Self-employed: what provision for your retirement?

AVS: mandatory for the self-employed too

The 1st pillar remains mandatory: as a self-employed person, you contribute to the AVS on your income, at a rate of its own. These contributions build your entitlement to the AVS pension, just as for an employee.

It is important to declare your income correctly and to fill any contribution gaps, because each missing year reduces your future 1st-pillar pension.

No mandatory 2nd pillar

Unlike employees, the self-employed are not automatically affiliated to a pension fund. This is the main source of the gap: without a 2nd pillar, a large part of the replacement income expected at retirement disappears.

This makes voluntary provision all the more important. It is up to you to rebuild, by other means, the capital that a 2nd pillar would have created.

Joining the 2nd pillar voluntarily

The self-employed can join a pension institution voluntarily: that of their professional association, that of their staff if they employ any, or a collective foundation. Contributions are then deductible and the savings are protected.

This option also gives access to buy-ins, a powerful tax lever for high incomes. It is worth comparing with a strategy centred on the 3rd pillar.

The extended 3rd pillar (3a)

Self-employed people without a 2nd pillar benefit from a higher 3a limit: they can pay in a percentage of their income, up to a maximum set each year, and deduct it from their taxable income.

This extended 3a is the central provision tool for many self-employed people. Paying in the maximum each year and holding several accounts to stagger withdrawals optimises both saving and tax.

Building a coherent plan

The right strategy often combines well-funded AVS, a maximised extended 3a, sometimes an optional 2nd pillar, and private savings or investments. The aim is to avoid the gap while managing the tax and the cash flow of the business.

RetirePlan quantifies your self-employed situation, highlights any gap and compares the options to fill it at the best cost.

Frequently asked questions

Do the self-employed contribute to the AVS?

Yes. The AVS is mandatory for the self-employed, who contribute on their income at a specific rate. These contributions build entitlement to the 1st-pillar pension, just as for an employee.

Does a self-employed person have a 2nd pillar?

Not automatically. The self-employed are not subject to the mandatory 2nd pillar. They can, however, join one voluntarily, through their professional association or a collective foundation.

What 3rd pillar for a self-employed person?

Self-employed people without a 2nd pillar benefit from a higher 3a limit: a percentage of income up to an annual maximum, deductible from taxable income. It is often their main provision tool.

How do you avoid a pension gap as a self-employed person?

By contributing properly to the AVS, maximising the extended 3a, considering an optional 2nd pillar and topping up with private savings. A quantified plan lets you measure and fill the gap.