2023-11-04 21:59:50
The retirement planning advisor for the German Pension Insurance will soon be a grandfather for the fifth time. And you’re already thinking about your child’s retirement planning. Occupational disease, you could say. Or the many years of experience in advising people who are stumbling unsorted into retirement.
Die German pension insurance advises everyone on the topic free of charge. Nevertheless, we are only the second or third consultation on retirement planning at a pension insurance location in Hesse this year. It is a protected space that the pension insurance offers for this. It does not pass on the data to banks and insurance companies so that they can pounce on people who are inadequately prepared for old age. There are also no advertising flyers from the financial industry whose products promise aging in security and prosperity, of course worry-free and easily accessible.
There are lots of sayings hanging on the wall. For example: If you don’t know your destination, you can’t find your way. Appropriately, we didn’t answer the part of the “Questions to Prepare for Your Personal Retirement Planning Discussion” that asked us to estimate financial needs for our own retirement. “That’s usually the case,” the consultant notes. “No thought is given to the topic.” In the end, it will not really be possible to answer whether our needs will be met in old age, the actual goal of the advice. We consider it pointless to estimate in November 2023 what financial needs we will have in the years from 2045 onwards. The vicissitudes of life are just as incalculable as the political and economic developments up to that point.
Complex topic reduced to two pages
In view of the uncertainty that life brings with it, it would be negligent to refrain from considering the topic of retirement planning. This appointment with the pension insurance alone brings with it many enlightening moments. We still don’t know how much child-related costs we will probably have in 2045 and what the maintenance of the property we will then cost will cost (we don’t even know that for next year or the year after). The consultant also didn’t get his crystal ball out for us to comment on inflation, pension adjustments and the number of people in the workforce in the coming years and decades.
But he reduced the whole topic to two pages with numbers, giving the matter a clarity that was previously missing. Such an appointment forces you to dig out the latest pension information (extremely informative and well-prepared letters, by the way). The appointment also forces you to dig through the company pension plan documents. Likewise for the Riester pension and term life insurance. The appointment is worth it just for this little bit of hard work.
Having set out with more than a kilogram of paper documents, the consultant reduces the matter on site with a light hand to five pieces of paper, each with a relevant number. On the one hand, this is the amount of the expected monthly statutory pension, on the other hand, the expected payment from the company pension plan and finally the expected Riester pension.
More than a million pension! Maybe not even enough for a loaf of bread.
Added up for both spouses, the result is a very pleasing amount, which would add up to more than a million euros over their life expectancy. But before the imagination has the opportunity to imagine a life of luxury, the consultant shows how much and yet so little a million is. It assumes annual inflation of 1.5 percent until retirement. This means that the purchasing power of the pension decreases by a third. He mentions health and nursing care insurance, which he deducts at 12 percent. And he doesn’t ignore the tax, which should arise “according to the formulas of the Federal Ministry of Finance”.
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