The 3rd pillar (3a) in Switzerland: cap, deduction and withdrawal

3a or 3b: what is the difference?

Pillar 3a is 'tied': it is tax-advantaged, but the capital is locked until retirement (except in specific early-withdrawal cases). Pillar 3b is 'free': no cap and no lock-up, but without the same tax benefit.

For most people, the 3a is the starting point: it combines savings growth with an immediate tax saving.

The tax advantage and the 3a cap

Every franc paid into a 3a is deducted from your taxable income, reducing your tax in the year of the contribution. For 2025, the annual cap is about CHF 7,056 for employees affiliated with a pension fund.

Self-employed people without a 2nd pillar can pay in more: up to 20% of net income, within a limit of about CHF 35,280 (2025). Paying in the maximum each year is one of the simplest and most effective optimisation levers.

When and how to withdraw your 3a

The 3a capital is normally paid out at retirement, but early withdrawal is possible in specific cases: buying your main residence, starting self-employment, leaving Switzerland for good, or buying into the 2nd pillar.

At withdrawal, the capital is taxed once, separately from other income and at a reduced rate. Key tip: holding several 3a accounts lets you stagger withdrawals over several years and reduce the total tax — something RetirePlan optimises for you.

3a savings account, insurance or securities?

A 3a can be held in a savings account (safe, low return), through a life-insurance policy (saving + cover), or in securities / funds (higher long-term return potential, with market risk).

Over a long horizon, a 3a invested in securities has historically returned more than a plain account — but the right choice depends on your horizon and risk tolerance.

The 3rd pillar in your planning

The 3a serves to bridge the gap between your AVS + LPP pensions and your target standard of living. Its impact depends on the amount paid in, the duration and the withdrawal strategy. In planning, it must be considered alongside the other two pillars and your canton's taxation.

RetirePlan folds your 3a into the overall projection: it quantifies the effect of your contributions and optimises the order of withdrawals at retirement.

Frequently asked questions

What is the pillar 3a cap in 2025?

About CHF 7,056 per year for employees affiliated with a pension fund. Self-employed people without a 2nd pillar can pay in up to 20% of net income, within a limit of about CHF 35,280.

Is the 3rd pillar tax-deductible?

Yes, contributions to a pillar 3a are deductible from taxable income, up to the annual cap. It is one of the most widely used tax advantages in Switzerland.

When can you withdraw your 3a?

At retirement in principle, or early to buy your main residence, become self-employed, leave Switzerland for good, or fund an LPP buy-in. The capital is then taxed once, separately and at a reduced rate.

How do you reduce the tax when withdrawing your 3a?

By holding several 3a accounts and staggering withdrawals over several years, ideally combining them with other lump-sum withdrawals, to avoid pushing up the tax rate.