Some cantons have other requirements. For example in the year you retire, they expect you to pay by the day before your birthday otherwise it can be lost.

Depends.

Ok I am in the process of opening a 3a and will contribute the max.

My wife is not working but thinking of doing one also in her name but a lower value. As hers is not tax deductable is a 3b a wiser option in this case?

Thanks

3a contributions are taxed on withdrawal. So if there is no tax deduction on contribution, then the scheme is usually not attractive.

Why would hers not be tax deductible?

Don't you file a return?

Tom

Tax deduction only possible from taxable income. Wife has no taxable income. Hence she cannot claim a deduction.

But as your incomes are combined when doing a return, does it matter?

Tom

Yes it does matter. Incomes are combined. But many deductions are individual.

Person claiming 3a deduction must have income on which s/he has paid AHV contributions. Permitted 3a deduction is 20% of amount on which AHV was paid. Maximum (changes slightly to reflect inflation) deduction is ca 6nnn for employees and 32nnn for self-employed or others not contributing to a pension plan.

does anybody know what the tax rates are for the withdrawal of 3a for funding a owner occupied property (in Kanton Zurich)

It depends on how much is in there. Its not a flat tax, but progressive. Here is an example by canton. (this is valid for pillar 2 and 3)

do you know where I can find this progressive tax table?

Here is a good one

thanks! but i was more looking for a table so I can do my own calcs and play around with some figures...

This isnt a table, but a calculator. You can enter how much money you have invested and where you live and it will tell you how much tax you will pay out. Why do you need a table?

so that it's more dynamic in my own calcs...

This is interesting information. I'm considering doing a Pillar 3a account for the deduction, but this year I think that 20% of my AHV contributions will *not* reach 6000. Therefore, if I understand correctly, it would be wiser to only create a Pillar 3a account with a smaller than the maximum permitted amount (namely, I should aim for only 20% of my total AHV contribution for this year)?

No, I think you misunderstand.

You pay in up to 6'739 (2013 limit). Whatever you pay in can be deducted from your taxable income by filing a tax return or claim form. Say your taxable income was 100'000 without the pillar 3, it now becomes 93'207, so you are taxed on less income. Assuming a simple tax rate of 15% you have saved 15%*6'739 = 1018.95 off your tax bill.

If your income is very low and you pay no or little tax, I believe you can still make the investment but you gain little or nothing in tax relief. You may find that you still get a better 'interest rate' deal than on other accounts - but consider that you can't easily cash-out when you want (it's more like holding long term bond).

If your income is very low it's probably a terrible investment as you get no tax relief & may have a tax liability later. I suspect its also a bad deal for most people most of the time.

If it deducts entirely as Jaudi says (which was how I thought it worked before reading the post about AHV), then I think it is worth it for me.

The tax rate is over 10% and as I'm probably not staying that long that is a good return for the time the money is going to be stuck there. It is also a "safe" return of 10%, which is not so easy to find. Depends a bit on how much tax I will pay for it when I get it back of course.

For people staying several years and if the returns on their chosen pillar 3a account are poor, I can see it being a bad deal though - then that 10% gets diluted over the duration those 6k are stuck.

It's taxable in payout, not tax free so the return will be below 10%..........

Yes, I understood that already, but I have a vague idea that the rate on the payouts is also lower (or maybe that is already because people wait until they don't have Swiss salaries any more to get it back).

I read on the forum about somehow moving the account to a lower tax canton (was it Zug? I don't remember) before leaving and putting each year's pillar 3a in a different account to reduce the liabilities. I'll definitely evaluate it carefully but I think for me it will be worth it.

Thanks everyone for the clarifications and help.