Pension insurance: Get ready for retirement

Is your pension plan well prepared for retirement?

Image result for pension retirementSport, nutrition and general health – More and more Germans are paying attention to their health. Especially women value a conscious lifestyle, but increasingly just as many men. Last but not least, this is reflected in trends such as vegan nutrition, increased demand for organic foods, fair trade items without the processing of polluting pollutants or the increasing popularity of fitness studios. But how fit is your pension plan? Have you made sufficient preparations not only to start physically healthy but also financially well secured to retire?


Hedging in old age – you should know that

The pension information

The pension information is available every year from the German pension insurance. It shows you what kind of benefits you receive from the statutory pension insurance at the age of you. In addition, the letter informs you about pension entitlements already earned and the amount of your probable pension. This information is important in order to plan how you may additionally secure yourself in the form of a private pension insurance. Or to know what your retirement financial situation looks like combined with a company pension plan.

Good to know: The pension information is provided to all insured persons once a year, from the age of 27, if they have paid contributions for at least five years.

Compulsory insurance for freelancers

Freelancers who are members of certain professional associations must enter so-called pension schemes in order to be covered in old age. Accession is not voluntary, but mandatory. This applies to certain occupational groups such as:

  • doctors
  • psychotherapists
  • pharmacist
  • Lawyers
  • Notaries
  • tax consultant
  • Auditors
  • engineers
  • Architects

Freelancers can then be exempted from the statutory pension insurance because the occupational pension funds pay the retirement pension. Even as an employee in these occupational groups, you can get rid of the compulsory insurance of the statutory pension insurance in order not to have to pay double contributions. The benefits paid then come from the reserves of the respective pension scheme, not from the contributions of the current employees, as is the case with the statutory pension insurance.

Civil Service Pensions

A certain group of people in Germany receives a pension after reaching a certain age, also called retirement pension. These include:

  • Officials, for example teachers
  • judge
  • professional soldiers
  • Church officials
  • Persons who were in public service

The retirement age for retirement is regulated differently in the German Länder. As a rule, civil servants can access this form of pension insurance as soon as they reach the age of 67. However, officials born before 1 January 1964 are subject to different conditions. The old-age security for civil servants is regulated in the law on the care of civil servants and judges of the federal government (BeamtVG).

Are you well secured for retirement? *

How do you calculate your pension insurance?

How do you calculate your pension insurance?

Would you like to know if the protection in old age is sufficient to maintain your standard of living and to have nothing to do without in your old age? The amount of the statutory pension results from the contributions you have paid during your working life. You can take these from your pension information. This includes:

  • Contribution to the statutory pension insurance (depends on the amount of your earnings)
  • Contributions that your employer has made for you, for example in the form of a company pension plan
  • Contributions you have made to a private pension scheme

To calculate your pension, you must consider the following variables.

earnings points

Every year you receive credit points on your retirement account. The average fee is € 37,103 in West Germany and € 33,148 in East Germany. If your income equals this average income, you will receive a salary point for it. If your earnings are higher or lower, the salary points will be increased or reduced accordingly.

access factor

The basic access factor is 1.0. This is used to calculate the pension if you retire when you reach the standard age. If you retire earlier, there will be discounts. If you work longer, you will receive supplements.

pension type

A factor of 1 is calculated for the retirement pension. Keep in mind, however, that this factor differs from other forms of pension, for example, if you want to calculate your earning, widow, widower or orphan’s pension.

Current pension value

The current pension value indicates the value of a remuneration point in euros. The amount of the remuneration point is the following values:

  • East Germany: 29,69 €
  • West Germany: 31,03 €

Example for calculating a pension

Image result for calculating pensionAn insured person in West Germany reached 34.1223 earnings points at the beginning of retirement in the statutory pension insurance. He retires upon reaching the standard retirement pension. This results in the following values ​​for the individual quantities:

EP = salary points = 34,1223
IF = access factor = 1.0
RaF = pension factor = 1.0
RW = current pension value = 31.03

The formula for calculating the pension is: EP x ZF x RaF x RW

If you transfer the numbers into the formula, the result is a pension amount of € 1,058.81. Payments for health and long-term care insurance (about 11.20 percent) and taxes (up to 15 percent) are deducted from this amount. After deducting these costs, many consumers fear that they will no longer be able to meet the current standard of living in retirement. Therefore, contact us and provide additional financial security in old age. Your 1822direkt offers you attractive forms of private old-age provision, such as AllianzPerspective or Allianz BasisRente.

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