Tax and mortgage

How to save on taxes?

Reaching retirement is often perceived as a period of reduced taxes. However, this reduction is often less significant than expected. Even though the income you receive from your AVS pension will be lower than your former salary, many tax deductions will no longer be possible, such as contributions to the third pillar. Therefore, it is essential to carry out long-term tax planning to optimise and save. We advise you to conduct a wealth assessment; our experts will then be able to offer you the best solutions.

It is also important to note the tax differences between cantons. For example, a retired couple receiving a pension of 150,000 CHF pays an income tax of 22,467 CHF in Geneva, 31,284 CHF in Lausanne, and 32,316 CHF in Neuchâtel.

Pointers to take into account:

• Contributions and purchases: For future retirees, Pillar 3a contributions and pension fund purchases can be tax-efficient, as the amounts paid in can be deducted from taxable income.
• Staggered buy-ins: A staggered buy-in into the pension fund over several years is often more advantageous than a single buy-in. If you opt for a lump-sum withdrawal, you must make your purchase no later than three years before retirement.
• Pillar 3a: It can be beneficial to withdraw Pillar 3a assets and pay them into the pension fund later. This is because the tax savings from a purchase are generally higher than the tax due when the 3a assets are paid out.
• Pension fund: When leaving your pension fund, check whether it is possible to transfer your assets to two separate vested benefits accounts.

Careful tax planning and an understanding of the options available can greatly improve your financial situation in retirement. Don't hesitate to ask our experts to guide you through the process.

Finding the right mortgage strategy

Upon retirement, many people wish to minimise their debts. They often consider paying off all or part of their mortgage using their providence assets. However, this approach is not always the best option; it is essential to carefully examine the advantages and disadvantages.

Reducing the mortgage inevitably results in a decrease in mortgage interest. However, this also has tax repercussions, as the deduction of interest becomes less significant. By paying off their mortgage, one also forgoes the potential income that this money could generate if invested elsewhere.

It is recommended for future retirees to decide, a few years before retirement, whether they wish to amortize their mortgage and to determine the amount to allocate for this amortisation. Your mortgage strategy should be adjusted accordingly.

The choice of mortgage strategy has a significant influence on interest charges. This strategy is based on the right mix between different mortgage models and maturities.

The choice will be guided by three important points:

• What mortgage interest charges can you afford and for how long?
• How long do you wish to be tied to your mortgage?
• How will interest rates evolve?

By planning carefully and considering these factors, you can optimise your financial situation in retirement. Do not hesitate to consult our experts to work out the mortgage strategy best suited to your needs.