Swiss 2a retirement savings vs. Swiss 3a retirement savings

Does it make more sense to invest in a Swiss pillar 2a pension fund or a pillar 3a solution?

Hi there,

A Swiss 2a pension fund provides you with a steady pension from the time you reach retirement age until the time of your death. The pension you recieve is based on the amount of money you contribute to the fund, and the rate at which your pension is paid out is stipulated by law. In this way, a 2a pension offers a secure income. However, your contributions are limited to a fixed percentage of salary you earn. You cannot contribute more to your fund than your current salary allows for. It is worth noting that 2a occupational pension fund membership is compulsory for most employees.

Swiss 3a private retirement savings are meant to supplement compulsory occupation pension funds (for employees) or to provide an alternative (for self-employed individuals). The limits on 3a retirement savings which employees can deduct from taxable income are fairly low, reflecting the fact that 3a savings simply complement compulsory 2a savings. 3a contribution limits for self-employed individuals are much higher, making it a viable retirement saving alternative to second pillar solutions.

Best regards from Moneyguru.

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