What Is a Rürup Pension?
- Similar to the statutory pension insurance, you cannot access the money you’ve paid in until retirement. If you can’t or don’t want to contribute anymore, you can only make the contract contribution-free. Lump-sum withdrawals during retirement are not possible.
- The Rürup pension is not freely inheritable. Normally, in the event of death, there is no payout to heirs. However, inheritance can be added as an extra benefit in the form of survivor protection. Possible beneficiaries are the spouse or a child in education up to the age of 25.
- The Rürup pension does not use a classic pay-as-you-go system, where “the young pay for the old,” but rather a funded system. This means you pay into your own pot, from which you later receive your individual pension payments.
Duales Studium Sales & Management B.A. (w/m/d)
Hamburg hybrid 01.06.2023
Ausbildung zum Kaufmann für Versicherung und Finanzen (w/m/d)
Hamburg hybrid 01.06.2023
Werkstudenten | Online Marketing
Remote bundesweit 01.06.2023
How Does a Rürup Pension Work?
- The classic pension insurance promises you a guaranteed pension. This means you know from the start what you’ll get in the end. The problem, however, is that with new contracts, your money is invested in fixed-interest securities, which currently yield very low returns and therefore lose a lot of performance. Still, it has its place for self-employed individuals who are close to retirement.
- A unit-linked pension insurance has limited or no guarantees, depending on the provider and product. Part of the money is invested by the insurer at fixed interest, while the other part is invested in equity funds. The allocation depends on how security-oriented you want your contract to be. Our tip: The younger you are, the less guarantee you should choose. With a long contract term, your risk in the stock market decreases over time.
Who Is the Rürup Pension Worthwhile For?
First of all, it should be said that anyone can take out a Rürup pension. However, the Rürup was originally created for the self-employed. A Rürup contract then serves as a replacement for the statutory pension — or as an additional monthly payout in retirement.
But whether the Rürup pension is worthwhile for you depends on a few individual criteria:
Are you self-employed or employed?
Are you looking more for flexibility or more for security?
How high is your income, and how much disposable income do you have?
What do you envision your retirement to look like?
We’d be happy to help you with all these questions and show you whether a Rürup pension is the right path for you or not.
Advantages and Disadvantages of the Rürup Pension
| Advantages | Disadvantages |
| Possible reduction of your tax burden | You cannot access your paid-in money until retirement age. |
| A basic income in retirement you can rely on | Limited inheritability for your dependents |
| If you, as a self-employed person, ever face financial difficulties, the Rürup pension is Hartz IV protected and cannot be offset | A Rürup contract cannot be canceled. You can reduce your contributions or make it contribution-free, but the payout will still only be as a pension in retirement |
What Should I Pay Attention to When Taking Out a Rürup Pension?
When taking out your Rürup pension, you should pay attention to the following points:
How high are the contract costs?
A good indicator for this is the so-called effective costs according to § 2 VVG-InfoV. Don’t get confused here, though. For a real comparison, make sure that the key figures (term, type of Rürup), and the funds offered are the same. Otherwise, the effective costs can easily be distorted.
Is rebalancing possible?
Rebalancing is a system that regularly resets your fund allocation back to its starting point.
Imagine we start a company together. Our company sells sunglasses and umbrellas. In summer, sunglasses sell very well and generate profits. We use these profits to invest in umbrella production, since no one wants them at that time, making them cheaper. Thanks to this smart purchase, we earn higher profits in winter, when umbrellas are in higher demand. And we repeat this cycle year after year. That’s the basic idea of rebalancing. This system is important because it can increase your returns by around 0.5%. (Study source)
How large is the fund portfolio of the provider where you sign the contract?
Your contract will likely run for 20–45 years. During that time, you may need to adjust your investment strategy. That’s why it’s important that the provider offers a wide range of funds.
How solvent is your chosen provider?
If you select a Rürup pension with guarantees, it’s crucial to know how solvent the provider is. In the event of insolvency, there is a backup insurer covering most of it, but you’d only get part of your money back. With 100% fund allocation and 0% guarantee, this matters less, since in case of insolvency you can simply transfer your fund shares to your own portfolio. You can compare insurers’ solvency ratios here.
How good is the company’s customer service?
You will have to contact the provider of your Rürup pension from time to time. The real question is: how long do you want to wait on hold, how friendly should the staff be, and above all, how competent? Here, your advisor’s experience as well as customer reviews play a major role.
