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Hi all experts out there,
Are 3a retirement policies at Swiss insurance companies a good choice, or are 3a retirement savings accounts the way to go?
Thanks
Hi there,
The tax benefits remain the same whether you choose a 3a retirement savings account or a 3a life insurance policy (these are similar to whole life insurance policies).
A major difference betwenn these two retirement savings vehicles is that when you take out a 3a retirement insurance policy, you are obligated to pay premiums on a regular basis. On the other hand when you use a 3a savings account, you can choose when to deposit money into your account.
If you are absolutely certain of your financial situation over the long term and feel you could benefit from being "forced" to contribute to your retirement plan, a 3a insurance policy could work for you. However, it can be very difficult to predict your financial situation between now and retirement. A 3a savings account is a more flexible and secure option, but you will have to discipline yourself to make contributions because you will not receive a bill every month or year.
It is important to note that 3a insurance policies come with a number of costs. Only a part of the premiums you pay are used to build equity in your life insurance policy - the rest pays premiums for life insurance coverage. You may also be required to take out premium protection (this covers premiums for a time in the event of loss of income), which commands an additional premium. Other fees and charges may apply.
3a retirement savings accounts generally do not have an annual account fee and - as the moneyland.ch retirement account comparison shows - some 3a savings accounts deliver interest rates which beat those delivered by life insurance policies.
As a general rule, you often get a better deal by opening one or more 3a savings accounts and taking out life insurance separately (if you need life insurance).
Best regards from Moneyguru
More on this topic:
Interactive 3a retirement account comparison
3a retirement accounts: The costs explained
Pillar 3a investment accounts explained
Life insurance: Useful tips
