Self-employment and occupational benefits - what do I need to pay attention to?

Are you self-employed or would you like to become self-employed? This form of employment brings with it a lot of freedom and a great potential for self-realization. This is also true when it comes to retirement planning: You are free to plan your retirement according to your wishes and needs. But beware: With the wrong planning, you risk not having sufficient funds to continue your accustomed lifestyle in old age. Because the benefits of the AHV alone are usually not enough to enjoy a comfortable life in retirement. 

Do not see the company itself as a security

There are many thoughts that often tempt self-employed business owners to somewhat neglect retirement planning. One of them is that their business is their "bank for retirement." For a company that is in sustained demand with consumers, this may indeed be the case. But if you offer services or products that may not satisfy the needs of customers in the same way in the future, it becomes more difficult. Therefore: Especially in our fast-moving times, this card up your sleeve is often just not an ace. 

Second pillar alone is not enough

The first pillar (IV and AHV), which you also have to pay as a self-employed person, is the cornerstone of your pension plan. However, in old age or in the event of disability, this covers only a fraction of the costs that you need to live. 

That is why it is important to pay contributions to the second pillar, i.e. the pension fund. There are many ways for self-employed people to do this: The easiest way is to join a collective foundation. However, we usually only recommend this option for clients who operate a limited company or a limited liability company and employ staff. 

Pension fund of the professional association 

We recommend that most self-employed persons join the pension fund of their professional association. These exist in most industries - for example, for lawyers, doctors, journalists or artists. If your professional association does not have its own fund, there are also insurance companies that may operate an association for your industry. As a customer of Caveo, we help you to find the right insurance company and take care of the registration procedure for you. Our professional and straightforward advice pays off with our customers - because in the whole jungle of pension funds and insurance companies, there are many that have expensive products in their portfolio. Thanks to our experience, we always find the most lucrative solution, tailored to your needs. 

The "Big Third Pillar 

Like "normal employees", you as a self-employed person can also pay contributions into pillar 3a. You can pay a maximum of 20 percent of your income or CHF 34,416 per year. This is often referred to as the "big third pillar". 

The only requirement is that you do not also pay into the second pillar. Because the "fiver and the Weggli" is unfortunately not possible for self-employed people in Switzerland. So you have to decide which is the better solution for you. Of course, many parameters play a role in this decision - such as your current situation, your professional field, but also your future plans. We at Caveo are happy to help you get an overview and make the right decision. 

Pension fund or large 3rd pillar? 

If you earn up to CHF 150,000 per year, you can save taxes equally well with both models. However, if you want to save more than 20 percent of your income for your pension, the 2nd pillar is more worthwhile. In addition, the second pillar allows you to make retroactive payments for previous years, which is currently not possible with the third pillar. 

Young entrepreneurs benefit from the 2nd pillar

Such subsequent payments offer advantages especially for young entrepreneurs who do not earn enough in the first few years to invest in the pension plan. If the business starts to do well after a few years, you can make subsequent contributions to the pension fund and thus avoid gaps in contributions. 

However, self-employed people who also pay contributions to the second pillar can also pay into the small third pillar. However, the upper limit of CHF 6,883 per year applies here. 

Are you self-employed and need more tips or perhaps a free consultation on the topic of retirement planning? Then get the Caveo app now!