The pension system in Germany has changed a lot since 2005 because of a new law called AltEinkG. Now, the pension system is built in parts, called the ‘three-layer model’.
The first layer provides basic pension coverage. This includes the regular state pension insurance, pension plans for certain professional groups like lawyers, doctors, and architects, and a special private pension called Rürup or Basis Rente.
The second layer is mainly for employees. It includes different pension plans that get tax support, like company pension plans called BAV and a government help called the Riester subsidy.
The third layer is for private pension plans. These include private life insurance, income protection, pension insurance, or special savings plans called “offshore” pension plans, which help you build money for retirement. Also, saving plans that invest in funds (groups of different investments) can be used to save money for your private pension.
No ‘one solution fits to all’: Our Expertise
Almost every person who works for themselves or for a company is covered by the first layer of the German pension system. After that, it is up to each person to save more money in the first, second, and third layers. It is clear that the public pension system will have big problems in the coming years because of changes in the population. Most likely, it will not be able to pay enough money to people when they retire. Therefore, it is very important to save extra money for your pension to have a safe and secure future. Even the Deutsche Rentenversicherung (DRV), the German pension insurance, highlights in its yearly letters how important these extra savings are.
Which pension plan is best for you depends on many different things. It depends on if you work for a company or for yourself, if you want to use government help or not, if you are single or have a family, and how many years you have left before retirement. Our job is to help you create the best and most personal pension plan that fits your unique situation and goals. That is why a consultation made just for you is necessary. Our team has many years of experience working with expats and has special knowledge in this area. Because of this, we are the right people to ask for the best advice. Whether you decide to return to your home country or stay in Germany, these plans are good because you can easily move them to other countries around the world.
In some cases, you need a permanent residence permit in Germany to get certain pension insurances. This rule can be different depending on the city. We have all the information you need to help you. A detailed discussion with you will help us understand which pension plan best meets the rules needed to get your Niederlassungserlaubnis (permanent residence permit). We are here to help you!