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Old 03.01.2021, 20:49
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Pay into 3rd Pillar pension in retirement year?

Given that I'm not going to work the full year this year before retirement, can I still pay into my 3rd pillar pension?
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Old 03.01.2021, 21:01
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Re: Pay into 3rd Pillar pension in retirement year?

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Given that I'm not going to work the full year this year before retirement, can I still pay into my 3rd pillar pension?
Yes, however your tax rate may be quite low & therefore of little benefit so you need to look at the figures.
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Old 03.01.2021, 21:48
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Re: Pay into 3rd Pillar pension in retirement year?

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Given that I'm not going to work the full year this year before retirement, can I still pay into my 3rd pillar pension?
Yes but any money you put into your 3rd pillar from your 61st (F) / 62nd (M) birthday cannot be withdrawn as a lump sum if you stay in CH
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Old 04.01.2021, 00:23
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Re: Pay into 3rd Pillar pension in retirement year?

I have never heard of this rule, and I am quite surprised by it. My 3rd pillar is with my bank, and they have never mentioned it to me either. Is this the case with all 3rd pillar funds?
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Old 04.01.2021, 09:59
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Re: Pay into 3rd Pillar pension in retirement year?

I called my bank last summer who my 3rd pillar is with and they told me that from the age of 59 on I can close my 3rd pillar at any time and do what I want with the money in any country I choose. The only drawback is, if I take it before I'm 64, I'll lose 2.5% on tax. I do plan on taking mine out in a few months and I'll be 62.
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Old 04.01.2021, 11:53
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Re: Pay into 3rd Pillar pension in retirement year?

Whenever you withdraw a 3rd Pillar account, you'll pay tax on the withdrawal. It's taxed at a special rate, independently of your normal tax declaration, but it rises with the amount in the account. It's generally recommended to open multiple 3rd pillar accounts and not put more than 50-60 k CHF in each, as you can't make partial withdrawals, you have to close the complete account and if you plan properly, you close one account each year from your 59th/60th birthday on. That will optimize the tax, as the tax rates start going up exponentially after about 50/60k. Note the tax rates are different in each canton (this is Switzerland after all).
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Old 04.01.2021, 13:41
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Re: Pay into 3rd Pillar pension in retirement year?

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Whenever you withdraw a 3rd Pillar account, you'll pay tax on the withdrawal. It's taxed at a special rate, independently of your normal tax declaration, but it rises with the amount in the account. It's generally recommended to open multiple 3rd pillar accounts and not put more than 50-60 k CHF in each, as you can't make partial withdrawals, you have to close the complete account and if you plan properly, you close one account each year from your 59th/60th birthday on. That will optimize the tax, as the tax rates start going up exponentially after about 50/60k. Note the tax rates are different in each canton (this is Switzerland after all).
Just to add - I think the number of accounts you should have is 5 - and balance them equally.

That allows for one withdrawal per year from 60 to 65 (male) / 59 to 64 (female).
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Old 04.01.2021, 14:22
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Re: Pay into 3rd Pillar pension in retirement year?

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Just to add - I think the number of accounts you should have is 5 - and balance them equally.

That allows for one withdrawal per year from 60 to 65 (male) / 59 to 64 (female).
If you want to be really anal you could try and account for growth during this period and arrange them as follows :

1) X CHF (to be withdrawn at 64m / 63f)
2) 1.1 X CHF (to be withdrawn at 63m / 62f)
3) 1.21 X CHF (to be withdrawn at 62m / 61f)
4) 1.331 X CHF (to be withdrawn at 61m / 60f)
5) 1.4641 X CHF (to be withdrawn at 60m / 59f)

This presumes 10% growth per year in line with historical SP500 performance. I'd decrease that to closer to 5% if you are mostly invested in Europe. If that's a bit too obsessive just remember empty the 5 accounts in order from biggest to smallest.
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Old 04.01.2021, 14:38
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Re: Pay into 3rd Pillar pension in retirement year?

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Yes but any money you put into your 3rd pillar from your 61st (F) / 62nd (M) birthday cannot be withdrawn as a lump sum if you stay in CH
Source for this claim?

Tom
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