Pillar 3a: Tax Savings Through Smart Planning and Strategies 

Pillar 3a is a cornerstone of private retirement planning in Switzerland. It not only offers significant tax advantages when making contributions but also provides opportunities to optimise tax efficiency when withdrawing funds—if planned wisely. In a recent article by Manuel Boeck in The Market by NZZ, Michael Frei, Private Client Advisor at Tellco, shares insights into maximising the benefits of Pillar 3a: 

"Aligning Pillar 3a with your occupational pension and the state pension (AHV) ensures optimal retirement planning." 

Make Early Contributions for Maximum Returns 

Albert Einstein described compound interest as the "eighth wonder of the world." By making your Pillar 3a contributions at the beginning of the year, you gain an extended period to benefit from the compound interest effect, ultimately achieving higher returns. Additionally, early contributions immediately lower your tax burden for the current year. 

Staggered Withdrawals: A Key to Tax Efficiency 

One of the standout features of Pillar 3a is the flexibility in planning withdrawals. The capital withdrawal tax, applied when funds are accessed, is typically much lower than standard income tax and is progressive at both federal and cantonal levels. By staggering withdrawals, you can avoid tax spikes and significantly reduce your overall tax liability. 

Benefits of Account Splitting 

For balances exceeding approximately CHF 50,000, maintaining multiple Pillar 3a accounts becomes advantageous. This approach allows you to withdraw funds gradually over several years, effectively mitigating tax progression. These strategies are particularly beneficial in cantons with steep progressive tax systems. 

Starting in 2026, it will also be possible to make retrospective contributions to fill contribution gaps—a valuable option for individuals who have not consistently maximised their annual contributions. 

Key Tax Details to Keep in Mind 

A commonly overlooked aspect is that both federal and cantonal authorities combine all retirement withdrawals—whether from Pillar 3a, occupational pensions, or vested benefit accounts—within the same tax year. This also applies to withdrawals made by your spouse or registered partner. Strategic planning of withdrawal timing is crucial to avoiding unnecessary tax burdens. 

Conclusion: Plan Early and Strategically 

A well-crafted retirement strategy should include: 

• Early contributions to capitalise on compound interest. 

• Staggered withdrawals to manage and reduce tax progression. 

• Account splitting to achieve long-term tax savings. 

Start planning now to secure a financially stress-free future! 

For more insights, check out Manuel Boeck’s article in The Market by NZZ.