Since in taxable account your dividend/bond distribution is taxed as income (let's say about 1/4 of today's 2% dividend/bond dis, also 0.5% annually) and you suffer from the wealth tax (around 0.1% depending on the canton you live in), being able to invest "free of charge" (0.57%- ~0.6%) while reducing your taxable income is still very important.
Remember that you have to pay taxes later on distribution. You defer the taxation of your current income and of your capital gains. Given the currently very low tax rates in Switzerland I am not sure that the tax rate on distribution will be lower. For all I know, it might as well be higher, given the government's unfunded future liabilities.
I thus only expect permanent savings from the wealth tax, which is only about 0.1%, and from the extra compounding due to deferred capital gains taxes. An 0.5% extra TER cancels these benefits: even in your calculation, which ignores the taxes during payout, you just break even.
What remains is the greatly reduced flexibility of 3a savings. I do not know when I will be able to access them, and it is not clear how they will be treated if I should ever move to another country. (Presumably they would be taxed much more heavily in that case.) So I prefer to buy low-fee assets like the cheapest of the Vanguard ETFs traded on the Swiss stock exchange with after-tax money.
First, there are no capital gain taxes in Switzerland. Only on real estate. ETF, funds, stocks are never taxed for capital gains, period. Only dividends are taxed, and as income. That could change of course, but I don't see it happening.
The taxes are deferred yes but the percent rate increase with the account. A good solution would be to have around let's say 5 different pillar 3a accounts of 100'000 chf each. You can cash them out one at a time from 60 to 65.
Each time you pay the deferred taxes on it. A baffling ~5000 chf for a 100k account depending on the canton where you live in:https://www.postfinance.ch/de/priv/prod/info/fincalc/cap3a.html/calculator/logicalc/tax/capitalizationtax/Index.do
In total you will pay ~25'000 chf of deferred taxes for 500k chf of capital, 5% of tax rate.
If you don't create the 5 accounts and retire your money at once (500k) you will pay double as much (56k of taxes)
Todays if you make from 80k up to 100k salary the contribution to the säule 3a of 6768 chf will reduce your taxes by an amount of ~1200 chf give or taken.
Let's say that you don't use säule 3a and you have a more aggressive allocation of 80/20 in your taxable account. You can then only invest the remaining money after taxes have been paid so 6768-~1200 = 4600 chf.
Let's assume the growth of 80/20 allocation is ~6% -0.5% of taxed dividend/distributions (1/4 * 2%)-0.1% wealth taxes - ETF costs (0.1 %) = 5.3%
To buy etf you have the swiss stamp duty tax, 0.15% at every transaction + transaction costs let's say a total of 15 chf per 4600 chf of investments, netto investments 4585 chf.
You invest for 40 years (20y to 60y) an amount of 4585 @5.3%. That's roughly 627'000 chf at age 60.
Now let's say you are more conservative and wants a 60%/40% allocation in your taxable account. That brings the rate of expected return down to 5% and a total growth expenses included of 4.3 %. Your final capital will be ~488'000 chf.
And finally let's say you want to invest with the same allocation as the säule 3a of 45% stocks/55% bonds. Let's assume 4% rate of return that goes down to 3.3% with expenses. Your final capital will be 382000chf.
On the other hand you can invest 6768 chf with a TER of 0.57 and a buying commission of 1% with an allocation of 45/55.
Rate of return assumed as 4% - 0.57%TER =3.43%. No other taxes but for the final 5-10% when you cash in the accounts.
Contributions: 6768 - 1% commission = 6700 chf
After 40 years growing at 3.43%: ~576'000 chf
Netto capital after deferred taxes: 550'000 chf.
So if you make a risk-adjusted comparison in which you keep both allocation identical (same risk) but you invest 4600 in taxable or 6700 chf in tax deferred you may get to 550k vs 380k. Thats 170k more just because you were able to invest 1200 chf more and that difference compounded over the years
, amounting to much more than the deferred 25k of taxes. So you have to consider the opportunity costs of those 1200 chf lost to the government.
So while you are right that you greatly gain in freedom if you invest in taxable, at the same time you are forced to take on more risk (for instance 70/30) to barely break even with a 45/55 in tax deferred.
So what I wanted to say is that you everyone has different situations but if you make a risk-adjusted comparison it still is good to invest in the säule 3a.
You just have to accept the greatly reduced freedom, that's for sure, but everyone has different goal and different allocations.
If you want to have an aggressive allocation, then maybe the Säule 3a is not for you. If you don't make 80k of yearly salary, then the säule 3a may not be for you. There are a lot of personal factor to consider.
And by the way, I'm always using a dividend/bond distribution average of 2%. If the interest rate goes up, that can only increase and since you are paying 1/4 of taxes on that as income, it will only get worse.
If Dividend and Distribution go up to 4% annually, you have to pay 1% in taxes every year. That's an huge drag that you don't have in the säule 3a.