar 3b becomes an interesting solution for saving more while maintaining total flexibility.
Many People Adopt a Combined Strategy : they first maximize their contributions to pillar 3a to benefit from tax advantages, then use pillar 3b to supplement their savings according to their liquidity needs. This approach makes it possible to take advantage of the strengths of both systems for an optimal balance between taxation and financial flexibility.
Tax advantages of the 3rd pillar
Tax benefits represent one of the main advantages of the 3rd pillar. Depending on whether you opt for pillar 3a or pillar 3b, tax benefits can vary, giving you the opportunity to adjust your strategy while planning for retirement.
How tax deductions work
The Pillar 3a is particularly interesting from a fiscal point of view. The amounts you pay into a 3a account or policy are fully deductible from your taxable income. This deduction applies directly to your tax return for the current year, which immediately reduces your taxes. In addition, the funds accumulated in pillar 3a benefit from increased tax treatment: they are not subject to income tax or wealth tax for the duration of the contract.
The Pillar 3b, on the other hand, follows different tax rules. In general, contributions are not deductible from taxable income. However, 3b insurance premiums may sometimes be included in the standard deduction applicable to insurance premiums. Unlike pillar 3a, pillar 3b assets must be declared as part of your assets and are therefore subject to wealth tax.
For the Border Workers, the situation may be more complicated. Tax treaties between Switzerland and your country of residence influence how the benefits of pillar 3a are applied. It is highly recommended that you consult an experienced tax advisor to clarify the rules specific to your case.
Contribution Limits and Rules
After exploring the tax benefits, let's look at the contribution limits of pillar 3a. These Ceilings, Set Each Year by the Swiss Confederation, depends on your professional status. They determine the maximum amount you can invest while taking advantage of Pillar 3a tax deductions.
Annual contribution limits
En 2025, employees affiliated to a pension fund can contribute up to CHF 7'258 In a pillar 3a account. This amount is an annual maximum per person, even if you have several 3a accounts.
You have the freedom to choose how to allocate your payments. You Can Pay All at Once, Opt for Monthly Payments of Around CHF 605, or adjust your contributions according to your financial situation, as long as you respect the annual limit.
Limits for Self-Employed Workers
For self-employed persons who are not members of a pension fund, the rules are different. In 2025, they can contribute up to CHF 36'288, or 20% of their net income, whichever is lower. For example, if your net income is CHF 200,000, your contribution limit will be CHF 36'288.
These ceilings make it possible to optimize your savings while benefiting from attractive tax advantages.
Choosing the right 3rd pillar solution with Best Third Pillar
Once you have entered the contribution limits and tax benefits associated with the 3rd pillar, the next step is to select the solution that best fits your situation. This decision requires a careful assessment of your financial goals and personal circumstances. These elements form the basis for taking full advantage of the specialized tools that we put at your disposal.
How to select your 3rd pillar solution
The choice between pillar 3a and pillar 3b depends on your priorities. If you want to optimize your tax deductions, pillar 3a is an ideal option. On the other hand, pillar 3b offers more flexibility, which can be interesting if your retirement horizon or tax situation requires a more flexible approach. In addition, for married couples, opening a 3a account each can double the potential tax savings.
Best Third Pillar Tools and Services
At Best Third Pillar, we offer practical tools to help you plan for your retirement. For example, our retirement calculator takes into account your personal situation, your long-term goals, as well as your family and economic context. You can also access unbiased and tailor-made comparisons of the various 3rd pillar products, allowing you to choose the most suitable solution for your profile. In addition, our free simulation helps you estimate your tax savings and visualize your future retirement capital.
Benefits of Personalized Financial Advice
In addition to these tools, we offer tailor-made support to refine your strategy. Our experienced advisors offer you consultations adapted to your needs, with regular follow-up and annual adjustments to maximize your contributions and tax savings. A dedicated consultant supports you from the very first stages, adjusting your plan according to the evolution of your needs and current regulations. In addition, these annual reviews make it possible to assess the costs associated with your solution, thus guaranteeing optimal management of your retirement capital over the long term.
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Conclusion: Key points for your 3rd pillar
Your decisions concerning the 3rd pillar play a central role in the success of your retirement strategy. In Switzerland, this pillar is a key element in your financial planning. By combining the tax advantages of pillar 3a with the flexibility of pillar 3b, you can reduce your taxes while building up capital for your retirement.
Chez Best Third Pillar, we provide you with free tools and tailor-made support to adjust your strategy, taking into account regulatory changes and your personal situation. Thanks to our pension calculator and the expertise of our advisors, you benefit from continuous monitoring to optimize your contributions and maximize your benefits.
Starting early and relying on professional support are crucial steps to take full advantage of your 3rd pillar and guarantee your financial security. To dive deeper into the subject, explore our dedicated resources.
FAQs
What are the tax advantages of pillar 3a compared to pillar 3b in Switzerland?
The tax advantages of pillar 3a and pillar 3b
The Pillar 3a is distinguished by attractive tax advantages. The contributions you make are deductible from your taxable income, which directly reduces your tax burden. Also, the earnings generated on this account, whether interest or returns, are not subject to tax as long as the money stays in the account. It is only at the time of withdrawal that taxes are applied, usually at a reduced rate.
In comparison, the Pillar 3b Is less fortunate from a fiscal point of view. Contributions are not deductible, and gains made during the term of the contract are taxable. In addition, when withdrawing, there is usually no tax exemption, except in very specific situations.
In summary, pillar 3a is a smart option for those who want to both save and optimize their taxation, whether in the short or long term.
Under what conditions can I withdraw my 3rd pillar before retirement age?
Early Withdrawal from the 3rd Pillar in Switzerland
In Switzerland, it is possible to withdraw funds from your 3rd Pillar Before the official retirement age, but only in certain specific situations:
- Acquisition or construction of your main residence : You can use your savings to finance your main home.
- Definitive Departure from Switzerland : This includes moving abroad to settle there permanently.
- Five Years Before the Legal AHV Retirement Age : From the age of 60 for men and 59 for women, a withdrawal is authorized.
- Disability : If a disability results in the payment of a disability pension, a withdrawal can be made.
- Significant Financial Difficulties : Under strict conditions, a withdrawal can be considered in case of serious financial problems.
These early withdrawal options are regulated by law and may have tax consequences. It is therefore essential to analyze your situation well and to take advice before acting.
How do I choose between pillar 3a and pillar 3b to optimize my retirement savings in Switzerland?
How can you optimize your retirement savings?
To get the most out of your retirement savings, it may be interesting to combine the benefits of Pillars 3a and 3b.
The Pillar 3a is particularly suitable if you want to reduce your tax burden while securing your savings through stable and long-term investments. For its part, the Pillar 3b Is distinguished by its flexibility: it allows you to adjust your investments according to your risk tolerance and your financial goals.
The right balance between these two pillars varies according to your personal situation. Your income, your retirement plans or your investment horizon are all factors to take into account. As a general rule, it is advisable to start by maximizing your contributions to pillar 3a, within the limits of the authorized annual limits. Then, pillar 3b can complement your savings by offering diversification options that are better suited to your specific needs.
