Private Pension Solutions
In which cases does a private pension in Germany makes sense for you as an expat?
Almost every insurance company and bank in Germany offers a private pension scheme. Such schemes are extremely flexible.
They not only offer you the possibility of investing in fund selections, both managed and individual, but also offer great flexibility and tax incentives. They are an obvious choice for expats living in Germany.
What a private pension can offer you
Most private pension plans today are fund based offering you the possibility of a good return on your investment even in todays low- interest market. Depending on the amount of risk that you would like to take with your investment, the returns have historically been between 3% and 9% after costs, obviously the higher the risk that you are prepared to take the higher the possible returns however there are at least 5 different risk classes to choose from and there is something there for everyone’s risk profile, ranging from the very cautious to the very adventurous. Due to the compound interest private pension scheme should run for a long time and then before it reaches maturity (when the shares are at a high) to change to a very low-risk portfolio strategy.
You can also select between full or part capital payment or lifelong pension when it reaches maturity. It’s possible to draw money from it at any time should you need to do so. You can even cancel the private pension fund scheme before it reaches maturity whereupon you’ll obtain the amount that has been saved up and until then. However, this has tax drawbacks.
Key features of the private pension plan
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Frequently asked questions
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