Go Back   English Forum Switzerland > Help & tips > Housing in general  
Reply
 
Thread Tools Display Modes
  #1  
Old 07.03.2021, 13:39
Junior Member
 
Join Date: Dec 2006
Location: Zurich
Posts: 82
Groaned at 0 Times in 0 Posts
Thanked 42 Times in 31 Posts
energyale is considered knowledgeableenergyale is considered knowledgeableenergyale is considered knowledgeable
2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

To the EF experts who have done this, what is the most optimal solution for utilisation of 2nd Pillar assets if you plan to live and stay in Switzerland? TIA.

1. What are the pros and cons of Early Withdrawal of the 2nd Pillar?


2. What are the pros and cons of Pledging the 2nd Pillar? If you pledge your 2nd pillar, what exactly are the tax benefits which are not available for the early withdrawal option? Also, did anyone get a reduction on your interest rate when taking out a mortgage because you have deposited an additional security?
Reply With Quote
  #2  
Old 07.03.2021, 15:30
newtoswitz's Avatar
Forum Legend
 
Join Date: Jan 2010
Location: Rapperswil
Posts: 3,754
Groaned at 75 Times in 70 Posts
Thanked 4,537 Times in 2,076 Posts
newtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond repute
Re: 2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

Main advantage of early withdrawal is you can invest the money in something with decent return.

That's what I did - I had enough investments for the mortgage down payment, but left most where they were and pulled money out of my pension.

Pension tax gain is already realised, and when I have to pay it back in my investments will (almost certainly) be way higher than what I took out.
Reply With Quote
This user would like to thank newtoswitz for this useful post:
  #3  
Old 11.03.2021, 13:39
Forum Veteran
 
Join Date: Apr 2007
Location: Zurich
Posts: 1,590
Groaned at 6 Times in 4 Posts
Thanked 1,039 Times in 588 Posts
axman has a reputation beyond reputeaxman has a reputation beyond reputeaxman has a reputation beyond reputeaxman has a reputation beyond repute
Re: 2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

Does anyone know if withdrawing the 2nd pillar is still possible a few years after the property has already been bought?

For example, to reduce the mortgage amount during refinancing?
Reply With Quote
  #4  
Old 11.03.2021, 13:42
Forum Veteran
 
Join Date: Mar 2010
Location: Greater Zürich Area
Posts: 980
Groaned at 128 Times in 80 Posts
Thanked 795 Times in 423 Posts
EPMike has an excellent reputationEPMike has an excellent reputationEPMike has an excellent reputationEPMike has an excellent reputation
Re: 2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

Quote:
View Post
Main advantage of early withdrawal is you can invest the money in something with decent return.

That's what I did - I had enough investments for the mortgage down payment, but left most where they were and pulled money out of my pension.

Pension tax gain is already realised, and when I have to pay it back in my investments will (almost certainly) be way higher than what I took out.
Interestingly, on this very forum I was advised against doing that.
Reply With Quote
  #5  
Old 11.03.2021, 14:30
Mica's Avatar
Forum Veteran
 
Join Date: Oct 2007
Location: Zurich
Posts: 925
Groaned at 1 Time in 1 Post
Thanked 1,185 Times in 525 Posts
Mica has a reputation beyond reputeMica has a reputation beyond reputeMica has a reputation beyond reputeMica has a reputation beyond reputeMica has a reputation beyond repute
Re: 2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

Quote:
View Post
Interestingly, on this very forum I was advised against doing that.
It depends on your pension set-up.

One aspect is risk insurance:
If the risk insurance in your pension is tied to the amount you have paid in, it is a risk to withdraw from your pension (in case of accident, illness or death your benefits may be lower). If the risk insurance is tied to the amount of the currently insured salary, then withdrawing from the pension has no effect on this (but merely on the pension, i.e. old-age benefits).
Reply With Quote
  #6  
Old 11.03.2021, 14:48
Forum Veteran
 
Join Date: Jul 2013
Location: Olten
Posts: 571
Groaned at 61 Times in 49 Posts
Thanked 453 Times in 272 Posts
hoover1 is considered knowledgeablehoover1 is considered knowledgeablehoover1 is considered knowledgeable
Re: 2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

Quote:
View Post
Does anyone know if withdrawing the 2nd pillar is still possible a few years after the property has already been bought?

For example, to reduce the mortgage amount during refinancing?
Yes, you can do every 5-years or so ..

there may be age related limitation on withdrawn - something like 55 or so - read it once somewhere if I remember correctly .
Reply With Quote
The following 2 users would like to thank hoover1 for this useful post:
  #7  
Old 11.03.2021, 16:53
ipoddle's Avatar
Forum Veteran
 
Join Date: Jan 2008
Location: basel
Posts: 1,114
Groaned at 21 Times in 14 Posts
Thanked 1,086 Times in 454 Posts
ipoddle has a reputation beyond reputeipoddle has a reputation beyond reputeipoddle has a reputation beyond reputeipoddle has a reputation beyond repute
Re: 2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

If you take money out of your pension for your mortgage, any overpayments into your pension are not tax deductable from your income until you pay back what you took out.

May or may not be a factor, depending on your circumstances.
Reply With Quote
  #8  
Old 11.03.2021, 17:04
Forum Veteran
 
Join Date: Apr 2007
Location: Zurich
Posts: 1,590
Groaned at 6 Times in 4 Posts
Thanked 1,039 Times in 588 Posts
axman has a reputation beyond reputeaxman has a reputation beyond reputeaxman has a reputation beyond reputeaxman has a reputation beyond repute
Re: 2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

Quote:
View Post
If you take money out of your pension for your mortgage, any overpayments into your pension are not tax deductable from your income until you pay back what you took out.

May or may not be a factor, depending on your circumstances.
Not really a factor, as the reason I want to take money out is to take it out, not to pay in. But I do see that when getting closer to retirement and my investment horizon gets shorter, being able to save taxes then can be attractive.

What about taxes to take the money out early?
Reply With Quote
  #9  
Old 11.03.2021, 21:45
newtoswitz's Avatar
Forum Legend
 
Join Date: Jan 2010
Location: Rapperswil
Posts: 3,754
Groaned at 75 Times in 70 Posts
Thanked 4,537 Times in 2,076 Posts
newtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond repute
Re: 2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

Quote:
View Post
What about taxes to take the money out early?
There is a tax for this but it's way lower than the original tax saving. Sorry I can't remember or find how much it was.
Reply With Quote
  #10  
Old 11.03.2021, 21:51
st2lemans's Avatar
Forum Legend
 
Join Date: Dec 2010
Location: Lugano
Posts: 31,920
Groaned at 2,392 Times in 1,740 Posts
Thanked 38,870 Times in 18,322 Posts
st2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond repute
Re: 2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

Quote:
View Post
There is a tax for this but it's way lower than the original tax saving. Sorry I can't remember or find how much it was.
3p is just under 5% in Ticino, don't know about other cantons.


Tom
Reply With Quote
This user would like to thank st2lemans for this useful post:
  #11  
Old 11.03.2021, 21:51
st2lemans's Avatar
Forum Legend
 
Join Date: Dec 2010
Location: Lugano
Posts: 31,920
Groaned at 2,392 Times in 1,740 Posts
Thanked 38,870 Times in 18,322 Posts
st2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond reputest2lemans has a reputation beyond repute
Re: 2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

Quote:
View Post
If you take money out of your pension for your mortgage, any overpayments into your pension are not tax deductable from your income until you pay back what you took out.

May or may not be a factor, depending on your circumstances.
Only for 2p.

Tom
Reply With Quote
  #12  
Old 11.03.2021, 21:55
newtoswitz's Avatar
Forum Legend
 
Join Date: Jan 2010
Location: Rapperswil
Posts: 3,754
Groaned at 75 Times in 70 Posts
Thanked 4,537 Times in 2,076 Posts
newtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond repute
Re: 2nd Pillar: Pledge vs. Early Withdrawal for Mortgage

Quote:
View Post
Only for 2p.

Tom
Correct, 3a just keeps going with the normal annual allowance.
Reply With Quote
Reply




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
3rd pillar withdrawal cizio Finance/banking/taxation 14 25.01.2016 23:19
Tax on withdrawal of AHV + 2nd Pillar- freizugikeitskonto Littlestar Finance/banking/taxation 5 24.03.2014 22:39
Reporting Withdrawal from Pillar 2 to IRS almeida Finance/banking/taxation 6 19.06.2012 17:59
2ieme Pillar withdrawal athgeneva Finance/banking/taxation 0 15.06.2012 14:32
Tax on withdrawal of AHV + 2nd Pillar doldol Finance/banking/taxation 1 29.01.2008 10:05


All times are GMT +2. The time now is 04:38.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0