# Is it worth having more than one third pillar?

> Is it worth having more than one third pillar? We are often asked whether it is worth having two 3rd pillar contracts, instead of just one. The answer is: it depends on many factors, the final capital, what you intend to do with the second pillar, whether it will be used for a mortgage, etc.

- Source: https://thirdpillar.ch/blog/third-pillar-better-one-or-two
- Author: Luis Degange, Pension Expert - FINMA-registered Intermediary (https://thirdpillar.ch/about)
- Published: 2022-09-19
- Updated: 2024-12-02

## Is it worth to have one or two third pillar contracts?

We are often asked whether it is worth having two 3rd pillar contracts, instead of just one. The answer is: it depends on many factors on the purpose for which you do it.

## From the point of view of tax deduction during the contract term:

There is no difference as, for the purposes of the tax declaration, only the total paid in on 31.12, either from one or more third pillars, counts for the tax authority.

## From a tax point of view, when the 3rd pillar is withdrawn, either at retirement or when you make an early withdrawal:

When withdrawing capital from the third pillar, you have to pay income tax at a reduced rate. A note must be made here, however, since the 3rd pillar capital is added to the 2nd pillar capital. Therefore, if you decide to withdraw the second pillar capital as well (instead of the pension), the tax will be higher. Therefore, if the capital is significant, it may be worth considering whether to make only one third pillar, or more than one so that you can withdraw them in different tax years and optimise taxes before retiring.

## From the point of view of benefits and costs:

There is practically no difference between doing one or more 3rd pillar contracts.

## If you are thinking of buying a house:

If you are thinking of using the third pillar for indirect amortisation, or to give it as a guarantee to the bank, then in this case it is better to separate the contracts and make one third pillar to serve only the mortgage, and another for the rest of the available budget. In summary, each person deserves a tailor-made solution, so do not hesitate to contact us for in-depth advice.

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