The mandatory payments of the first and second pillars generally only cover around 60% of your current income. However, your expenses will increase in old age, for example due to higher health insurance premiums. As a result, many people find it difficult to maintain their standard of living after retirement. This makes private retirement planning all the more important. The good news is that every Swiss franc paid into pillar 3a private retirement savings by the end of the year can be deducted from your taxable income. You do not necessarily have to pay in the maximum amount provided for by law (which in 2023 is CHF 7,056 for a person with an OPA pension fund) − even smaller amounts will add up over the years. The tax-saving effect is therefore an important factor, independent of the current low interest rate.
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Retirement savings 3a: save on taxes with these tips
You shouldn’t rely solely on state and occupational pension schemes to live off and to turn your dreams into reality when you retire. Take private retirement provision in hand as soon as possible – and reduce your tax bill by making regular contributions to a voluntary and individual private pension scheme (third pillar).
Pay into a retirement savings account or retirement fund and save on taxes at the same time
The easiest way of reducing your tax burden through retirement planning is by paying into a retirement savings account 3a. The contributions made to the fixed retirement savings account 3a can be deducted from taxable income within the maximum amounts provided for by law. You do not pay either wealth tax or income tax on this capital until your retirement assets are paid out and you benefit from interest or returns on any investment in retirement funds. Taxes are only incurred upon premature or ordinary withdrawal of pillar 3a capital. However, you can also optimize your tax burden here by bearing a few pointers in mind.
The withdrawal of the pillar 3a triggers the immediate taxation of the capital paid out. The pension fund provider – in other words, the bank or insurance company – must notify the Federal Tax Administration of the withdrawal immediately. It calculates the tax due. The tax is then collected by the communal or cantonal tax office. The capital is taxed normally as an asset.
Are you still trying to decide whether to invest your pillar 3a retirement capital in a retirement fund? Find out more in our article “How to get more out of retirement planning”.
Save on taxes with retirement planning – our tips
- Adopt a forward-looking approach to your retirement provision: instead of making all payments to a single retirement savings account, you can distribute your contributions across several 3a accounts. If you have several accounts, you can have the withdrawal of your assets spread across several years: you can arrange for the first payment to be made five years before reaching statutory pension age. The staggered withdrawal of assets from the remaining accounts reduces the progressive increase in tax and means you pay less tax, as the example calculation below illustrates.
- Married couples or registered partners should not withdraw their pillar 3a assets in the same year. The payments are added together and the total withdrawal amount is used to calculate the tax rate which has implications in terms of progressive taxation.
- Don’t withdraw the capital from your pension fund and pillar 3a account in the same year. Both payments are added together here, too, and taxed jointly. It makes sense to arrange for payments to be made over several years if possible.
- When withdrawing retirement assets from the second and third pillars, always find out about the tax policy in your canton of residence.

As a general rule, the earlier you begin retirement planning the better. This is not just because you benefit from interest (or returns in the case of retirement funds) and compound interest over the long term, but also because you’ll reduce your tax liability each year. Our example calculation shows why you can never start too early when it comes to retirement planning. Read our article on this topic “Retirement provision: your first step to becoming an investor”

You’ll usually also find a tax calculator on the website of the tax authority in your canton of residence. You can also calculate your annual tax savings via pillar 3a contributions and calculate the tax on capital withdrawals from the second and third pillars using our calculators.