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Last-minute pension: This is how you can still build up a fortune after 50 

2022-03-23T04:16:29.866Z


Last-minute pension: This is how you can still build up a fortune after 50  Created: 2022-03-23 ​​05:06 Even for people over 50, it's not too late to worry about retirement. Starting in 2022 is particularly worthwhile. Frankfurt – About 30 percent of people between the ages of 18 and 65 living in Germany have serious concerns about whether they have enough financial reserves for retirement age.


Last-minute pension: This is how you can still build up a fortune after 50 

Created: 2022-03-23 ​​05:06

Even for people over 50, it's not too late to worry about retirement.

Starting in 2022 is particularly worthwhile.

Frankfurt – About 30 percent of people between the ages of 18 and 65 living in Germany have serious concerns about whether they have enough financial reserves for retirement age.

This is shown by a study by the Institute of German Economics.

Young people are reminded time and again at the beginning of their working life of how important it is to provide for their retirement.

Those who start earlier have to put less aside each month and benefit more from the compound interest effect, as reported by fr.de*.

But even those over 50 who realize that their retirement provision is not sufficient can still start with it.

In any case, the salary is often particularly high in this age range, possible children are often already financially independent and those who bought a property early on have no more expenses here either, apart from ancillary costs.

But what kind of pension provision is best for people over 50?

Statutory pension: Accumulate more professional years and voluntarily pay in more

Anyone who finds that he or she has not provided enough for old age can first check whether more can be achieved from the statutory pension. 

Four ways to increase your pension

Statutory pension

Voluntary additional contributions, accumulate more professional years

company pension

Employer-sponsored or subsidized retirement plans

Private pension plan

Save on a money market account or invest in index funds

basic security

Top up if necessary to reach the subsistence level in retirement

A possible mini-job helps to achieve the minimum insurance years of 33 or even 35 in order to receive the basic pension.

This allows people to increase their low pension. 

In addition, since 2017 it has been possible to voluntarily increase your own contributions to the pension fund.

"At the moment it is often attractive for employees over the age of 50 to pay more into the statutory pension," quotes Spiegel Online Gerhard Schuhmacher, managing director of the consulting firm "Die Alten Hasen".

Those who do this in 2022, a year in which a number of things will change with regard to pensions, will also benefit.

Because the calculation basis is the wages of the year 2020. However, the fact that many people were employed on short-time work is not taken into account.

The price for a pension payment point is therefore relatively low.

Company pension: only worth it under certain conditions after the age of 50

Only in some cases does it make sense to invest in a company pension after the age of 50.

This type of pension provision is particularly useful if it is not the employee who pays contributions, but only the employer.

"The company pension scheme is worthwhile if the employer contributes at least 30 percent and you stay below the tax-free limit," quotes Spiegel Online Doris Kappes, financial expert at the Hamburg consumer advice center.

The reason for this is that taxes and contributions for health and long-term care insurance have to be paid when the pension is paid out.

The fact that pension contributions are tax-deductible works in favor of the employer.

In addition, employers do not have a say in which financial product their contributions flow into.

Private old-age provision instead of a pension: Higher returns, moderate risk

The situation is completely different when employees make private provisions, for example in the form of index funds such as ETFs.

Investors should make sure that they take as little risk as possible with part of their reserves, for example by keeping them in a call money account, even if the interest rates are low.

You can invest the other part in ETFs such as the MSCI World.

"At 55, I think an equity quota of 50 percent is reasonable," said Kappes in the Spiegel article.

“From your early 60s, you should gradually switch to safe investments.

But that doesn't mean you can't own stocks at 67."

Basic security: Top up with Hartz 4 if necessary

If you don't manage to provide enough for your pension, you will have to increase it in old age.

The basic security closes the gap between pension payments and subsistence level.

According to the Funke media group, a data query by the left parliamentary group at the Federal Statistical Office shows that the number of pensioners in Germany who are dependent on Hartz 4 has risen to a record high.

While in 2003 almost 260,000 retirees were still dependent on the state subsistence level, the number had almost doubled by September 2021 and was almost 580,000.

(tk with AFP) *fr.de is an offer from IPPEN.MEDIA

Source: merkur

All news articles on 2022-03-23

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