When should I start saving for retirement?

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Young people in particular prefer to put off thinking about private pension provision. Of course: We all live in the here and now – and that’s a good thing. However, those who make regular payments into Pillar 3 today not only secure their own future, but also enjoy tax advantages now.

Pillar 3 – how does it work and why is it so important?

To ensure the financial security of everyone in Switzerland, the pension system is based on three pillars: the state pension, the occupational pension, and private pension provision. Pillar 3 forms part of the private pension provision. Unlike the mandatory occupational and state pension provision, saving in Pillar 3 is voluntary. But it is no less important. Pillar 3 aims to close any pension gaps that are not covered by the AHV/IV (OASI/IV) and BVG (OPA) pensions. 

Social developments in Switzerland have made Pillar 3 essential, as it ensures that people can maintain their usual standard of living after retirement. Tax savings can also be achieved by paying into a tied Pillar 3a account. That’s what makes Pillar 3a such as popular choice in Switzerland.

Why should I start saving early?

As a rule of thumb: The earlier you invest in your retirement, the better. The time factor should not be underestimated if you want to achieve a personal pension goal. These days, young people are much more interested in private pension than they used to be – which is great. If you start paying into your pension early, you can expect a substantially higher savings amount, even with smaller payments. 

What’s important is to pay in these amounts regularly, since your pension provision is now only partially covered by the AHV (OASI) and pension fund components. Those who start paying into Pillar 3 later will see a substantial impact on their finances in old age, as the savings phase will be shorter. If you want to enjoy a carefree retirement, you should start planning early and save regularly.

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The asset classes in the AXA pension solution perform extremely well

As one of the world’s largest asset managers in the areas of pension funds and retirement assets, AXA has a great deal of knowledge and expertise in pension provision. What’s more: With our SmartFlex pension plan (Pillars 3a/3b), you can save for your retirement with a focus on returns and with the risk coverage that's right for you. And best of all: The SmartFlex pension plan can be adapted to your life situation at any time.

The long investment horizons and broad diversification will minimize the risks, meaning that any crises can also be overcome. You’ll have everything under control and can adjust the premium split at any time – quickly and flexibly. You are even free to choose the investment themes. And with our clear, intuitive online tool, you can view the details of your pension plan anywhere, at any time. That’s what we call smart and flexible.

Overview of Pillar 3

Pillar 3 offers two ways to add to your pension assets with private savings options: state-supported tied pension provision (Pillar 3a) and flexible pensions (Pillar 3b). 

Pillar 3a is long-term pension provision, where the capital remains tied for your retirement. Early withdrawals are only possible subject to certain conditions, such as buying your own home. Tax savings can be made by paying in contributions up to the maximum of CHF 7,056 a year (for gainfully employed persons with a pension fund). 

Pillar 3a accounts are often included in financial products such as pension accounts or pension custody accounts. Those aiming for a sound financial basis in old age and who want to achieve their personal savings goal will find plenty of suitable solutions in Pillar 3a. For example, the AXA SmartFlex pension plan.

As the name suggests, the flexible Pillar 3b pension is a flexible, non-tied pension without a statutorily prescribed term. The capital remains available at all times. Pillar 3b also allows you to close any pension gaps. Plus: 3b solutions also often form components of overall solutions such as investment funds and accounts. 

Investing your retirement assets pays off

Those who save using Pillar 3 are thinking long-term. And those who invest their capital in products for the long-term can achieve their personal retirement savings goal more easily. Many Pillar 3a solutions contain various modules with return-oriented investments in the financial and equity markets. These have become a vital part of private pension planning.

Conclusion: Save now for your retirement.

If you want to continue to enjoy your usual standard of living after you retire with no worries, then paying into a private pension such as the tax-privileged tied Pillar 3a is definitely right for you. The earlier you start, the better. Flexible, individual solutions such as AXA SmartFlex not only help you reach your retirement savings goals more easily, but also more quickly. And best of all: You’ll also be saving tax. Get advice from our experts today to ensure you can look forward to a carefree retirement.

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