Maximum Pillar 3a amount in 2024
Old Age and Survivors' Insurance (AHV) and employee benefits insurance (BVG) only cover 60 to 70 percent of the previous household income after retirement. If you want to maintain your accustomed standard of living even in your old age, you should therefore contribute the maximum Pillar 3a amount every year. But what are the maximum Pillar 3a amounts for 2024?
Optimize your pension provision by contributing the maximum Pillar 3a amount
The first pillar (state pension/Old Age and Survivors' Insurance) and the second pillar (employee benefits insurance) of the Swiss pension system are intended to maintain the standard of living after retirement. Together, they only cover between 60 and 70 percent of the previous household income. Pillar 3a makes it possible to close individual pension gaps. Anyone who wishes to use this option can therefore contribute the maximum amount to Pillar 3a and benefit from several advantages at the same time.
The higher maximum amount for gainfully employed persons without a pension fund allows self-employed persons, for instance, who as sole proprietorships are not affiliated to a pension fund, to compensate for the accruing pension gap.
Those who contribute the maximum Pillar 3a amount earlier save more
The amount you want to pay into your pillar 3a account must be credited to the pension account on or before December 31, 2024. To avoid losing the tax benefits, it is advisable to make the deposits at an early stage – it is best to do so before the holiday period. It is even better to transfer the maximum amount at the beginning of the year. This is because the interest earned on the 3a account is significantly greater than a private or savings account.
Save taxes with maximum Pillar 3a contributions
These two examples provide an impressive demonstration of how much tax married couples and single people alike can save by paying into Pillar-3a.
Example 1
Single person, Reformed, taxable income of CHF 60,000, 2023 tax rates in city of Zurich, maximum amount for 2024
Without pillar 3a |
With pillar 3a |
With pillar 3a |
|
Annual payment | CHF 3’000.- | CHF 7’056.- | |
Total taxes | CHF 7'172.- | CHF 6'533.- | CHF 5'747.- |
Annual tax saving* | CHF 639.- | CHF 1'425.- |
*The payout is taxed at a reduced rate, separately from your other income.
Example 2
Married couple, Reformed, taxable income of CHF 120,000, 2023 tax rates in city of Zurich, maximum amount for 2024
Without pillar 3a | With pillar 3a Part payment |
With pillar 3a Maximum amount |
|
Annual payment | CHF 3’000.- | CHF 7’056.- | |
Total taxes | CHF 17’926.- | CHF 17’167.- | CHF 16’172.- |
Annual tax saving* | CHF 759.- | CHF 1'754.- |
*The payout is taxed at a reduced rate, separately from your other income.
The tax benefits of Pillar 3a
- The annual savings deposits can be deducted from taxable income up to the statutory maximum amount.
- No wealth, income or withholding tax throughout the entire term of the savings plan.
- On payout, the money saved will be taxed at a reduced rate, separately from other income.
- The assets in the 3a account can be used for purchasing owner-occupied residential property. The withdrawal is subject to tax – although at a reduced rate and separately from other income.