Pillar 3a payout: What to keep in mind when making a withdrawal

In short: A Pillar 3a payout is possible no earlier than five years before the AHV reference age, that is, from age 60 for men and age 59 for women. The capital is taxed separately from ordinary income at a reduced rate. Withdrawing from several Pillar 3a accounts in different years noticeably lowers that tax.

Many people want to live independently in retirement and secure their financial future. Saving through the third pillar can be an important building block on that path.

The Pillar 3a payout is the release of the tied pension capital from the third pillar. It takes place, as a rule, no earlier than five years before the AHV reference age, and in legally defined exceptions earlier still. The capital withdrawn is taxed separately from ordinary income at a reduced rate, the capital withdrawal tax.

The tax-privileged Pillar 3a serves as private pension provision for retirement. For this reason, strict rules apply to withdrawals and, in particular, to early withdrawals. This article explains when a withdrawal is possible, how taxation works, and how a staggered withdrawal across multiple accounts can lower your tax bill.

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The key facts at a glance

• Withdrawal window: Ordinary withdrawal is possible no earlier than five years before and no later than five years after the AHV reference age (source: AHVG/BVV3, as of 2026).
• Reference age 2026: 65 for men; for women, the reference age is being raised to 65 in stages under the AHV 21 reform (source: BSV).
• Maximum annual contribution 2026: CHF 7’258 with a pension fund; without a pension fund, 20 per cent of earned income, up to a maximum of CHF 36’288 (source: BSV, unchanged since 2025).
• Taxation: The withdrawal is taxed separately from income at a reduced rate. The amount varies considerably by canton and municipality.
• Early withdrawal: permitted only in four legally regulated exceptions (emigration, self-employment, residential property, invalidity).

When can I start withdrawing from Pillar 3a?

Ordinary withdrawal from Pillar 3a is possible no earlier than five years before the AHV reference age and no later than five years after it, provided you remain in employment. The reference age in 2026 is 65 for men; for women it is being raised to 65 in stages under the AHV 21 reform.

If you continue working after reaching the reference age, you may defer the withdrawal. Once you leave employment, at the latest five years after the reference age, the capital must be withdrawn. These withdrawals in the context of retirement are referred to as ordinary withdrawals.

When is an early withdrawal from Pillar 3a permitted?

Early withdrawal is permitted only in four legally regulated cases: emigration, taking up self-employment, purchase of owner-occupied residential property, and invalidity. These strict rules exist because the tax-privileged Pillar 3a serves as retirement provision. Outside these exceptions, the capital remains locked until the withdrawal window before retirement.

Leaving Switzerland

Anyone who leaves Switzerland permanently can have the retirement capital paid out early. In the case of married couples, the written consent of the spouse is required. Proof of the new permanent residence abroad must be provided.

Self-employment

Self-employed individuals who do not belong to a pension fund can have the capital from the third pillar paid out in the first year after taking up self-employment. This applies only to partnerships, not to legal entities such as a joint-stock company or a limited liability company. As compensation for the absence of a second pillar, self-employed individuals may pay a higher annual amount into the third pillar.

Owner-occupied residential property

An early withdrawal from Pillar 3a can provide additional personal funds for the purchase or construction of permanently owner-occupied property. An early withdrawal is possible every five years. The payout is subject to a reduced tax rate, which varies by place of residence and the amount withdrawn.

Pillar 3a capital may also be used to repay mortgage loans or to finance value-enhancing investment in owner-occupied property. The following applies:

• There is no age limit and no minimum amount for early withdrawals to finance residential property. Such withdrawals count as genuine equity, unlike pension fund withdrawals.
• Up to five years before the reference age, a partial amount of the Pillar 3a capital may be withdrawn. After that, only the entire balance of the respective pension arrangement can be withdrawn. This is why it is worth maintaining multiple Pillar 3a accounts.

Invalidity

Recipients of a full invalidity pension from the IV who do not have disability cover can have their Pillar 3a balance paid out.

Death

Upon the death of the account holder, the capital is paid out. The order of entitlement is governed by law: spouse, children and persons for whose livelihood the deceased provided substantially, followed by parents, siblings, and other heirs.

Purchase into the pension fund

The capital from the third pillar may also be used to buy into a tax-exempt pension provision arrangement. The conditions are that there are no contribution gaps and that there is no outstanding early withdrawal for residential property that has not been repaid.

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How much tax will I pay when I withdraw from Pillar 3a?

The capital withdrawn is taxed separately from ordinary income at a reduced rate, the capital withdrawal tax. It is levied at federal, cantonal, and municipal level and varies considerably depending on your canton of residence, your municipality, and the sum withdrawn. There are substantial differences between cantons, which means your place of residence in the year of withdrawal can have a significant effect on the tax due.

How the calculation works:

• A separate one-off tax: The withdrawal does not increase your taxable income. It is assessed as a one-off capital benefit under a separate annual tax, independent of salary, pension, and wealth.
• A reduced rate: For direct federal tax, the rate is roughly one-fifth of the ordinary income tax rate. Canton and municipality apply their own, likewise reduced, rates.
• Progressive: As with income tax, the rate rises with the size of the withdrawal. A withdrawal that is twice as large therefore costs more than twice the tax. This is precisely where staggering helps.

The scale of the cantonal differences is shown by a CHF 500’000 withdrawal by a single person: in the city of Zurich the burden is around 7.2 per cent, in Lucerne around 6.2 per cent, and in Appenzell around 5.1 per cent (illustrative figures, source: finpension tax comparison). Even within the same canton, the effective rate varies from municipality to municipality.

Important: capital withdrawn from the 2nd and 3rd pillars in the same year is combined when calculating the capital withdrawal tax. Married couples’ withdrawals within the same tax period are also aggregated. Careful timing of withdrawals therefore reduces the overall tax burden.

Planned 2027 reform: As part of the 2027 relief package, the Federal Council proposed taxing capital withdrawals from the 2nd and 3rd pillars more heavily. Parliament struck this measure in March 2026. As of 2026, the existing rule therefore stands: separate taxation at a reduced rate (source: parliamentary deliberations on the 2027 relief package).

The tax treatment depends on your individual circumstances and may change. This article does not constitute tax or investment advice.

What should I bear in mind when withdrawing from Pillar 3a?

Regardless of timing, you must actively dissolve the Pillar 3a. The bank or insurance company does not close the account automatically. Contact your institution in good time and they will send you the application form. You must declare the withdrawal in your tax return; tax is levied separately at a reduced rate.

The following points are worth noting when making a Pillar 3a withdrawal:

• Close the account in full: A Pillar 3a account must always be dissolved completely. A partial withdrawal is only possible if you hold multiple Pillar 3a accounts. This matters when coordinating withdrawals from the various pillars.
• Coordinate with the pension fund: Capital withdrawn from the 2nd and 3rd pillars in the same year is combined for the capital withdrawal tax calculation. A staggered withdrawal lowers the tax.
• New Pillar 3a account in the final year of work: If you plan to retire at the reference age and withdraw pension fund assets as capital, you should close an existing Pillar 3a account a year beforehand. Otherwise the pension fund capital and the Pillar 3a payout are counted together, which raises the tax rate.
• Latest deadline for closure: Pillar 3a assets must be withdrawn once you reach the AHV reference age. If you can demonstrate that you are continuing to work, you may keep the Pillar 3a open for up to five years and continue making contributions during that period.

How can I save tax with a staggered withdrawal?

By spreading your pension capital across several Pillar 3a accounts and withdrawing from them in different tax years, you soften the progression of the capital withdrawal tax. Since each withdrawal is assessed separately, the total tax burden is lower than if the entire balance were paid out in a single year.

Depending on the overall situation, individual accounts can be dissolved from age 60 (men) or 59 (women) over several years. The tax is calculated per year and per account dissolved. This individual assessment results in lower overall progression at federal and cantonal level than if all accounts were closed simultaneously.

The key is to prepare the staggering early enough, because a single Pillar 3a account can only be dissolved in full at retirement. Anyone wishing to spread the withdrawal across several years needs several accounts and must have opened and funded them in good time. A common rule of thumb is to maintain an additional account once a balance reaches around CHF 50’000. Three to five accounts are typical, allowing withdrawals to be spread across the final years before and the first years after the reference age. The withdrawal window spans ten years in total: five years before to five years after the reference age.

Worked example on staggering

The following example illustrates the effect using tax figures for the city of Zurich (single, withdrawal at age 65, non-denominational; source: finpension tax table). Actual tax depends on canton, municipality, marital status, and individual circumstances.

• Single withdrawal: withdrawing CHF 500’000 in one year incurs approximately CHF 35’839 in capital withdrawal tax, equivalent to around 7.2 per cent.
• Staggered withdrawal: splitting the same amount across two accounts and withdrawing CHF 250’000 in two separate years results in approximately CHF 14’787 per withdrawal, equivalent to around 5.9 per cent. Together, that amounts to approximately CHF 29’574.

In this example, staggering reduces the tax burden by roughly CHF 6’250, because each withdrawal is assessed individually and therefore at a lower progressive rate.

Does the time of year matter for a Pillar 3a withdrawal?

For the capital withdrawal tax, the relevant factor is not the month but the tax year in which the withdrawal falls. Within the same year, a withdrawal in January and one in December are taxed at the same rate. What counts is the date on which the pension foundation pays out the balance, not the date on which you submit your application.

The real lever therefore lies at the turn of the year. Anyone who wants to spread two accounts across two separate tax years with as little time as possible in between withdraws one at the end of December and the next at the start of January. Both withdrawals then fall into different tax periods and are assessed individually, even if only a few weeks separate them.

Good planning matters near year-end. Submit your application in good time so that the payout date does not inadvertently slip into the following year. A withdrawal that is only credited in early January counts for tax purposes as belonging to the new year, even if you applied in December. If you want to ensure a withdrawal falls within a specific tax year, build this deadline into your planning from the outset (source: VZ VermögensZentrum).

What mistakes should I avoid when withdrawing Pillar 3a?

A few pitfalls can lead to more tax than necessary, or to the withdrawal not falling in the year you intended:

• Thinking about staggering too late: Opening a second account shortly before retirement leaves no room to spread the balances sensibly. The split should grow over your working years.
• Withdrawing pension fund and Pillar 3a capital in the same year: If you withdraw from the pension fund and Pillar 3a in the same year, the two amounts are added together, raising the progressive rate. These withdrawals belong in different tax years.
• Bundling spouses’ withdrawals: Within the same tax period, married couples’ withdrawals are added together. It is worth placing the two partners’ payouts in different years.
• Applying too late: The pension institution does not pay out automatically. Submit the application form in good time, ideally about a year before the planned withdrawal.
• Forgetting the withdrawal in your tax return: The capital benefit must be declared. The separate tax is levied on its own, not through the ordinary assessment.
• Overlooking your place of residence: What counts is your domicile in the year of withdrawal. A move shortly before or after the withdrawal can change the applicable rate.

Frequently asked questions about Pillar 3a payouts

When can I withdraw my Pillar 3a?

As a rule, no earlier than five years before the AHV reference age and no later than five years after it, provided you remain in employment. Outside this window, withdrawal is only possible in legally regulated exceptions, for example upon emigrating, taking up self-employment, or purchasing owner-occupied residential property.

How much tax will I pay when I withdraw Pillar 3a?

The capital is taxed separately from ordinary income at a reduced rate, known as the capital withdrawal tax. The amount depends on your canton of residence, your municipality, and the sum withdrawn, and varies considerably between cantons. Withdrawals from the 2nd and 3rd pillars in the same year are combined for the purpose of calculating the tax.

How can I save tax with a staggered withdrawal?

By spreading your pension capital across several Pillar 3a accounts and withdrawing from them in different tax years, you soften the progression of the capital withdrawal tax. Since each withdrawal is assessed separately, the total tax burden is lower than if the entire balance were paid out in one go. Depending on your situation, staggering can begin from age 59 (women) or 60 (men).

Can I withdraw Pillar 3a early?

Yes, in four legally regulated cases: permanent emigration from Switzerland, taking up self-employment without a pension fund, purchase or construction of owner-occupied residential property, and receipt of a full invalidity pension. Outside these exceptions, the capital is locked until the withdrawal window before retirement.

Do I need to close the Pillar 3a account myself?

Yes. The bank or insurance company does not dissolve the Pillar 3a automatically. You must actively apply for the withdrawal and declare the payout in your tax return. Submit the application form in good time, ideally at least one year before the planned withdrawal.

How many Pillar 3a accounts should I hold for a staggered withdrawal?

There is no statutory requirement. A common rule of thumb is to open an additional account once a balance reaches around CHF 50’000, so that withdrawals can later be spread across several tax years. Because a Pillar 3a account can only be dissolved in full at retirement, the number of accounts determines how many separate tranches you can stagger.

Will the capital withdrawal tax be increased in 2027?

No. The Federal Council had proposed taxing capital withdrawals from the 2nd and 3rd pillars more heavily as part of the 2027 relief package. Parliament struck this measure in March 2026. As of 2026, the existing rule stands: a one-off tax levied separately from ordinary income at a reduced rate.

Should I withdraw Pillar 3a at the beginning or end of the year?

For tax purposes, what counts is the tax year, not the month: a withdrawal in January and one in December of the same year are taxed identically. The turn of the year only becomes relevant for staggered withdrawals. If you want to spread two accounts across two tax years, withdraw one at the end of December and the next at the start of January. What matters is the payout date set by the pension foundation, not the date of your application. Plan accordingly if you are withdrawing near the end of the year, to make sure the payment does not slip unintentionally into the following year.

Continue reading in our journal:

• Switzerland’s vested benefits principle
• Tips on the vested benefits account
• Pillar 3a comparison