3rd pillar for couples: optimization

Whether you are married, in a registered partnership or cohabiting, the 3rd pillar offers specific optimization possibilities for couples in Switzerland. The key is to coordinate your pension strategies to maximize tax benefits and mutual protection.

Double tax deduction for couples

One of the greatest advantages of the 3rd pillar for couples is the possibility of doubling the tax deduction:

Married couples or registered partnerships

Important: only the spouse earning AHV/AVS-subject income can make deductible 3a contributions. If one spouse does not work, they cannot contribute to a 3a.

Simulate your tax savings with our 3rd pillar calculator.

Cohabiting partners

Cohabiting partners are taxed separately. Each partner can:

• Open their own pillar 3a and deduct up to CHF 7'258 (employee with 2nd pillar)
• Benefit from their own tax progressivity (potential advantage over married couples taxed jointly)
• Accumulate deductions across two separate returns

Optimization strategies for couples

1. Maximize both partners' contributions

If both partners work, each should ideally contribute the maximum to pillar 3a. Over a 40-year career, the difference is considerable:

• One pillar 3a only: ~CHF 290'000 in total contributions
• Two pillar 3a accounts: ~CHF 580'000 in total contributions
• With an average return of 3%, the final capital nearly doubles

2. Open multiple 3a accounts

Each partner can open up to 5 3a accounts (common recommendation). The benefit is being able to stagger withdrawals across multiple tax years to reduce tax progressivity. For a couple:

• Up to 10 total 3a accounts (5 per person)
• Staggered withdrawals possible over 5 to 10 tax years
• Significant tax savings at the time of withdrawal

3. Coordinate retirement withdrawals

Married couples are taxed jointly on capital benefits. If both spouses withdraw their 3rd pillar in the same year, the amounts are added together and the tax rate increases. Optimal strategy:

• Stagger withdrawals across different years
• Coordinate with 2nd pillar withdrawals
• Plan withdrawals 5 years before retirement if possible

See our page on retirement withdrawal options for more details.

4. Protect your partner with pillar 3b

Pillar 3b is particularly useful for couples, especially cohabiting partners:

• Free beneficiary clause: designate your partner as beneficiary in case of death
• Protection outside the estate: 3b capital (life insurance) is paid directly to the beneficiary, without going through the estate
• Cohabiting partners: 3b is often the only way to effectively protect your unmarried partner

Married vs cohabiting: comparison

Concrete example: joint vs separate taxation

To understand the tax impact of marital status, let's take a concrete example. Suppose each partner earns CHF 80'000 per year and contributes the maximum to pillar 3a (CHF 7'258).

In this example, cohabiting partners benefit from a lower marginal rate because their incomes are not combined. This is known as the marriage penalty in Switzerland. However, married couples benefit from splitting (dividing income by a factor) in certain cantons, which partially mitigates this effect.

Registered partnership vs marriage: implications for the 3rd pillar

Since the introduction of the Federal Act on Registered Partnerships (LPart) and its replacement by marriage for all in 2022, it is important to understand the differences between the various statuses:

Registered partnership (before July 2022)

Existing registered partnerships remain valid. In terms of the 3rd pillar, registered partners enjoy the same rights as married spouses:

• The registered partner is the 1st-rank beneficiary of pillar 3a
• Taxation is joint (same tax regime as married couples)
• In case of dissolution of the partnership, 3a sharing follows the same rules as divorce
• The registered partner is exempt from inheritance tax in all cantons

Marriage for all (since July 2022)

Same-sex couples who marry since July 2022 are treated exactly like heterosexual married couples. Existing registered partnerships can be converted to marriage, which does not change the 3rd pillar treatment but simplifies the legal framework.

Cohabitation (common-law partnership)

Cohabiting partners have no legal status equivalent to marriage. This has major consequences for pension planning, particularly regarding beneficiary clauses and inheritance taxation.

Advanced 3b strategies for cohabiting partners

Pillar 3b is an essential tool for cohabiting partners who wish to protect their partner. Here are concrete strategy examples:

Cross life insurance

Each partner takes out a 3b life insurance policy designating the other partner as beneficiary. Example for a cohabiting couple aged 35:

• Annual premium: CHF 3'000 per partner
• Duration: 30 years (until retirement)
• Guaranteed death benefit: CHF 150'000 per contract
• Capital at maturity: ~CHF 100'000 per contract (depending on returns)
• Mutual protection: in case of death of one partner, the survivor immediately receives CHF 150'000, outside the estate

Combining 3a + 3b for cohabiting partners

An optimal strategy for cohabiting partners is to combine both pillars. Each partner maximizes their 3a contributions (CHF 7'258/year) for the tax deduction, then takes out a 3b contract for partner protection. The 3a covers personal pension, while the 3b covers the couple's mutual protection.

Beware of inheritance taxation for cohabiting partners

Unlike married spouses, cohabiting partners are subject to high inheritance tax in many cantons. Some cantons like Schwyz levy no inheritance tax, while others like Vaud or Geneva apply rates up to 40 to 50% for unrelated persons. Pillar 3b in the form of life insurance partially circumvents this problem because the capital is paid directly to the beneficiary, without going through the estate.

Practical advice for couples

1. Both partners should contribute: don't concentrate all pension planning on one partner
2. Check your beneficiary clauses: especially for cohabiting partners, the beneficiary clause is essential
3. Plan together: coordinate your withdrawal strategies to minimize tax
4. Think about 3b for cohabiting partners: it compensates for the absence of automatic legal protection
5. Review your pension after marriage: update beneficiaries and tax strategy
6. Anticipate a possible divorce: see our page on 3rd pillar and divorce

For a personalized analysis of your couple's situation, request a free offer. Our partners will help you define the optimal strategy taking into account your marital status, your incomes and your pension goals.

Related guides

• Pillar 3a guide — how it works and tax advantages
• Pillar 3b guide — flexibility and protection for cohabiting partners
• Bank or insurance? — choosing the right solution for your couple
• 3rd pillar tax deduction — optimize your deductions as a couple
• Staggered withdrawals — coordinate withdrawals between spouses