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Old 23.11.2018, 12:14
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Is pillar 3 useful for low-income family?

I just start working in Switzerland. with monthly income 5000 CHF
Since i live in VA and i have 2 children, my income tax is 1.6% = 78 CHF

If i pay 500 every month into pillar 3a,
Did i will save "monthly" only 8 CHF from the tax or 50 CHF? ( Is my total tax will change from 1.6% to 0.6%)

And if i will withdraw the money in the future, i must pay 5% tax?

Is withdrawing the money to buy a house, subject to tax ?

So, Is pillar 3a useful for low-income family?
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Old 23.11.2018, 15:17
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Re: Is pillar 3 useful for low-income family?

If you're paying such ridiculously low income tax, I wouldn't even consider the pillar 3a.

The only benefit of it is for tax savings.

I'd recommend, if you want a higher return than cash savings, to look at investing the money outside of any pension product.
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Old 23.11.2018, 15:38
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Re: Is pillar 3 useful for low-income family?

3a is interesting for the tax savings. But not only.

Firstly consider how much you can afford before you max it out each year. If you can only comfortably afford less...put a side less!

Its interesting as its safe. You could also take out an insurance, which depending on how long you plan to stay in Switzerland, could be interesting as you have a family which would have some protection if something terrible was to happen. And if you are new to investing or even saving its not a bad stepping stone to get you on your way, and once you start, you can find your way and find other interesting products.

I dont think you can really go wrong with third pillar. The bank account gives you complete flexibility so if you did stop paying and find a more interesting product, your money would sit there until you are 60 ish. If you go down the insurance policy route, with a family that is also interesting, dont max out the monthly payments, take it easy perhaps a couple of hundred a month.

And if there is any chance you wont be in Switzerland too long, I wouldnt bother at all with the third pillar, find another product
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Old 23.11.2018, 18:01
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Re: Is pillar 3 useful for low-income family?

First, pillar 3 consists of two part. Pillar 3a which is tax preferred and all the rest you own. Pilling up your pillar 3 is always a good idea. Pillar 3a on the other hand might not be worthwhile as all payouts are subject to payout tax. Regardless if you retire, buy a house, or leave the country.

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The bank account gives you complete flexibility so if you did stop paying and find a more interesting product, your money would sit there until you are 60 ish.
No need to let it rot. The money from the a pillar 3a bank account can be transferred into a pillar 3a fund investment.

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And if there is any chance you wont be in Switzerland too long, I wouldnt bother at all with the third pillar, find another product
Actually if you are here for just a few years pillar 3a can become very an attractive tax saving instrument.
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Old 23.11.2018, 18:18
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Re: Is pillar 3 useful for low-income family?

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I just start working in Switzerland. with monthly income 5000 CHF
Since i live in VA and i have 2 children, my income tax is 1.6% = 78 CHF
I think that that number is quite wrong.

Where did you get it from?

Tom
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Old 23.11.2018, 18:21
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Re: Is pillar 3 useful for low-income family?

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I think that that number is quite wrong.

Where did you get it from?
Virginia tax office.
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Old 24.11.2018, 04:46
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Re: Is pillar 3 useful for low-income family?

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I think that that number is quite wrong.

Where did you get it from?

Tom
in my salary slip (fiche de salaire):
L’impôt à la source = 78 CHF .

and i live in VD

I also used the calculator To be sure
https://fr.comparis.ch/steuern/quell.../quellensteuer

The result was :
Canton Vaud
Impôts par mois (CHF)
79
Impôts par an (CHF)
948

And in :

http://www.estv2.admin.ch/e/dienstle...er/2017/vd.php

Taxable income 33200 28500
Tax burden
Direct Federal Tax in CHF 0
Simple tax 931.18
- Cantonal tax in CHF 1.545 1438
- Communal tax in CHF (Orbe) 0.77 717
- Church tax in CHF 0 0
Total tax burden 2155
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Old 24.11.2018, 08:17
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Re: Is pillar 3 useful for low-income family?

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in my salary slip (fiche de salaire):
L’impôt à la source = 78 CHF .

and i live in VD

I also used the calculator To be sure
https://fr.comparis.ch/steuern/quell.../quellensteuer

The result was :
Canton Vaud
Impôts par mois (CHF)
79
Impôts par an (CHF)
948

And in :

http://www.estv2.admin.ch/e/dienstle...er/2017/vd.php

Taxable income 33200 28500
Tax burden
Direct Federal Tax in CHF 0
Simple tax 931.18
- Cantonal tax in CHF 1.545 1438
- Communal tax in CHF (Orbe) 0.77 717
- Church tax in CHF 0 0
Total tax burden 2155
You have made zero deductions for the second one, assumed deductions will be 10-15000.
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Old 24.11.2018, 09:17
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Re: Is pillar 3 useful for low-income family?

These CHF78 of tax at 5k salary gross make sense according to https://www.lohncomputer.ch/en/

What I wonder is how realistic it is to save CHF500 per month with a net income 4.3k and a 2+2 family.
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Old 24.11.2018, 21:19
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Re: Is pillar 3 useful for low-income family?

It is possible that the OP may receive income support:



Budget

Budget für 4 Person(en) in einem 4 Personen-Haushalt
Grundbedarf für den Lebensunterhalt Fr. 2110
Wohnkosten (Miete inkl. Nebenkosten) Fr. 1600
Gesundheitskosten Fr. 900
Erwerbsunkosten Fr. 500
Kosten für Kinderbetreuung Fr. 0
Total anrechenbarer Lebensbedarf Fr. 5110
Erwerbseinkommen Fr. -5000
Einkommen aus Sozialversicherungen und Bedarfsleistungen Fr. 0
Weitere Einkommen Fr. 0
Sozialhilfe Fr. 110
Laut den von Ihnen gemachten Angaben haben Sie zusammen mit Ihren Angehörigen Anrecht auf Sozialhilfe in der Höhe von 110 Franken pro Monat. Dieses Resultat ist ohne Gewähr. Den wirklichen Betrag, der Ihnen zusteht, kann nur der Sozialdienst Ihrer Gemeinde berechnen. Je nach dem kommen noch situationsbedingte Leistungen, ein Einkommensfreibetrag oder eine Integrationszulage hinzu. Der Grundbedarf von Personen, die nicht mit der Sozialbehörde kooperieren und ihre Verpflichtungen nicht einhalten, kann um bis zu 30% gekürzt werden.
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Old 26.11.2018, 08:32
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Re: Is pillar 3 useful for low-income family?

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It is possible that the OP may receive income support
Or might loose their permit instead.
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Old 26.11.2018, 13:51
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Re: Is pillar 3 useful for low-income family?

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These CHF78 of tax at 5k salary gross make sense according to https://www.lohncomputer.ch/en/

What I wonder is how realistic it is to save CHF500 per month with a net income 4.3k and a 2+2 family.
4300 + 500 ( VD pay 250 CHF for all children live in the canton )
-1200 Basic need for living
-120 Electricity + internet + 2 mobiles
-1400 Housing costs (rent incl. Additional costs )
-500 Health costs ( subsides approximately 400 chf, i wait the decision)
-500 Purchase expenses
-100 Transport
-180 Different tax (prime B, radio and dechet) and assurance fire, RC...

So we save 800 CHF every month

3600 CHF for holiday
6000 CHF is for long save (in a bank saving account or in pillar 3a if i can cut 50% of my 78 CHF TAX )
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Old 26.11.2018, 14:43
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Re: Is pillar 3 useful for low-income family?

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if i can cut 50% of my 78 CHF TAX [/B] )
You will save about 10% of your tax, so CHF 7.80/month.

And if you are getting subsidies, I doubt that you are even allowed to.

Tom
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Old 26.11.2018, 15:10
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Re: Is pillar 3 useful for low-income family?

Canton Vaud pays CHF 250 (from 2019: CHF 300) per child (if there are two children).
That makes you pay 143.00 of taxes instead of CHF78 because the child allowance adds up to one's income. Your total deductions (5k gross vs 5.5k gross) will increase by CHF 137 :-)

But not all is lost :-)
In canton Vaud there is yet another benefit which is supposedly not accounted as social help. Maybe your family could qualify.
Les prestations complémentaires cantonales pour familles (PC Familles)
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Old 26.11.2018, 17:43
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Re: Is pillar 3 useful for low-income family?

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4300 + 500 ( VD pay 250 CHF for all children live in the canton )
-1200 Basic need for living
So, social help estimates a 2+2 family needs CHF 2110 and're undercutting them by CHF 900. Well, unless your family lives in poverty now, that doesn't sound like a viable plan.
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Old 26.11.2018, 22:17
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Re: Is pillar 3 useful for low-income family?

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So, social help estimates a 2+2 family needs CHF 2110 and're undercutting them by CHF 900. Well, unless your family lives in poverty now, that doesn't sound like a viable plan.
For clarification,The basic need includes the following expense items:

Food, drinks and tobacco
Clothing and shoes
Energy consumption (electricity, gas etc.)
Current housekeeping (cleaning / maintenance of clothes and apartment)
Health care without deductible and franchises (eg self-bought medicines)
Traffic expenses incl. Half-fare (public transport, bicycle / moped maintenance)
Messaging (eg telephone, post)
Education and entertainment (eg radio / TV license and equipment, computers, printers, sports, toys, newspapers, books, school fees, cinema, pet ownership)
Body care (eg hairdresser, toiletries)
Personal equipment (eg writing material)
Away drinks
Other (eg club contributions, small gifts)

So we spend in (basic need) 1200+120+500+100+14 = 1943 CHF
This budget is acceptable. On the grounds that our children are under 6 years and we spend 0 CHF on tobacco and alcohol.

it's just a smarter shopping; I can buy for my child, one Combinaison from Manor with 69chf or from Lidl with 15 chf ( so with 200 chf we buy 14 pieces of Clothing and shoes instead of just 3 )


I thank you and everyone for the useful information
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Old 26.11.2018, 22:18
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Re: Is pillar 3 useful for low-income family?

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we spend 0 CHF on tobacco and alcohol


Tom
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