Starting in 2030, we’ll have a problem! – Secure your retirement now.
We’ll guide you step by step through this complex topic and show you which solution suits you best.
“Since pensions will increase less than wages in the future, the gap between pension and earned income will grow, making additional retirement provision increasingly important.” – German Pension Insurance –
Anyone who wants to live well financially in retirement should start planning their finances for life after work now. We explain why this is so important and what options you have. The three pillars of retirement planning show what a stable retirement provision looks like. Learn here how to build your personal retirement plan to secure your income in old age.
The Most Important Facts About the German Pension Insurance
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Why do we actually have a pension problem?
Our pension system, as we know it, was introduced in 1957 with the intergenerational contract.
→ “The young pay for the old.”
At that time, this model worked because there were significantly more contributors than retirees.
Today, things have changed. Germany, along with Japan, is one of the few countries with more deaths than births. As a result, our population is aging more and more, and there are too few contributors for too many beneficiaries.
This is why the intergenerational contract no longer works. A major problem will arise in 2030 when the baby boomer generation retires — the strongest income group will leave the workforce, and not enough contributors will follow to balance it out. That is why the German Pension Insurance also warns about 2030.
How You Can Start Preparing for Yourself Now
- Enough about the facts and current problems. Let’s move on to the options you have to make private provisions.
Statutory Pillar
- There’s not much more to say about the statutory pension insurance, as it was already explained in detail in the first section.
- The basic pension (also known as the Rürup pension) works in payout much like the statutory pension. You only receive a fixed pension payment. The difference is that you save for yourself. You have the option to invest monthly in funds, and the amount you receive in retirement depends on how much you’ve accumulated. Find out here what tax advantages the Rürup pension offers and for whom it may be interesting (link to the dedicated Rürup page).
Occupational Pillar
- The company pension scheme (bAV) is an umbrella term for many possible forms of coverage. This includes, as the name suggests, retirement provision, survivor benefits in the event of death, or disability coverage in case of incapacity to work. Learn more about how the bAV works and what advantages and disadvantages it has here (link to the bAV page).
Private Pillar
- Private pension insurance also comes in many different variations. You have the option of choosing guarantees, or you can take a slightly more aggressive approach with ETFs. It’s up to you which direction you prefer. In addition, there are attractive tax advantages during the payout phase. When selecting your private pension insurance, there are several important points to consider. Learn what they are and how you can save significant taxes with this type of plan here (link to the dedicated page).
- Stocks and funds are probably the best-known investment models after real estate. Here it’s entirely up to you what investment style you pursue, which companies you want to support (or not), and which areas/industries you want to promote. Returns can vary greatly, and you should always account for higher risk.
- Almost every second person in Germany owns real estate. However, many mistakes are made, or some steps are taken too early. Find out what typical real estate mistakes exist and what you should pay attention to when buying your property here (link).
Final Summary
As you can see, there are many ways to prepare for your retirement. Now it’s about creating the right concept from these options. All of these options only truly work when they are combined into a strategy.
This is where we help you.
Together with you, we develop an individual concept from all these options and help you build your perfect financial house.
Do you want to take a step closer to your desired retirement income? Then click the button below and schedule a short 15-minute call with us.
We look forward to meeting you.
