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Why I am no longer insured
My history of the Rürup pension insurance
When I founded my company four years ago, due to the poor prospects, I was exempted from the statutory pension insurance and took out a Rürup pension about a year later. Why? Because I let myself be enticed by an MLP broker and the tax advantages. I was too naive and simply too lazy to deal more intensively with this product and to understand it.
However, I never felt comfortable with this insurance. Only after the same broker had tried to sell me a whole range of active equity funds did I listen to my feeling that said "Something is wrong here ..." and took a closer look at the contracts of my Rürup pension ...
What I found in the contracts was not without: a premium increase of 900 euros to a crisp 1,200 euros per month from December 2016. I had never heard of that before and was quite shocked accordingly. Of course, I didn't have to pay 1,200 euros a month. After thorough research, also with the help of an independent fee advisor, I was shocked to discover that this rapid increase in the monthly fee was accompanied by a Increase in so-called distribution costs went along. Specifically, I would 18,000 euros in fees numbers. In addition to the 4,000 euros already paid to date. As a result, whole 22,000 euros My contributions do not flow into the saved funds, but rather to the broker in the form of a commission be paid out. It makes you feel a little fooled ...
This madness is not an argument against Riester and Rürup per se, because they only arise when contracts are concluded through a commission broker. Nevertheless, I find such occurrences characteristic of the entire industry: It is highly opaque. And with full intent.
After an extensive examination and intensive examination of the concept of the Rürup pension, I decided to make my current contract free of contributions and thus not to make any further contributions. I booked the contributions and fees already paid for myself as sunk costs and deliberately disregarded them when making the decision so as not to fall for this mistake of reasoning.
Reasons against Riester and Rürup
My personal reasons against Rürup are as follows:
- limited availability: Once the money has reached the insurer, I have no control over it and have to wait for the payments to be made at retirement age. Of course, that's exactly the point behind it: You are practically forced to discipline. For me personally, however, it is more important to get my money in an emergency or simply for pleasure. It's mine after all.
- Weak returns: Due to the ongoing fees that you pay to the insurer, the real return is extremely reduced, for example compared to ETFs that you save yourself.
- Lack of confidence in politics: Yes, the Rürup contributions are tax deductible, but who guarantees this for the next 35 years that I have until I retire? If this bonus no longer applies, I hardly see any benefits from a Rürup pension. Surpluses in the development of the funds are of course quite possible. They used to be with life insurance too ... Since I have no influence whatsoever on what business and politics are up to, I would expose myself to their arbitrariness at random. For me, that's pretty much the opposite of financial independence.
- Lack of transparency: I have dealt with the topic of Riester / Rürup for quite some time and I have to say that I still don't have the feeling that I understand everything completely. And I have lost the desire and motivation to invest more hours of my time in order to have more questions than answers in the end. Due to the lack of transparency and the complexity of the entire topic, the costs and benefits of further dealing with this product are no longer in an acceptable relationship for me.
Do it yourself instead of insuring
Personally, I've decided to just invest my money myself instead of hiring an insurance company to do it. Even a "normal" private pension insurance with full flexibility (but without tax advantages) is mathematically not worthwhile: The guaranteed contributions are simply below what I would have if I invested the money myself or even put it under my pillow. Therefore: Itself is the woman!
My retirement plan consists of my ETF portfolio. Every month I automatically pay around a third of my income into a handful of ETFs via an ETF savings plan (with comdirect * and OnVista *) - broadly diversified and inexpensive. So I do what an insurance company would do: I invest money in the stock market. Since I do it myself, however, I have full control, transparency and full disposal over the investments. And I don't have to pay anyone to do this job for me.
Admittedly, this decision was not an easy one for me. I thought back and forth for weeks. Because a certain Need for security is definitely there. Ultimately, I made a decision. I will never know if it was the right one anyway because I don't know what the alternative reality would have looked like. But I now feel very comfortable with it and have the feeling that I have everything (as far as this is possible) under control.
Only the middle class is concerned about retirement
While I was working intensively on the subject, I suddenly understood what it means to belong to the middle class: worry. You worry all the time. Members of the middle class torment themselves with questions like: “Will it be enough for old age? What if the whole economy goes downhill and I don't have insurance? How am I supposed to save so much? "
People who live in poverty do not worry (they have others for that, of course), because they have nothing to lose and no other choice to rely on the state.
Rich people already have their retirement provisions in their pockets and are more likely to worry about how to turn their millions into billions. I would also like to have these thoughts 😉 Hence my conclusion: I have to get out of the middle class. Getting poor is definitely easier than getting rich, but let's say it's less appealing.
Hence my conclusion: I just have to still earn much, much more money and invest so that I soon no longer have to worry about these thoughts and worries. Tschakka!
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