Private retirement provision and free saving alongside financing?

tendenziell eher alles in die Tilgung stecken.

From a rational perspective, in my opinion, that is the right decision!

Interesting topic. I received my pension statement when I "opted out" 10 years ago. It's about 150 EUR pension that I will get someday. There is no other retirement provision.

Currently, I am of the opinion to first aim for complete repayment and only then take care of retirement provision. Until then, I see only our reserve (untouchable) and the house as "security" for old age.

I am not sure if this path is right. Alternatively, I could already pay into Rürup (for self-employed). Problem: money is "gone" and no longer accessible in an emergency. Also not inheritable.

Regards, Steffen

See it like Merlin - I had two life insurances, but I had already canceled them some time ago. I also once let myself be talked into the stupid Riester, where 5 euros a month go towards it ( ). Somehow I never manage to cancel it...

Otherwise, there is a company pension plan that fills the well-known retirement gap nicely (as long as I still work there), besides that only the statutory one. And I certainly won't do more than that - after all, I am building for that.

Rationally considered, there is also nothing against putting a few months' salaries as a safety buffer in a daily allowance account; in fact, it is even recommended to be able to cover unexpected expenses. Ideally, this is already taken into account in the monthly expenses when financing (e.g., in the form of depreciation on the car).

I can certainly understand that it emotionally comforts someone to have a certain cushion, but I also find it contradictory not to touch this cushion at all ( ; no offense! :-*). Certainly, one should not "misuse" it (buying a garden shed with the car depreciation), but why save the car depreciation if the corresponding expenses are then made from the "remaining budget"? For what case was this sum saved? Funeral costs?

Saving for the sake of saving seems to me to be one of those highly irrational, typically German habits. You just do it, for bad times! But that brings us back to securing existential life risks, which on the one hand few actually secure consistently, and on the other hand cannot be covered by any amount of saved money.

In short: If saving additionally, then also purpose-bound and targeted (e.g., for the new garden shed or old age). However, one should always ask whether it makes financial sense. If the bank finances the garden shed at 1.9% while you yourself get 0% interest on the saved money in the checking account and accept an inflation rate of 2%, in the end you not only paid more but also unnecessarily gave up the years of saving for the garden shed.

This applies especially to retirement provision via capital life insurance policies or Riester contracts. A Riester contract with a return of 2% ultimately yields less than having paid off your loan at 3% faster with the contributions.

Interesting topic. I received my pension statement when I "exited" 10 years ago. It’s about 150 EUR pension that I will receive sometime. There is no other retirement provision.

Currently, I think it makes sense to aim for full repayment first and only then to provide for retirement. Until that point, I see only our reserve (untouchable) and the house as "security" for old age.

I am not sure if this path is right. Alternatively, I could already pay into Rürup (for self-employed). Problem: the money is "gone" and no longer accessible in an emergency. Also not inheritable.

Regards, Steffen

In my experience, this path is suboptimal.
Reason:
Adequate retirement provision, which is clearly recognizable as such, remains protected assets in case of insolvency (which of course will not happen to you).
House and any free savings are gone.
Therefore, I would at least pay the amount you would contribute as an employee into the statutory pension insurance into a clearly recognizable pension product without capital option.

Regards, Sylvia

In my experience, the approach is suboptimal. Reasoning: An adequate retirement provision, which is clearly recognizable as such, remains with you in the event of insolvency as exempt assets (which, of course, will not happen to you). House and any free savings are gone. Therefore, I would at least pay the amount that you as an employee would pay into the DRV into a clearly recognizable pension product without capital option. Regards Sylvia

That’s true. But that’s the only argument (insolvency protection). Why do I still not do it? In the event of insolvency, it results in Hartz 4. Then, of course, also in retirement. In other words, more than 1000 EUR per month from the state. The pension provision would have to be at least at this level… actually even a bit higher. As long as this is not the case, in my opinion, retirement provision makes no sense. To achieve 1000 EUR pension, I currently have to save about 1200 EUR per month. But 1000 EUR pension will not be enough to keep the house (even if it is paid off).

My conclusion is therefore: in the event of insolvency (H4), it does not matter whether I have pension provision or not. Assets and house are gone. Basic security from the state is there anyway (quite selfish, I know).

In addition, there is currently still limited deductibility of Rürup. It only becomes really interesting from 2020. Then you can also deposit quite a lot relatively quickly. 2x 20,000 EUR per year.

Regards, Steffen