Discover The Benefits Of A Swiss Third Pillar Savings Plan
Find out everything you need to know about the three pillar pension system in Switzerland and how a Swiss third pillar savings plan can improve your retirement.
The Swiss pension system has rightly earned a reputation as one of the best in the world thanks to its reliability and stability.
Carefully designed to enable individuals to enjoy the best possible quality of life during retirement, the three pillar pension system in Switzerland offers a strong framework upon which retirees can build financial security and maintain it in the long term.
In this guide to life insurance in Switzerland, you’ll learn more about how the Swiss pension system works, and how individuals can take advantage of a Swiss third pillar savings plan to improve their lifestyle after leaving work.
How Does The Three Pillar Pension System in Switzerland Work?
In Switzerland, the state, employer, and individual all work together to ensure that retirees can enjoy the best possible standard of life during retirement.
The State takes responsibility for Pillar 1 by providing a pension plan and disability benefits in order to ensure that retirees can enjoy a basic living standard.
Pillar 2 is the responsibility of the employer, providing a professional compulsory pension plan that combines with the first pillar’s benefits to make retirement more comfortable.
This pillar also includes disability, death, and accident insurance as well as an optional scheme that offers compensation for any loss of income due to illness.
Pillar 3 is the responsibility of the individual to arrange, and this is where the Swiss third pillar savings plan comes into play.
Individuals pay into their own voluntary pension plan to ensure they have enough money to enjoy a comfortable retirement, and benefit from an excellent tax discount on their contributions of between 25% and 45%, meaning that they can enjoy higher returns than on any other type of investment.
What Is A Swiss Third Pillar Savings Plan?
The Swiss third pillar savings plan has two variants – 3A and 3B.
Pillar 3A plans are only available to those who are currently contributing to a professional pillar 2 pension plan and there is a cap on the maximum amount that can be contributed each year.
Pillar 3B plans are available to anyone through an insurance plan, even those who have not worked or who have multiple employers, and there is no cap on annual contributions.
3B plans are also more flexible since the capital in the plan can be withdrawn at any time and for any purpose.
Why Invest In A 3B Swiss Third Pillar Savings Plan?
Investing in a 3B Swiss third pillar savings plan offers many benefits for the individual thanks to its ability to be tailored to meet each individual’s personal investment strategies, timeframes, goals, and attitude to risk.
Since 3B plans are open to everyone under any circumstances, they are also a good choice for those who are not eligible for a 3A plan.