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I'm busy retiring and claiming my pension and retirement savings but I have no idea what kind of taxes I need to pay on all this money or how to go about it. The HR guys at my company don't seem to have much of an idea either. Could you clarify exactly how taxation of retirement money works? Thanks.
Hi there,
Assets held in 3a retirement savings must be taxed the year in which they are withdrawn. Taxes vary between cantons and municipalities, so inquiring at your local tax office or consulting a tax advisor is a must.
Here are a few general guidelines:
1. If you are willing and able to move your primary residence to another canton, moving to a low-tax canton like Schwyz ahead of reaching retirement age can save you a huge amount of money.
2. If you have multiple 3a retirement savings accounts or vested benefits accounts, close these in separate years to avoid a jump in your income and wealth that would push you into a higher tax bracket.
3. If you will retire abroad, transfer any vested benefits you may have to a vested benefits foundation in a low-tax canton before reching retirement age in order to benefit from a lower tax rate upon withdrawal.
Income you receive from your 2a pension (your employer's pension fund) must be taxed like all other income, as does the pension you receive from your social security old-age insurance.
Best regards from Moneyguru
More on this topic:
3a retirement savings account comparison
Vested benefits account comparison
