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Wealthy in old age

The Crucial Role of Pension Schemes

Pension provision in Germany is based on three pillars: Statutory pension insurance, occupational pension provision and private pension provision. The old-age pension from statutory pension insurance forms a basis, but is often no longer sufficient to ensure the desired standard of living in old age. Additional protection with a private pension insurance, Riester or Rürup pension as well as occupational pension provision can close this pension gap. At FinanXpat, we explain the wide range of statutory, occupational and, above all, private pension provision so that you can look to the future with peace of mind and good security.


Elevate your financial future with FinanXpats expert insights.

Statutory Pension scheme 

Pension provision in Germany is based on statutory pension schemes. For employees, this is primarily the old-age pension provided by the statutory pension insurance scheme. Self-employed persons and freelancers regulate their old-age provision via so-called professional pension schemes. Civil servants in the public sector are covered by the civil service pension scheme. In summary, these statutory pension schemes are often referred to as the first pillar of old-age provision.

Company Pension scheme

The second pillar of retirement provision is the company pension scheme (or occupational pension scheme): As an employee, you are legally entitled to have part of your salary invested and later paid out to you as a company pension. It is up to the company to decide which forms or types of investment (the so-called implementation channels) are chosen. Many employers take company pensions very seriously and support their employees with additional payments and benefits, which are often supplemented by collective agreements or association solutions, for example.

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Private Pension scheme 

The third pillar of old-age provision is private measures that you take yourself to provide for old age. Private pension insurance, but also capital-forming life insurance policies or investments such as funds, shares and real estate can provide such additional financial security for old age. Certain forms of private pension provision, such as the Riester pension or Rürup pension, are subsidized by the state through additional payments or tax benefits.

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