Make Smart Use of Pillar 3a: Build Retirement Wealth Automatically with Standing Orders and the Cost-Average Effect

Make Smart Use of Pillar 3a: Build Retirement Wealth Automatically with Standing Orders and the Cost-Average Effect

Would you like to plan for your retirement regularly without having to think about it each time? A standing order into your Pillar 3a account makes it possible and comes with several advantages. By making monthly contributions, you invest automatically and benefit from the cost-average effect – a clever way to smooth out market fluctuations, curb emotional decision-making, and build long-term wealth.

In the picture: Michael Frei, Head of 3a Pensions & Vested Benefits at Tellco

What is the Cost-Average Effect?

By regularly investing the same amount into an investment fund, you end up buying at both high and low market prices. Over time, this results in an average purchase price. This approach helps you avoid overinvesting during expensive market phases and smooths out the effects of market volatility.

Why a Standing Order into Pillar 3a is Worthwhile

Instead of trying to time the market perfectly – something even professionals rarely succeed at – a standing order helps you focus on consistency and discipline. Month by month, you invest automatically, reducing the risk of emotional decisions during market turbulence.

Standing Order = Discipline + Wealth Building

A standing order brings structure and discipline to your retirement planning. Your contributions are made reliably into your Pillar 3a account – without you needing to remember each time. This consistency is key to building wealth over the long term, especially when combined with a well-diversified investment fund.

Thinking Long-Term Pays Off

The longer you stay invested, the more powerful two effects become: compound interest and capital growth. Even though markets may fluctuate in the short term, those who stay invested tend to benefit. With a long-term goal like retirement savings through Pillar 3a, staying calm and committed usually pays off.

Our Tip: Keep an Eye on Costs

One thing to watch out for: transaction fees. Frequent buying can become costly – but it doesn’t have to be. With our Tellco funds, you can invest from as little as CHF 100 and fully benefit from market performance – with no purchase fees. That way, more of your returns stay with you.