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Step 5: How Can I Build My Assets and Save Taxes with a Pension Product?
Retirement planning is more than just securing the future for you and your family. It also means systematically accumulating assets while enjoying attractive tax savings.
Retirement Provision Means Accumulation of Assets
Pension provision for the years after your retirement is based on the targeted accumulation of assets. As part of the tax-privileged Pillar 3 plan, you have several investment options:
- Pension Account - 3rd Pillar with regular, fixed or variable contributions
- Saving with Securities 3rd Pillar with a choice of four investment groups that conform to BVG/LPP regulations: Mixta-BVG/LPP Basic, Mixta-BVG/LPP Defensiv, Mixta-BVG/LPP and Mixta-BVG/LPP Maxi
- Endowment Insurance with risk coverage and a savings component
Benefits of The Pillar 3 Private Pension
- Preferential interest rate offered by the Pension Account - 3rd Pillar
- Attractive returns with Savings with Securities - 3rd Pillar
- Tax benefits when contributions are paid and during the investment term
- Advance withdrawal of capital in accordance with legal guidelines
- Free account and safekeeping account management
Tax Benefits Boost Your Savings
You can deduct the annual payments made into your Pillar 3a retirement savings account from your taxable income up to the statutory maximum amount. In addition, retirement assets are treated separately from your other assets for the duration of the investment, which means that no wealth tax is due on your retirement assets during this period. What's more, a lower rate of tax applies at payout.
Maximum Payments into Pillar 3a Accounts (in 2011):
- Persons who belong to a pension fund: CHF 6,682 p.a.
-
Persons without a pension fund: 20% of net earned income
(up to CHF 33,408 maximum p.a.)
Example
Married couple with two children, protestant, one salary, taxable income: CHF 120,000, resident Zürich, tax rate 2010.
Use our Tax Calculator to calculate your personal tax saving.
Saving for Retirement: Some Basic Rules
- Start building up assets at an early stage and make the compound interest effect work for you
- Make regular contributions in order to benefit from tax breaks every year
- Pay the contribution early in the year and benefit longer from the preferential interest rate
You can calculate your asset growth in your Pillar 3 account.
We hope this has given you an overview of how your pension solution is structured. Our pension advisors will be glad to help you draw up an individual pension plan. Contact us to arrange a comprehensive pension consultation .
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