Having your pension fund paid out if you move abroad: Here’s what matters
What options do you have? What needs to be considered when it comes to taxes?
Are you planning to leave Switzerland for a few years — or even permanently? If so, you may be able to have your entire pension fund paid out. If you want to optimize your tax obligations in this situation, you should be planning ahead. Here you’ll find out what points are important to know.
There can be many reasons for moving abroad: love, adventure, or the desire to climb the career ladder. Insurance and pension planning are hardly in the spotlight — but those who plan their move abroad carefully usually look to the future with fewer worries. Here we address the most important questions and provide some tax tips about your pension fund or, more precisely, about your second pillar vested benefits.
“From the age of 58 you can harmonize the demands of early retirement and emigration.”
Can you withdraw your entire pension fund?
That depends on where you are moving to. If you move to a non-EU/EFTA country, you can usually withdraw your entire pension assets. However, if you’re heading to an EU or EFTA country, however, only the non-mandatory part can usually be withdrawn. But there are exceptions.
Let's start with the normal case: The mandatory part of the pension assets usually remains in your vested benefits account until you retire. You can have paid out the rest, the so-called non-mandatory part. The amount of such a withdrawal is stated in your pension documentation. Or ask your pension fund or vested benefits foundation directly.
What do you need to consider in terms of taxes to be paid?
Fundamentally, you will have to pay tax on the withdrawal of pension capital in Switzerland. But with clever planning, you can save on taxes, because your pension capital is taxed at a reduced rate — separately from your other income. You can take advantage of a few special features.
Three important tips before moving abroad
- Voluntary purchases of additional pension benefits
If you buy additional pension benefits, you must wait at least three years before withdrawing this paid-in capital. Otherwise, the taxes saved will be due, along with any default interest. But even here there are exceptions, for example, if you are making these purchases to close a pension gap that arose as the result of a divorce. - Double taxation
In most countries, taxes are due on the withdrawal of Swiss pension assets as well. If the country of destination and Switzerland have a double taxation agreement, you can usually reclaim the Swiss taxes. However, there are exceptions here, too. For example, if the "right to tax" was assigned to Switzerland, as the technical term is known. It is best if you consult a local tax specialist in your new domicile who can tell you which principles apply in your case. - No obligation to withdraw
Of course, moving away does not oblige you to withdraw pension assets at all. You can currently leave your vested benefits in the 2nd pillar up to your 70th birthday.*
* Please note: Discussions on this subject are currently taking place, and there will soon be a referendum on a revision of the law (AHV-Reform 21 in German), which will only allow freedom of movement after normal retirement age if you remain gainfully employed.
Do you have any questions?
Withdrawing pension assets when moving abroad is complex; many questions quickly arise. Your age, your destination country, and your financial situation are just some of the factors that will influence your planning. We would like to propose giving you some advice in an initial meeting, without any further obligation on your part. This way, you can plan your next steps with the knowledge of our experts.
 |
Give us a call:
|
 |
Personal consultingOpen contact form to request a callback or an appointment. |
 |
Request email replyWe will gladly answer your question in writing via email. |
