financial security in old age

Strategies for financial security in old age – tips for improving your pension independently Many people wish for a peaceful, secure old age - but the reality is that the statutory pension is often not enough to maintain the usual standard of living. Demographic change is making this situation worse: in 1960, there were six people in employment for every pensioner, filling the pension funds with their contributions. Today, there are only 1.8, and forecasts for 2050 assume only 1.3 contributors per pensioner. It is therefore more important than ever for everyone to plan their own financial security early on. Even those who are already preparing for retirement can still make targeted provisions. Here you will find the best strategies for a financially worry-free old age. Different ways to improve your pension A secure retirement begins with choosing the right pension strategy. The state-supported pension options such as the Riester or Rürup pension are particularly suitable for employees and the self-employed, as they offer you tax breaks and allowances. The Riester pension aims to make use of state allowances and tax advantages, while the Rürup pension is particularly interesting for the self-employed, who often do not have a company pension plan. Company pension plans (bAV) also offer a good option for employees. Through tax-privileged payments and often subsidies from the employer, you can build up valuable reserves for your pension even in the last years of your career. Regular savings – a solid foundation No matter how old you are, regular savings will help you build up a cushion for retirement. With a fixed savings plan, building up assets remains manageable. If you are already thinking about retirement, you should make sure to choose savings plans that offer flexibility in case the money is needed at some point. Call money accounts offer quick availability, but often with low interest rates. Fixed-term deposits are well suited for short to medium-term savings goals, as higher interest rates are possible here than with call money - but the money is not available for a set period of time. A fund savings plan can also be useful, especially if you invest in funds that are designed for security and lower fluctuations. Regular savings are worthwhile, even if the period until retirement is shortened - it gives you additional security. Investing in stocks and ETFs for long-term growth Many people overlook the possibility of investing in stocks or exchange-traded funds (ETFs). This type of investment is actually not that risky if you approach it correctly and diversify your investments. Stocks offer you a stake in companies and thus the chance of a return, while ETFs, as collective funds, offer broad diversification and take away the risk of individual company results. For those who have already started planning for retirement, ETFs are ideal because they fluctuate less than individual stocks and have lower fees. With a longer investment horizon until or even during retirement, you can balance out possible market fluctuations and build up your capital sustainably. A mix of solid ETFs and stable individual stocks offers you the chance of a profitable investment - even with a manageable budget. Real estate as a stable retirement provision Real estate is an attractive way to secure a long-term source of income and stable capital growth. Buying a property offers you rental income and potentially an increase in value that protects your capital stock in old age. For many, a condominium is an ideal solution to either live in it yourself and save on rental costs or rent it out and generate additional income. Real estate funds also offer an interesting alternative if you want to enter the real estate market without having to take on the challenges of maintaining and managing a property. However, keep in mind that purchasing real estate usually requires equity and loan financing, which you should plan carefully. Despite the higher entry costs, real estate remains one of the most stable investments and therefore one of the safest forms of retirement provision. Additional income and flexible work in old age If you want to remain active alongside your pension and secure additional income, there are many options. Mini-jobs in particular are a good way to work flexibly in retirement, as they are often tax-free and there are no social security contributions. Freelance work can also be a good addition. If you are considering continuing to use your professional skills, you can continue to generate income in an independent and flexible way. Digital offers the opportunity to offer consulting services or sell your own products online. With all of these options, you should make sure that your income does not exceed the tax allowances in order to continue to benefit from the tax advantages as a pensioner. Flexibility and diversification in the investment portfolio As you get older, it is especially important to remain flexible and to structure your own investment portfolio in such a way that you can react to changes in the market situation or your own financial needs. A broad diversification of investments - e.g. in stocks, real estate and safe bonds - protects you from the risks of a single asset class. This way, you can manage your capital more securely by distributing it across different types of investments. Regular reviews of your portfolio help you adapt it to your personal needs and market conditions. A mix of fixed-term deposits and higher-yielding funds offers you a balanced ratio of security and potential returns. Insurance as part of the protection In addition to the usual savings and investment options, you should also consider certain insurance policies that will protect you in old age. Long-term care insurance is particularly important because the likelihood of needing care increases with age. In an emergency, it covers a large part of the care costs, thus easing the burden on your budget and your relatives. For those working close to retirement, it is also a good idea to take out disability insurance to ensure financial security in the event of an early retirement. Finally, private accident insurance tailored to the needs of older people can be a useful addition, as the risk of falls or accidents tends to be higher in old age. Tax optimization and allowances in old age As a pensioner, you have access to various tax advantages that can ease your financial situation. One example is the basic allowance, which allows you to have a tax-free income, or the age relief allowance, which provides a lower tax burden for additional income. If, for example, you have extraordinary expenses such as medical and care costs, you can also deduct these from your taxes. Here, it is worth taking advantage of the tax optimization options and making your own pension and additional income as tax-free as possible. Conclusion There are numerous ways to top up your pension even in old age and to live a financially worry-free life in retirement. With the right combination of saving, investing and a well-thought-out insurance policy, you can ensure a solid financial foundation. You are responsible for your own financial future - but even if retirement is approaching, there are still many options that can provide you and your family with long-term security.

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