Pension planning: secure your future
Want to benefit from peace of mind when you retire? Want to protect your family in the event of disability or death? We analyse your current situation and suggest personalised solutions based on your life plans.
Our pension planning experts
.png?ixlib=gatsbyFP&fit=max&auto=compress%2Cformat&q=50&rect=68%2C0%2C1228%2C1228&w=115&h=115&fm=webp&dpr=5)
Your pension planning in the context of a mortgage
Why is a pension planning analysis important in the context of a mortgage? Buying a property is a long-term commitment and you need to be able to afford your mortgage when you retire or if something happens to you (disability, death). Furthermore, the pension planning system is an integral part of the financing strategy, whether for the establishment of personal funds or for amortisation of the loan.
Indirect amortisation
Within the framework of indirect amortisation, the borrower only pays the interest to the lender. The amount to be amortised each year is paid into a 3rd pillar A and/or B life insurance policy. Upon expiry of the term agreed with the lender, the borrower repays all, or part, of the portion which can be amortised in a single payment. The borrower also has the choice of continuing amortisation until the normal retirement age and then repay what is owed.
Indirect amortisation is more attractive to the borrower from a tax perspective. In effect, the amount of debt remains constant and you continue to deduct the maximum interest on the mortgage. In addition, payments to a 3rd pillar A are likewise fully tax deductible. Payments to a 3rd pillar B are also deductible in some cantons.
Direct amortisation
The amortizable part of the mortgage loan is paid back to the lender every year on a continuous basis. This repayment is added to the interest on the mortgage and the maintenance fees in the monthly payments.
In the case of direct amortisation, the amount of debt is therefore regularly reduced, with corresponding reduction in interest on the mortgage. The latter are calculated by taking the interest rate multiplied by the remaining loan amount.
Your global pension planning analysis
If you are planning to become a homeowner but you do not yet have the necessary personal funds, pension planning analysis allows you to determine solutions for putting together the necessary capital for this purchase and to calculate the saving time which is still required.
Even if you do not have plans to purchase real estate, you can carry out a non-binding pension simulation with one of our advisors. This simulation will set out your current situation and forecast your income when you retire. You will then know which levers you have at your disposal to retire in full peace of mind.
The pension check-up also includes a risk analysis that allows you to highlight the financial consequences in the event of disability or death. We present you with solutions to cover these risks.
Peace of mind when you retire
On average, the 1st pillar (AVS) and 2nd pillar (LPP) cover around 60% of your final salary received. This is why the Swiss pension system has a 3rd pillar, which is private and optional, and can be used to plug any gaps in pension cover.
The 3rd pillar A (connected 3rd pillar) gives people affiliated with a pension fund (usually employees) the option of paying in up to CHF 7,056 (2023 figure) in contributions per year, up to 20% of their net income, with a maximum of CHF 35,280 (2023 figure) for people not affiliated with a pension fund (typically self-employed workers). These amounts are determined, as you can deduct them from your taxable income, meaning you can save a considerable amount in taxes. The 3rd pillar B (free 3rd pillar) offers greater freedom in the payments you can make and how you can draw it, but it is deductible from taxable income in certain Swiss cantons only (Fribourg and Geneva).
Disability and death cover
Subscription to a 3rd pillar pension plan may offer disability cover, i.e. payment of a pension in the event on long-term loss of earnings. The 3rd pillar also acts as life insurance. In case of death, it allows you provide for your family financially. Within the framework of the free 3rd pillar (3rd pillar B), you even have complete freedom of choice in the beneficiaries.
Our related articles
How do you read a pension fund (OP) certificate?
What is a pension fund (OP) certificate? It is a document that details all the risk benefits and retirement benefits provided by your pension fund. It contains a significant amount of important information, and it is also important to know what the actual numbers and figures mean. An explanation.
How do I take early retirement in Switzerland?
“Retirement” and “early”: two words which, once said in tandem, represent a dream for a lot of us! To make this dream a reality, it’s best to be aware of the facts and get planning all the details as soon as possible...
How does working part-time affect retirement for women?
Over 70% of the people working part-time in Switzerland are women. This lifestyle choice does have consequences when people reach retirement. Find out more below...