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Old 18.04.2019, 00:00
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3rd pillar for couples

Me and my wife started working in VS, last month (March). I wanted to know if both of us can benefit from 3rd Pillar tax deduction. How the 3rd pillar tax deduction is calculated for a working couple? should we pay twice the maximum amount(2*6826 CHF) or do we need only one account(1*6826 CHF)? When is the deadline to pay into pillar 3a account to benefit from tax deduction in 2019?
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Old 18.04.2019, 02:00
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Re: 3rd pillar for couples

You can pay in up until the end of December 2019 (though you won't see any benefit until next year).

As far as I'm aware, Pillar 3 is linked to an individual, so you can each pay in the maximum amount per year, or any amount less than that.
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Old 18.04.2019, 07:25
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Re: 3rd pillar for couples

If you're both employed you can each pay the amount allowed into 3rd pillar accounts.
Because of the way they're taxed when they pay out, it's generally recommended to open up to 5 of these accounts and start cashing them in (one per year) once you get to 60.
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Old 18.04.2019, 08:42
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Re: 3rd pillar for couples

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If you're both employed you can each pay the amount allowed into 3rd pillar accounts.
Because of the way they're taxed when they pay out, it's generally recommended to open up to 5 of these accounts and start cashing them in (one per year) once you get to 60.
Could you please find reference to the statement that itís recommended to open up to 5 of these accounts as far as tax implications are concerned?
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Old 18.04.2019, 08:43
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Re: 3rd pillar for couples

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Could you please find reference to the statement that itís recommended to open up to 5 of these accounts as far as tax implications are concerned?
No reference. Just that you have to empty the pot as a whole so it makes sense to have several and avoid having to take out a big lump sum in one go.
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Old 18.04.2019, 08:45
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Re: 3rd pillar for couples

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No reference. Just that you have to empty the pot as a whole so it makes sense to have several and avoid having to take out a big lump sum in one go.
Then what is the recommended amount per account?
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Old 18.04.2019, 08:48
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Re: 3rd pillar for couples

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Then what is the recommended amount per account?
Up to you. There is no recommended amount. Maybe what you expect to use for rent in one year when you retire ?
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Old 18.04.2019, 11:22
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Re: 3rd pillar for couples

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No reference. Just that you have to empty the pot as a whole so it makes sense to have several and avoid having to take out a big lump sum in one go.
Definitely, but there's no definitve maximum. Perhaps enquire with your tax authorities before you open another one.


@jacek, make all accounts have roughly the same balance.
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Old 19.04.2019, 16:43
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Re: 3rd pillar for couples

The problem is that the tax rate applied to the withdrawal is progressive. It's at a special rate and varies from canton to canton, so difficult to give general advice. In an ideal world you'd plan to have roughly the same amount in each of your 3rd pillar accounts.
You can start cashing in your 3rd pillar accounts from 60 years, but you have to cash them each in their entirety and therefore pay the tax on the totality of the amount in that account. Cash in the account with the least money in first and the one with the most in it last, unless you're a wizz-bang banker who can make millions out of the amount in these accounts.
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Old 19.04.2019, 17:07
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Re: 3rd pillar for couples

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The problem is that the tax rate applied to the withdrawal is progressive. It's at a special rate and varies from canton to canton, so difficult to give general advice. In an ideal world you'd plan to have roughly the same amount in each of your 3rd pillar accounts.
You can start cashing in your 3rd pillar accounts from 60 years, but you have to cash them each in their entirety and therefore pay the tax on the totality of the amount in that account. Cash in the account with the least money in first and the one with the most in it last, unless you're a wizz-bang banker who can make millions out of the amount in these accounts.
What are the charges for closing? It's often 500 CHF for Pillar 2 or if you leave CH & you want to move the canton having more accounts could easily backfire as the overall balances will likely be small.
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Old 21.04.2019, 15:13
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Re: 3rd pillar for couples

I paid nothing as I cashed in mine, but you'll have to look at the conditions linked to the account.
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