I bought a UBS Pillar 3A cash account last year (full amount) and still waiting for the tax back.


I've heard bad things about the insurance products, for people who want to withdraw early (e.g. if they leave the country).


UBS now offer an investment portfolio for 3A funds which I need to research more, but they look OK. They do charge high fees though, I think I saw a 3% initial charge.


Overall.. I regret putting the money into the 3A as I missed out on the whopper exchange rate the following January, against GBP (I exchanged all my savings over at that point). But... if I get my tax back in a timely fashion I'm happy. I probably won't put any more in the 3A this year.

Thanks for reply, Meloncollie. What about making extra contributions to a DB plan? My US tax guy told me the only real way of lower my US taxes would be to lower my net income, which I presume extra contributions would do. Have you heard anything about this?

Also, what, if any, tax benefit do you get from being in a low-tax Gemeinde? We've thought about moving in the past, but given my 2013 experience, I can't see that we would gain much. Plus, while I am somewhat annoyed by Swiss taxes, I find cutting a check to the US govenment hugely infuriating. (At least the Swiss are doing something with my tax "dollars" that benefits me.)

RE passport, yes, I've thought about dumping it often, especially given that I have an EU one, but I don't feel like enough of a "1-percenter" to justify it, nor am I ready to admit that I would retire here.

Always pay by fixed installments - something like a pension investment should be a long term plan with funds you aren't going to miss (unless it's something like a bonus or windfall).

By paying fixed installments it helps balance fluctuations in the market, and avoids backward looking "if only" feelings like this, for something which in any case you couldn't reliably predict (if you could, you'd already be retired a millionaire).

i don't believe paying monthly will make you more money in the end, markets go up more than down over time.

Well I am already retired at 53, so maybe I have a point.
My favourite fund www.fundsmith.eu was up 10.9% in Euros & 7.1% in £ in October, I prefer to be almost fully invested all the time, rather than believe the big crash is going to get worse.

I have a lot invested in stocks at the moment anyway (in usual broker account) and add when I see opportunities.

How much opportunity did you see 4-6 weeks ago when the markets were lower than today, when there was talk of a the crash becoming much bigger?
I don't know anyone who actually made money more than once with market timing, they usually sell much to early if they bought well.

I saw a lot and added another 10% in total


Market timing is a mugs game, but I add in bits, usually after a market fall, and I don't mind if the downtrend continues in the short term... I think I'm better at controlling my emotions these days after some experiencd

That wasn't my point - it was more that you normally receive money as a monthly salary, so investing it monthly also makes sense (unless there's a transaction fee, which isn't the case for most P3a investments I've seen).

You could also decide to always invest the full amount on January 1st each year, or any other date - equally valid if you have the funds handy.

Just don't kid yourself that market timing is going to make a reliable difference in the long term.

I think 2nd January is the time to invest as you have an extra 363 days of growth than if you invest on 31st December.

I don't believe in market timing, it does not work, I believe the longer money is invested the less fluctuations matter.

Avoiding AMT.

Plus the simplicity of only really having to worry about planning on the US side.

We know we cannot stay here post retirement so moved most of our investments back to the US. Again it's simpler, we focus on US tax consequences. Yes there is Swiss wealth tax but that is low enough not to be much of a burden.

If you think you are in Switzerland for the long haul (whatever that is; we have been here 17 years but still must think of this as only a temporary stop), you might take a different view, keeping more assets here.

FYI, OH had a 3A through OH's company that he set up when we first arrived, without much thought. I say had, past tense, because he got kicked out of the plan when the fund decided that having Americans particpate limited investment options and so told him to take a hike. That account had close to a zero return once you factor in taxes paid to Uncle Sam and the US accountant's fees to deal with the headache that a non-qualifying pension account brings.

All in all, not a good investment for a US citizen.


But as always: YMMV.

I have come to the conclusion not to rush into an insurance account. I now want to max out my 3rd pillar allowance for this year in a cash account.

Can anyone tell me what is a good interest rate for a cash account? On en.comparis.ch I cannot see a specific part for 3rd pillar cash accounts, only insurance. Any idea where I can find information comparing these accounts?

Comparis only shows cash interest accounts, which is what you want !

Just put your year of birth in here and follow the instructions - ca. 1% is the answer.

https://en.comparis.ch/saeule-3a/default.aspx

This is true but my main point is, by locking the money away in a 3A pension means that you can lose out on other opportunities that may appear (e.g. the SNB dropping the cap in January). I can safely say that had I not put it in the 3A account, I would've exchanged all of it to GBP (as I transferred everything I had).


Obviously it's impossible to predict but other opportunities will always appear at some point - whether it's a market crash or whatever. The 3A limits your ability to exploit them.


The fixed instalments thing makes sense to some people, but I only see the advantage if you're talking about buying stocks etc. - you can get an average price over time, limiting a potential 'buy high, sell low' situation

Sorry, I thought they were insurance policies.

So I assume I can take the whole lot out, and put it in another account if I get a better deal in another year?

Quick question:

How does it work the tax free with 3rd pillar when I have Quellensteuer?

You declare tax.

Read https://www.vorsorge-3a.ch/vorsorge-saeule-3a.html

Best will be to ask you Steueramt at your local Gemeinde. I believe you will have to file if they decide to allow it.

Age 28 (relevant for "acceptable risk" level I guess, i.e. stocks vs. bonds)
Want to invest my 3a pillar into an index (tracking, i.e. passive) fund
Identified as best options so far (i.e. highest stocks proportion, lowest TER):
a) PostFinance Pension 75, TER 0.90%
b) Raiffeisen Pension Growth I 67%, TER 0.87%

My current bank, UBS, has horribly high TERs because of active management.

I did find the following list but not sure what is available for me from Basel Stadt:
http://www.mustachianpost.com/2016/1...mmission-fees/

Advice?

Buy a property

All pillar 3a options suck and offer measly returns. The main profit generating thing for you here is just the big tax break you get on putting the money in. Afterwards it's the banksters who get most of the profits from your money. But you still have an easy way out with real estate.

Still better than leaving it just under savings account (0.5% interest).
I have around 17k in it and want to put it to a bit of work.

Don't want to (also can't) buy property at the moment.