About 40% of German pensioners receive 741-1250 € / month, depending on gender and federal state. And that's without deducting health insurance, long-term care insurance, and income tax.

And if we take into account the mandatory payments, the balance we get is an amount approximately equal to the subsistence level (if not less). Therefore, it is so important to take care of the level and quality of life after retirement in advance. This is especially true for those who moved to Germany as an adult and will not be able to accumulate enough experience for a comfortable life.

One way to protect your savings from inflation and ensure a decent retirement is private pension insurance Basis Rente, also known as Rürup Rente.

RÜRUP-RENTE. WHO NEEDS? DIFFERENCE FROM RIESTER.

In one of the previous articles, we examined what is Riester pension, its benefits, state subsidies and for whom it is not suitable.

Like Riester-Rente, the name comes from the author who developed the retirement savings scheme Bertha Ryurup.  At his suggestion, since 2005 a new form of additional private pension insurance with state support has been introduced. Advantages and disadvantages of this type of insurance:

  • The maximum contribution to the Rürup program in 2023 is €26.
  • In 2023, it is possible to reduce the taxable base up to 100% of the Rürup contributions, but no more than 26 €. Married couples or partners are assessed together and can reduce tax payments up to €528.
  • Like the state pension, pension payments from the Rürup pension are subject to subsequent taxation. If the pension starts in 2023, 83% of the pension is subject to income tax. Pensions starting in 2040 are fully taxable.
     

There are 2 options for Rürup pension:

  • Classic, where the interest rate on savings is 0,5% from 2021, which is very low and, in fact, does not cover inflation.
  • A fund option where savings are invested in one or more funds of your choice and thus a higher return is obtained.

Who is Rürup Rente suitable for?

  • self-employed or freelancersThat do not make mandatory contributions to German pension insurance, or Pension Fund.
  • high income people to reduce the difference between earnings and future pension in old age.
  • For those who are about to retire: with some companies, you can secure your old age with a lump sum for life.
  • Aspiring professionals, business founders or young self-employed – Some companies offer plans with reduced down payments and full disability protection right from the start.

 

Need help choosing insurance? Write us and we will answer your questions in detail.

F.A.Q.

Rürup-Rente is a pension program that was created by the German government in 2005 to support the population in accumulating retirement savings. The Rürup pension is a fully tax-deductible form of private pension insurance. With a Rürup pension you can increase your monthly pension payments and benefit from tax benefits. In terms of its characteristics, Rürup-Rente is equivalent to a state pension.

Pension Rürup is a private pension with tax benefits: contributions (together with contributions to compulsory pension insurance, corporate pension schemes) can be up to €26 or up to €528 (for spouses or registered civil partners), which are jointly assessed and can be written off on your taxes in 53.

Pension Riester – contributions are subsidized up to 2100 euros per year and are tax deductible. Grants are paid for children and insured adults. Thanks to government subsidies, this program is beneficial to people with low incomes and those with children. 

Like the state pension, the Rürup pension is taxable. Until 2040, there will be a transitional provision, according to which only part of the pension will be taxed. In 2023, it will be 83%. This means that out of a pension of 1000 euros, 830 euros should be taxed.

No, the amount of contributions cannot be received in any other way than by monthly pension payments until the end of life. A one-time payment is also not possible. But you can suspend contributions by pausing payments.

Depends on the company in which the contract is concluded. But most often from the age of 62 (the official retirement age in Germany is 67 if you were born after 1964).

Yes, contributions to the Rürup-Rente can be used as proof of financial stability to obtain an indefinite German residence permit (Niederlassungserlaubnis). However, this requires that the contributions have been paid over several years and meet the minimum requirements for the amount of contributions and insurance coverage.

Individuals who are residents of Germany and pay taxes in this country can participate in the program. Rürup-Rente is recommended for those who are self-employed, freelancer, small business owner or working as a consultant. However, in principle, all German citizens and residents who have compulsory pension insurance (gesetzliche Rentenversicherung) can take out this pension plan.

Rürup-Rente has a number of advantages over other pension schemes. First, contributions to the Rürup-Rente are tax deductible. In addition, Rürup-Rente provides guaranteed income on a lifetime basis, which can be especially important for those who are looking for stability in their retirement income.

Need a consultation?

Fill out the form and we will answer all your questions and help you conclude pension insurance.

If you have other questions, you can always contact us:

By email:  info@finber.de

Telegram:  t.me/Finber_support

The fastest way to communicate is via Telegram bot

You need to load content from reCAPTCHA to submit the form. Please note that doing so will share data with third-party providers.

More Information

Add a comment

Your email address will not be published. Required fields are marked *