The Five Most Common Pitfalls in the Case of an Advance Withdrawal
The state permits retirement savings to be used for residential property. Banks accept assets from the pension fund and Pillar 3a as equity capital. But advance withdrawals are subject to restrictions that many people are not aware of. Avoid these five pitfalls!
1. You are planning to take early retirement next year and would now like to make an advance withdrawal of your pension capital for an owner-occupied apartment.
You should have acted on this sooner. Many pension funds only permit advance withdrawals up to three years before you become entitled to retirement benefits. With most pension funds, early retirement is possible at age 58 or 60. Therefore, you must start taking steps three years before this. Depending on the regulations, the period can also be shorter.
2. You made a partial advance withdrawal last year and now wish to put all your assets into the property.
Unfortunately this is not possible. You can only withdraw assets from the pension fund at five-year intervals, with the amount in each case being a minimum of CHF 20,000. Withdrawals from Pillar 3a are also only possible every five years. In addition, you must check whether the pension foundation permits partial withdrawals.
It can easily take six months until your pension fund transfers your money.
3. You are meeting the vendor at the notary's office for the property transfer, but the money from the pension fund has not yet arrived.
Many good deals have foundered like this. It can easily take six months until your pension fund transfers your money. Not all vendors are as patient as that and they could give another buyer priority. Have your pension fund confirm in writing that your appointment at the notary's is binding for the transfer too.
4. You would like to use your pension fund assets to repay a mortgage, but the pension fund will not pay.
This exception also exists. If there is a shortfall in cover in your pension fund, the fund can refuse the advance withdrawal. There is a shortfall in cover if the insurer does not currently have as much money as the promised benefits cost. Check in the regulations whether your pension fund reserves the right to take such a step in the event of restructuring.
5. You have just turned 60 and decide to make an advance withdrawal of the assets, which have now grown substantially.
It's not that simple. People under the age of 50 may, in principle, withdraw all of their pension fund assets. Older people, however, can only withdraw half of their current assets, or the same amount as they would have received at age 50. The higher of the two amounts applies.