What are the benefits, for cross-border workers, to make a third pillar in Switzerland?
Tax advantages, but not only
Let's start from the beginning, as already explained in other articles, every person who exercises a gainful activity in Switzerland, and declares an income to the AHV, has the right to make a third pillar. For cross-border workers, the tax authority places additional requirements that must be respected, and the procedure for taking advantage of the tax deduction is slightly different. One of the requirements, for example, is to receive at least 90% of the income in Switzerland. But be careful, we are talking about all family incomes (work, real estate, etc.). But the tax aspect is not the only one, rather, perhaps it is the least important one. Those who live abroad generally has contribution gaps, both in the first pillar (AHV) and in the second pillar (BVG). Just think that the first pillar is compulsory from the age of 21, and the second pillar from the age of 25 (as regards savings for retirement). For this reason, and given that most cross-border workers will not receive the maximum benefits, the 3rd pillar should be make to cover their contribution gaps, and benefits in the event of disability and death, regardless of the tax situation and of any tax savings. But if the tax aspect goes into the background, why then make a third pillar in Switzerland and not, for example, a pension fund in Italy? First of all because, having received the salary in Swiss francs, having the third pillar in the same currency eliminates the problem of exchange. Furthermore, Switzerland offers a very stable and secure framework for retirement provision and the economy in general. Before make a third pillar, however, it is advisable to check your social security situation, so as to obtain a 3rd pillar that perfectly suits your needs. Our experts are at your disposal for personal advice or a social security analysis, and will be happy to advise you.
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