- If you start planning for your pension and retirement early, you can invest your money in a variety of ways
- An example: The billing encourages. Two life insurance policies are paid out, an inheritance, the savings account contains a few thousand euros in savings and the sale of the holiday home has also made a difference. This brings together 250,000 euros
- That is a reassuring fortune just before retirement
- But is it really enough for good care?
- And how can this secure and improve retirement income at the same time?
Pensions and pensions: How do you calculate your needs in old age?
Sufficient 250,000 euros on the savings account for retirement savings? You can only answer this question if you know your needs. If I want to keep the standard of living achieved, this corresponds to the sum of my average monthly expenses. It can be determined, for example, by keeping a budget book for a while, which also includes small expenses.
In addition there are one-time annual Payments such as insurance or annual contributions for the club. On top of that. Every now and then larger purchases are due, for example for the replacement of old household appliances, perhaps also a new car. After all, the vacation budget should be included in the bill.
Annual requirement example: How to calculate your monthly financial requirement
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Running costs per year: Rent, electricity, telecommunications, food, clothing etc. 1,400 euros per month. This results in 12 x 1,400 euros = 16,800 euros per year -
For insurance and association contributions, vacation budget and reserve for larger editions, 4400 euros are added, making a total of: 21,200 euros annual requirement, - To determine the monthly required income from the annual requirement, I have to divide the total again by twelve months: 21,200: 12 = 1,766 euros,
There are also taxes and health insurance expenses. Both items are individually very different. For example, private health insurers have to prepare for much higher premiums in old age than members of the health insurance companies.
Very roughly would come in this Trap 130 euros health insurance and 250 euros taxes a month. In any case, the visit to the tax advisor and the demand from the health insurance company help to determine an exact need. Nevertheless, all the amounts taken together result in a first picture.
After that I need 2,146 euros a month.
Statutory pension: How much income is this guaranteed?
Now it’s the other side’s turn. My statutory pension will be about 1,000 euros be. That goes from the Pension information the pension insurance company sends me once a year. In addition there are 80 euros from a company pension scheme and 120 euros from the Riester pension. So that’s a total of 1,200 euros.
Between the Need and the secured retirement income so there is one gap: from 946 euros. Will my assets of EUR 250,000 be enough to fill this gap?
The immediate pension: what is behind this offer?
The insurance companies have recently been advertising with the immediate pension. The principle is simple. The customer pays an amount once and receives a lifelong pension in return. But this convenience and security comes at a price, as independent financial advisor Stefan Adam knows.
“The pensions are too low,” he complains, “often less than 35 euros with 10,000 euros in pension capital.” Assets of 250,000 euros are therefore at best 875 euros, Only those who are sure of getting very old are well served with an immediate pension – as long as expectations are met.
ETFs as a long-term investment are worthwhile
Investing in so-called Exchange Traded Funds (ETF) is more promising. ETFs work similarly to equity funds, but they cost a lot less. You bundle many stocks into one basket. The value then develops in line with the value of the individual shares.
Expert Adam advises ETFs that track one of the major global indices in exchange trading, such as the MSCI World. The index is the DAX of global industry, so to speak. Over the past few years, these ETFs have generated double-digit returns.
Such high returns are unlikely in the long run. But the long-term positive development in stocks can benefit in the form of a payout plan in old age. In this way, the customer subtracts an amount from the ETF assets on a monthly basis. The remaining capital continues to grow.
Voluntary pension contributions: an investment alternative for workers
In times of low interest rates and great turmoil on the capital markets during the financial crisis, statutory pension insurance is proving to be a possible investment alternative for employees. Because there is a regulation that enables employees to make voluntary contributions that lead to a higher statutory pension.
Word is slowly getting around this possibility. ,
It’s about “Special payments to compensate for pension discounts”, With this instrument, insured persons can buy their pension from early retirement. Those who stop three years before the statutory retirement age have to accept a discount of 0.3 percent annually for a month, 10.8 percent overall.
Pension: More information
From the age of 50, this minus can be offset by special payments. This is also possible in installments. However, certain times and periods must be observed. There is a deadline until March 31 for voluntary pension contributions.
The German Pension Insurance Federation and the Federation of Insured Persons provide information on the costs of pension compensation. The decisive factor is how high the expected gross pension is in old age. This value can easily be found in the annuity information sent once a year.
The highlight: Therefore, nobody actually has to retire earlier, but can continue working up to the normal age limit. In this case, the special payment increases the pension entitlement. This has several advantages. The pension payment is secured for life and the insured person benefits from the annual pension adjustment.
More about retirement planning and pension planning:
Our experts present a monthly savings plan with which you can later live carefree. What rights do workers have in relation to the pension in relation to the employer How can workers improve their pensions? There are numerous decisions to be made. If you already have a life insurance policy, you should survive well, whether you keep it at the current low interest rates or maybe cancel it. The basic pension could be paid from 2021. Read here how the new old-age allowance is calculated.
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