Voluntary Pension Fund Purchase: The Smart Double Return
Do you have contribution gaps in your pension fund? A voluntary purchase is one of the most attractive ways to save taxes.
Why Do Pension Gaps Arise?
Gaps in the pension fund are more the rule than the exception. They arise from late career entry after studies, parental leave, salary increases, or when you move to Switzerland as a skilled worker from abroad. These missing contribution years not only reduce your retirement pension but also your disability protection.
Legal Note: The 3-Year Rule. Attention: If you make a voluntary purchase, you may not withdraw the resulting benefits as capital within the next three years. If you do so anyway, the tax office will reclaim the saved taxes.
How You Benefit from the Purchase
A targeted purchase into the 2nd pillar offers you tangible advantages:
- Tax deduction: You can fully deduct the paid amount from your taxable income.
- Higher pension: Your retirement assets grow, leading to a higher lifelong pension.
- Compound interest effect: The paid capital earns interest within the pension fund, which makes a big difference over the years.
Checklist: Is a Pension Fund Purchase Right for You?
- Check pension statement: What is my stated "purchase potential"?
- Analyze tax progression: In which year does the deduction bring me the greatest savings?
- Check liquidity: Can I do without the money until retirement (or for at least 3 years)?
Conclusion
A pension fund purchase is often more profitable than many other investments when the tax effect is included.
Author
Adis Kavazovic
Head of Insurance & Financial Planning
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