Germany's Pension Crisis: Act Now With Riester Pensions, ETFs, and Tailored Plans
The German pension system is facing challenges due to demographic changes and funding gaps. The statutory pension insurance currently covers only half of the last net income, leaving a significant pension gap. To tackle this, experts advise developing personal provision strategies early on, considering options like Riester pensions, ETF savings, and tailored private pension plans.
The Riester pension offers tax advantages and allowances for employees and families. It's designed to help close the pension gap by providing additional income in retirement. To calculate this gap, one subtracts the expected statutory pension from the desired net income in retirement.
Contribution years and child-rearing times are factored into the estimate. Gaps in provision are already evident and difficult to close without additional income in old age. ETF savings can help build wealth over the long term with cost-effective index funds, offering another way to bridge the gap.
For self-employed individuals not covered by statutory pension insurance, private pension insurance providers and Rürup pensions are popular options. These tailored plans help reduce the pension gap. The basic pension according to Rürup is particularly suitable for the self-employed, allowing high special expenditure deductions.
With demographic changes and funding gaps potentially decreasing the statutory pension benefit further, it's crucial for individuals to develop their own provision strategies early on. Options like Riester pensions, ETF savings, and tailored private pension plans can help close the pension gap and secure a comfortable retirement.
