Heidelberg – Many people put aside money for retirement. But that alone is usually not enough: successful retirement planning also includes the right investment strategy.

Retired people are mostly provided by the pension. They get according to a statistic of the German pension insurance federation according to on the average about 1,300 euro monthly. But many have also done something for old age. If the money is enough to live as long as possible, the capital should be well spent. The financial plan and the investment strategy have to be produced, for example for an amount of 60,000 euros.

How much courage can I afford in investing?

“The answers depend essentially on the investment strategy,” explains author Isabell Pohlmann. She has written a financial advisor for the second half of life for Stiftung Warentest. Pohlmann advises, as a decision-making aid, first to compare the usual expenses and revenues and to calculate with the net amounts: “Some people forget that, for example, social contributions are due on the statutory pension or company pensions”. In addition, more and more taxes are payable on income in old age.

In addition, a factor that should be kept in mind despite current concerns about deflation: the inflation rate. Already two percent inflation per year nibble strongly on pension and capital. A 65-year-old retiree would have to set about 30 percent inflation by 2030 – a pair of cheap socks could cost the then 80-year-old no longer 1 euro, but 1.30 euros.

Should I play it safe or play at risk?

In addition to Kassensturz and individual wishes, one’s own willingness to take risks is taken into account. Someone who gets along well with the pension and is more risk-averse, has other options than a retiree who has to play it safe and make a monthly contribution out of the 60,000 euros of capital. These senior citizens Pohlmann and the financial book author and lecturer Martin Kinkel recommend to think about a private pension insurance.

The capital flows wholly or partly into an insurance contract. In return, there is a lifelong immediate pension – for example, 250 euros a month. However, Kinkel draws attention to several snags: Security is paid at a lower rate of return compared with riskier assets such as equities. In addition, the capital is gone in one fell swoop. Neither a nest egg nor holiday money would be there. Unless the pension itself would be saved up again.

How do I make sure that the spouse benefits as well?

Important to note: The monthly supplementary pension ends with the death of the policyholder. The spouse will only continue to benefit if a minimum payment period has been set by contract from the outset and this is still in effect on the death of the policyholder. For this additional hedge the insurance company usually takes a premium in the form of a slightly lower monthly payment.

Higher risk, but the chance of higher returns: This formula can be an investment in shares or equity funds summarize, which can also consider retirees depending on their personal situation. Beyond the annual dividend payment, investors benefit from potential price increases. The disadvantage: The current entry prices are high, the risk of a crash as well. In addition, the dividend will only be paid once a year.

How do I go about investing in stocks?

Pohlmann recommends not to put everything on one card, but to combine riskier and safer investments. A middle ground is the combination of bond funds and equity funds.

“Depending on my willingness to take risks, I use the equity component higher or lower,” explains Pohlmann. For this variant, as well as for pure equity exposure, an investment horizon of 10 to 15 years should be envisaged – something could be left for the heirs. If you invest your money in exchange-traded funds (ETFs), you can use an Excel spreadsheet to build your own withdrawal plan and sell it as needed. Risk here, too: “If the price falls, the money can be over before the time,” says Kinkel.

Checking account or call money deposit?

Simply parking the € 60,000 in the current account is the most durable but least rewarding option. The reason is the extremely low interest rates.

If, instead, a return of two percent, for example, via a money market account, could be achieved, an additional benefit of 1200 euros per year would result. If capital remains untouched, it extends beyond the end of life. Stefan Albers, President of the Federal Association of Insurance Advisers, has another option with capital preservation in place: a bank disbursement plan. With offers with 1,5 per cent interest savers get in retirement age monthly 74,49 additionally.


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