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Old 01.02.2021, 14:29
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Pillar3 liquidation rules/ age

Hello,

Is there a certain age by which pillar3 assets will need to be liquidated ? Or someone can keep their pillar 3 account forever/till age 99?

Also tax will need to be paid at liquidation year - how is the amount calculated , do we need to keep all the papers saying how much we contribute to pillar 3 today until we liquidate pillar 3 accounts in future decades ?

Also, is there a cap on the combined number of total pillar 3 accounts someone is allowed to have, or the answer is no / each year they can open a new pillar 3 account.
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Old 01.02.2021, 14:36
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Re: Pillar3 liquidation rules/ age

Cashing out:
You must do so once you reach the regular AHV/OASI retirement age which is currently 65 for men and 64 for women. The earliest you can regularly cash out is 5 years prior to that.

All accounts you cash out (including potential pillar 2 cash outs) in a given year a combined for taxation reason.
If you cash out an account you must take all money out.
You can put money in pillar 3a in a year you cash out an account.
https://www.credit-suisse.com/ch/en/...rd-pillar.html

Given this the optimum number is around 5 accounts.

Taxation:
It only depends on the amount which is cashed out. Other income, wealth etc. are not relevant.
https://www.postfinance.ch/en/privat...pillar-3a.html
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Last edited by aSwissInTheUS; 01.02.2021 at 19:54. Reason: Edit: Incorporating the input from jaudi. Thx.
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Old 01.02.2021, 14:41
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Re: Pillar3 liquidation rules/ age

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Cashing out:
You must do so once you reach the regular AHV/OASI retirement age which is currently 65 for men and 64 for women. The earliest you can regularly cash out is 5 years prior to that.

All accounts you cash out in a given year a combined for taxation reason.
If you cash out an account you must take all money out.
You can put money in pillar 3a in a year you cash out an account.
https://www.credit-suisse.com/ch/en/...rd-pillar.html

Given this the optimum number is around 5 accounts.

Taxation:
It only depends on the amount which is cashed out. Other income, wealth etc. are not relevant.
https://www.postfinance.ch/en/privat...pillar-3a.html
What happens if at age 66 someone hasnít cashed their P3 accounts ?
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Old 01.02.2021, 14:44
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Re: Pillar3 liquidation rules/ age

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What happens if at age 66 someone hasn’t cashed their P3 accounts ?
The bank will close the account and you will lose all the money
Just kidding. The bank will send you letters and if you do not act the will transfer the money to a regular account after deducting the taxes and block all the accounts as there is no response,/lost communication with the client. Or something like this.
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Old 01.02.2021, 14:56
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Re: Pillar3 liquidation rules/ age

Can you cash out earlier, e.g. in the case of permanent invalidity/terminal illness?
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Old 01.02.2021, 19:34
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Re: Pillar3 liquidation rules/ age

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Cashing out:
You must do so once you reach the regular AHV/OASI retirement age which is currently 65 for men and 64 for women. The earliest you can regularly cash out is 5 years prior to that.
That is something I did not know - that you MUST cashout by AHV age... I had always thought the gradual draw-down during retirement years was a key part of the 3a concept. Note the warning in the link below - if you plan to withdraw your company pension as a lump sum in your AHV retirement year, it is advisable to draw down the 3a in the 5 years prior to this to avoid getting it all in the same year as 2a and paying a higher tax rate on the combined value.

This link gives more detail and is helpful in planning.
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Old 01.02.2021, 19:38
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Re: Pillar3 liquidation rules/ age

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Also tax will need to be paid at liquidation year - how is the amount calculated , do we need to keep all the papers saying how much we contribute to pillar 3 today until we liquidate pillar 3 accounts in future decades ?
Around here, it is about 5%.

You don't need to keep any papers.

Tom
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Old 01.02.2021, 19:52
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Re: Pillar3 liquidation rules/ age

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Around here, it is about 5%.

You don't need to keep any papers.

Tom
Is it 5% of the accumulated amount or 5%*(accumulated am- contributed am)?
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