Maximum Pillar 3a amount in 2020
It is worthwhile to pay into Pillar 3a in order to save on taxes and prepare for retirement. The maximum amount for 2020 remains the same as in 2019.
The following maximum amounts apply in 2020:
6,826 is the amount insured persons with a pension fund can deposit in 2020.
34,128 or a maximum of 20% of net earned income can be paid into Pillar 3a in 2020 by insured without a pension fund.
Those who pay into a 3a account earlier will save more.
You must deposit your chosen Pillar 3a amount into your pension account by December 31 of each year. It is advantageous to make the deposits early in order to ensure that they are on time and that you will receive the tax benefits. It would be even better to transfer the maximum amount right at the beginning of the year. Your benefit: You benefit from a preferential interest rate for the entire year.
The tax benefits of Pillar 3a.
- Contributions up to the maximum amount can be fully deducted from your taxable income.
- Pension capital in Pillar 3a does not have to be included in your taxable assets. You pay no wealth, income, or withholding tax on the retirement savings throughout the entire term of the pension plan.
- If you make withdrawals from Pillar 3a, these amounts will be taxed separately from your remaining income at a lower tax rate.
- The assets in the Pillar 3a account may be used to purchase residential property.