Suggestions to Start - 3a vs 3b

[framboise]

Hey guys!

Thanks in advance for anyone who takes the time to read. I know you probably see something like this every day ahah.

Some context: I am 27, work in IT and live alone for now but with partner incoming in the near future to stay (partner does not work for now). I think I have a pretty good base salary and i think, well, I know I need to start investing to better secure my/my family's future.

I have read/"studied" briefly about the basics of investing some years ago but I have understood it's definetly NOT my field as whenever i studied something I suddendly forgot about it.

I have these 2 main questions:

1. Should I start with some 3A investing? I have read about 3A pillar and options, most on these (https://forum.mustachianpost.com/t/the-pillar-3a-tutorial/46 , https://thepoorswiss.com/viac-vs-finpension-3a/) or links like this. The main takedown for me is the fact that, from what i understood, I cannot withdraw the money until at least 5 year before the retirement date (so I think around 37 years from now). AND, most important, I don't know if i will be staying in Switzerland in the distant future (10/15 years).
2. Should i just spend everything, as I have read on countless posts here on reddit and non, on Interactive Brokers and VT and "forget" about it?

As i have read ITBKS is the best option all around (here https://thepoorswiss.com/best-broker-switzerland/ and in other posts).

I will have some big expenses in the very near future (this year/start of next year) and i need some liquid cash in my account.

My idea was to invest for 15/20+ years and start with around 5K as initial and then put 500CHF every month for Compound Interest. Eventually adding another account in the future for the children with the same structure.

P.S.: Is this trustable as a recap for capital gains?

https://thepoorswiss.com/capital-gains-switzerland/

P.P.S.: And about taxes is there something i need to do every year? If you don't want to explain if you have post some good reference link of where i can read if you have it.

I repeat, thanks in advance for everyone who read the post!

Have a nice day!

EDIT: I Think i forgot an important piece about 3a:

I forgot to mention probably an important thing: I am an Italian Citizen staying in Switzerland and for Now i do not have the C permit, i have to wait 3/4 years still.

 

[ellen14]

@framboise 3a is an absolute MUST due to the tax savings and if you go with the options that are mentioned at Mustachianpost and Poorswiss you can individualize your investing strategy based on your risk profile. And, you can also then take out the money, once you leave CH for a certain fee. Thepoorswiss mentiones this also in his review for Finpension

Thepoorswiss is quite a trustable source, but before you invest any money, do also your research and only invest, once you are comfortable. You will see that there are many different options. VT is quite popular due the fact that you invest into the whole market, but there are also other options.

For taxes maybe check out this website. It's simple and explains on the high level: https://www.ch.ch/en/taxes-and-finances/tax-return/

 

[evanjroberts]

@ellen14 Well,

For us who are tax at source.

3a is kinda pointless

 

[framboise]

@evanjroberts I am an Italian Citizen staying in Switzerland and for Now i do not have the C permit, i have to wait 3/4 years still. Does the tax at source "nullify" the tax savings in 3a?

 

[evanjroberts]

@framboise Yes.

 

[framboise]

@evanjroberts Oooh ok, dammit. I will take that into consideration.

Thanks!

 

[mfhorn]

@framboise You can still file your taxes as normal, and get the deductions. You just have to calculate if you actually save money compared to Quellensteuer

 

[follwerofchrist86]

@ellen14 Sorry, what is VT?

 

[ellen14]

@follwerofchrist86 Vanguar Total World Stock ETF

Link: https://investor.vanguard.com/investment-products/etfs/profile/vt

 

[framboise]

@ellen14 Oh ok Thank you!

Yes for sure I will research a little bit more. I was asking myself if VT was still a good choice for the general person.

About the 3a. I forgot to mention probably an important thing: I am an Italian Citizen staying in Switzerland and for Now i do not have the C permit, i have to wait 3/4 years still. Does that change the "utility" of tax deduction in 3a case? Or should i still do it?

Thanks about the Taxes website!

 

[ptmladybug]

@framboise First a little thing to tell you: If you leave Switzerland in 10 to 15 years again, in most cases you can withdraw your 3a again.

Next I want to tell you that it is really important to know what you want to have. Most important I think is not, as many others here on Reddit think, to only save money for retirement, but for taking a closer look first on saving your income (maybe with an insurance as well), because without your income you won't be able to save money anymore.

The blogs you've mentioned might seem to have the best solutions on 3a/3b on a first sight, but this is only true if your family can live with the huge risk of losing your income (what happens to 1 of 5 families before the person with the main income becomes 65y old).

 

[framboise]

@ptmladybug Oh ok, I missed the part about the withdrawal!

You mean like an Income protection insurance?

I think I have a stable job, and even if (hope not) it would happen that i lose it I am pretty sure that as a Software Engineer I can find it quickly.

Thanks for the comment!

 

[ptmladybug]

@framboise I am here to help .

It's not really an income protection insurance meant like "if you lose your job you're save". This one is insured by law via the Arbeitslosenversicherung. In fact the protection is meant to save your income if you got really disabled. For example you as a software engineer lose both of your hands because of an illness, so you cannot work anymore.

 

[christcamebackfromthedead]

@framboise 3A can be used for a real estate purchase or when you definitely leave Switzerland, so the money is not necessarily blocked until you retire.

And you save taxes right away, so it's a good investment. With the new cool kids on the market (Viac, FinPension, Frankly, TrueWealth) you can get pretty good returns on it too.

Avoid a 3a product with bound life insurance, specially with traditional insurance companies. These cost a fortune.

3A is limited to CHF 7056/year, unless you are self-employed. So use IBKR for the leftover money you didn't spend on the 3A. For your future kids, you might want to look into alternatives. There are some new companies that offer low fees or even no fees for very small accounts.

 

[framboise]

@christcamebackfromthedead Thanks for the comment!

As the other guys commented they made me notice that i forgot a point about me not being a Swiss Citizen and so the 3a probably won't make the most sense!

 

[nursingninja]

@framboise You're right

 

[jholdaw2]

@framboise Avoid any kind of mixed life insurance. Don't mix investing and insurance. If you need insurance, buy it separately ("risque pour"). If anyone tries to sell you a mixed life insurance, they're not acting in your best interest.

More: https://thepoorswiss.com/life-insurance-third-pillar/

 

[nursingninja]

@framboise Keep in mind that if you are taxed with Quellensteuer (I don't know the english word), pillar 3a is not the right thing. Quellensteuer is if you are new in Switzerland, taxes will be deducted from you salary. So you do not have an advantage with investibg in pillar 3a. If you're taxed normally, then pillar 3a makes sense.

 

[kingly342]

@nursingninja You can still file a tax declaration. Especially you have to if you earn over 120k which I assume he is working in IT

 

[framboise]

@kingly342 For now i get less than 120k, let's say around 100k more on less