Particularly in old-age provision, you have a very long investment horizon at your disposal, which allows you to endure short-term fluctuations much better. This is essential since the capital paid-in is tied up and can only be withdrawn in exceptional cases before reaching the normal AHV age.
Those who do not intend to withdraw the capital at an early stage in the next few years, e.g. for the acquisition of residential property or self-employment, have a very long investment horizon and thus a high risk capacity. In the long term, higher returns are achieved on the stock markets. In addition, the particularly long investment horizon helps to withstand major crises.
The fear that one might be investing just before the next stock market crisis is justified, but this is put into perspective by the regular (monthly, quarterly or annual) payments into the third pillar. These regular payments result in fluctuations being smoothed out to a certain extent. For example, if you make a monthly payment, you pay a high price before the crisis and accept a loss on this amount in a crisis. During or after the crisis, however, you will buy at cheaper prices and rather make a profit if prices increase again. This is also referred to as the “average cost effect”.
It should be noted that Pillar 3a is also an optimal vessel from a tax point of view. In addition to the one-off tax saving due to the deductibility of 3a deposits, current tax effects also benefit from this. For example, wealth taxes as well as income taxes on interest and dividends are no longer applicable, which means that the compound interest effect can have its maximum effect, since nothing is deducted from the basis. The assets are taxed only once at a preferential rate when they are paid out. Thanks to our unbeatable conditions (investment from CHF 1, interest-bearing retirement savings account, no investment in negative-yielding bonds, up to 100% equity, extremely low average total costs of 0.44%, no minimum fees etc.) the saving of securities in the 3rd pillar is more effective than in private savings! Or where else can you invest your money in such a cost-effective and tax-efficient way?