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The German state pension scheme (Gesetzliche Rentenversicherung) is the cornerstone of pension planning in Germany. It has however a major fault - demographically, the baby boom generation is now nearing retirement age and with a current low birth rate, an even smaller workforce is having to pay for this increasing number of pensioners.

The German government has realised that this will lead to lower pension levels and are actively encouraging its inhabitants towards private pension planning. They are doing this through a system of mostly tax subsidised, insurance based solutions:

  • Multiple pension product solutions
  • Significant tax and subsidy benefits
  • Guaranteed return on investments available
  • Large and secure providers
  • All products regulated by the German authorities

What very few expats realise is that they are entitled to the tax benefits as long as they are working in Germany.

State Subsidised Schemes

Riester-Rente: the Government pays yearly subsidies for you and your family towards your pension plan. To get the full subsidy you have to pay 4% of your gross earnings into the scheme up to a maximum of €2,100/year.

Basisrente: this scheme is designed for the self-employed to benefit from, but it is also attractive to people on a higher salary. You can pay up to €23,712/year into the scheme if you are single or up to €47,424 if you are married.

  • Contributions can be offset against tax
  • Guaranteed lifelong pension
  • Protected against unemployment and insolvency
  • Funds-based products
  • Contributions can be guaranteed

Case study – A look at state-subsidised guaranteed retirement benefit for working German residents and tax deduction on retirement savings.

Private Pension Schemes – Your money in a safe place

There are a whole range of private fund-based pension schemes available in Germany that offer the security of the German financial market. They can be used in conjunction with the subsidised schemes and offer very flexible solutions leaving your retirement investments accessible.

Stop losing money that you are entitled to - talk to us today for a free consultation

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