The pension system in Germany has changed drastically since 2005 (AltEinkG). It is now becoming a building-block based system known as the ‘three-layer model’.
The first layer covers the basic provision, which includes the statutory pension insurance, pension schemes of the chambered liberal professions (lawyers, doctors, architects) and the Rürup or Basis Rente pension.
The second layer is intended mainly for employees and includes different forms of tax-subsidized pension schemes, including company pension schemes, known as the BAV and the Riester subsidy.
The third layer is designed for private pension schemes, such as private life insurances, income protection, pension insurance or “offshore” (capital building) pension plans. In addition, saving plans for funds can also be used for private provision.
No ‘one solution fits to all’: Our Expertise
Almost every self-employed or employee is covered by the first layer of the German retirement model. It is then up to the individual to save up additionally in layers one, two and three. It is evident that the public pension will face serious demographic problems in the next decades and most likely will not be able to pay out sufficient pensions later in life. Therefore, additional pension savings are strongly advised for a safe and secure future. Even the Deutsche Rentenversicherung (DRV) yearly letters emphasis the importance of such additional savings.
Which pension scheme is the right one for you depends on numerous factors. It depends on whether you are employed by a company or self-employed, whether you want to take advantage of governmental subsidies or not, whether you are single or have a family, and finally they years left until you retire. It is our job to assist you in developing the most suitable and individualized pension planning strategy, one which will meet your unique personal situation and goals. For this reason, a custom-tailored consultation is necessary. Our team has had long-term experience with expats and have developed a specific know-how in this area, therefore making us the ones to turn to for the best advice in this area. Irrespective of whether you decide to return to your country of origin or remain in Germany, such plans are ideal because they are easily transferrable worldwide.
In some cases, the acquisition of a permanent residence permission in Germany is required for particular pension insurances and varies from city to city. We have all the information necessary to assist you. A thorough overview with you will give us insight into what sort pension plan will best satisfy the requirements necessary in order to receive your Niederlassungserlaubnis (permanent residence permit). We are here to assist you!