Live Better with Bonviva Increase Your Potential Returns
Securities investments increase the potential returns compared to savings accounts in Pillar 3a too, and offer numerous tax advantages. The new CSA Mixta-BVG investment group, with an equity holding of 75 percent, is an ideal supplement to Credit Suisse’s range of pension solutions as there is a suitable offer for every type of investment.
Low interest rates and increasing life expectancy pose a challenge to the Swiss pension system. In today’s context, it seems all the more important to save through a private pension scheme as well as through the first and second pillars. Pillar 3a is the perfect solution for this. There are tax advantages for anyone saving through Pillar 3a. Currently, employees with a staff pension fund may pay in CHF 6,768 per year, and employees without a staff pension fund can pay in a maximum of CHF 33,840 and deduct this from their income in their tax return.
Beginning to Save Later Will Generate Less Income
Credit in a tied Pillar 3a account has a preferential interest rate, so is in principle more profi table than standard savings accounts. As a result of the compound interest effect, it is worth beginning to pay into Pillar 3a as early as possible. Suppose that at the age of 25 you begin paying CHF 2,000 per year into Pillar 3a. At 65 years old, you will have CHF 123,000, based on a constant interest rate of 2 percent. If you begin investing CHF 4,000 per year at 45 years old, when you are 65 years old you will only have around CHF 99,000 in the Pillar 3a account, although you will have invested the same amount.
As a result of the compound interest effect, it is worth beginning to pay into Pillar 3a as early as possible.
Various Solutions for Different Risk Profi les and Investment Horizons
If you save in Pillar 3a, you will benefi t from a preferential interest rate, although it is currently below 1 percent. Potential returns are better with securities investments. Investing in securities means you take part in the development of the fi nancial market and can expect higher income in the long term.
Since February, Credit Suisse has offered a total of nine different CSA Mixta-BVG investment groups, which place the bank among the test winners in two categories in the Handelszeitung’s Pillar 3a securities comparison. These pension solutions differ mainly in their equity holdings. The higher the equity holding, thelarger the potential returns in the long term. Actively managed investment groups are managed by specialized portfolio managers who aim to achieve better performance than the overall market by using internal bank research. Passively managed, so-called indexed investment groups are less complex and are therefore cheaper for investors.
Credit Suisse Launches New 3a Investment Solutions with a 75 Percent Equity Holding
Credit Suisse’s newest pension products comprise one actively managed and one indexed investment group, both with an equity holding of 75 percent. Both products meet an important client need and offer considerably higher potential returns than a traditional pension account (see chart).
The risk profile and investment horizon are pivotal factors when choosing a suitable investment group. For equity holdings of 25 percent, a minimum of fi ve years is recommended, and eight years for 45 percent. For investors with an increased risk tolerance and a longer investment horizon of at least 10 years, an equity holding of 75 percent is recommended.
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Comparable Solutions after Retirement
Just like with Pillar 3a assets, Credit Suisse also offers actively managed wealth management funds for disposable assets. For investors who wish to invest their private assets according to the same investment regulations as for the second pillar, the fund offers the Privilege family of funds. These funds are the ideal follow-on solution for investors who, for example, were invested in the CSA Mixta-BVG investment group or in a similar investment solution and are looking for an investment solution with a similar equity component after retirement. The Privilege funds can also be purchased before retirement with disposable assets.