Is using Swiss pension fund savings to buy a home a smart financial move?

I heard that you can use your Swiss pension fund savings to buy a home or pay off your mortgage. Is this a smart financial move or are my savings best left untouched?

Hi there,

Withdrawing your 2a occupational pension fund savings to invest in a home directly impacts your pension. The pension you receive when you retire is based on a percentage of your pension fund savings. The less savings you have, the lower your pension will be.

You do have the option of reimbursing your pension savings to acheive a full pension. If, for example, you find an outstanding cash deal on a property and are completely sure that you can reimburse the withdrawn pension fund assets in full before you retire, then using pension fund savings for a home purchase can make sense.

However, withdrawing your pension fund assets usually cuts the disability and survivors pensions which you recieve from your occupational pension fund as well as the old-age benefit. This leaves you financially exposed.

A better way to buy a home using pension fund savings is to pledge your pension fund assets as collateral against a down payment or use it to indirectly amortize a mortgage. This allows you to use your pension fund assets to buy a home without actually withdrawing them.

Best regards from Moneyguru

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