Enjoy retirement without worrying about money

Retired couple at Lake Constance

With a financial cushion, the evening can be relaxed.

(Photo: dpa)

Düsseldorf Cycling through Europe, spending the winter in the Canary Islands or simply making a pilgrimage for ten weeks – many have the dream of active retirement. But you also have to be able to afford it. The statutory pension is usually not sufficient to maintain the standard of living. Private provision is essential for most.

The rating agency Franke and Bornberg has examined the pension products of insurance companies for private retirement provision for the Handelsblatt. Three product categories went through an endurance test: Firstly, private pension schemes that the state does not support. On the other hand, Riester pensions, which the state supports (page 42). The Rürup pension, also known as the basic pension, is suitable for the self-employed (page 43). In the savings phase, it is interesting for tax purposes.

Pension insurance that combines guarantees and fund investments is currently in demand: “These hybrid products offer opportunities for higher returns through participation in the capital markets. Traditional pension insurance with guaranteed interest rates, on the other hand, are hardly becoming popular, ”says Michael Franke, managing director of the rating agency Franke and Bornberg. “In the ongoing low interest rate phase, insured persons should make sure that the insurance has a high solvency ratio, and a look at the total interest rate is important,” recommends Hermann Schrögenauer, board member of LV 1871. The financial strength of the insurance companies is therefore also part of the assessment.


Statistically, older people need less money to make a living. A rule of thumb is that 70 to 80 percent of your last net income is necessary. The statutory pension is no longer sufficient. Because the pension level is currently 48 percent of the average income. This level is guaranteed until 2025. Experts are predicting a decline to 43 percent by 2030.

Employees should therefore make provisions as early as possible. The average monthly pension gap for 55- to 64-year-olds who are only entitled to payments from the statutory pension insurance scheme is, according to a study by the German Institute for Economic Research (DIW) in Berlin, at an average of 740 euros.

Private pension insurance: flexible arrangement possible

Those who provide for old age should determine as precisely as possible what funds they then need to close the pension gap. To do this, they have to calculate their financial needs and compare them with what income they have in old age. It is important to deduct the expected pension, all income from pension contracts, occupational pension schemes, rental income and regular income from securities from the financial requirement. The result is the pension gap.


Investors have two strong partners at their side: the return and the time. The earlier you start and the higher the return, the greater the compound interest effect. For example, 10,000 euros, which earn five percent annually, become 15,502 euros after ten years, 40,754 euros after 20 years and 81,886 euros after 30 years. The exponential rise comes from the fact that more and more interest income is accumulating, which also pays interest. Small differences have a strong impact: With a three percent interest rate of 10,000 euros after 30 years, the final amount is only 58,054 euros.

Private pension schemes are a standard product for private pensions. Insured persons receive a lifelong monthly pension after the end of the savings phase. You can choose between classic and unit-linked variants or products of the “new classic”.

“I am very flexible with private pension insurance and can choose the level of guarantee freely. In the current interest rate environment, fund-based products make the most sense. They increase the chances of higher returns, ”says Michael Franke. Products without a guarantee offer greater opportunities, but there is no guaranteed minimum pension. Those who want more security can build in a capital guarantee and plan better thanks to the guaranteed minimum pension.


Among the private pension schemes that guarantee a capital guarantee for 80 percent of the contributions, twelve do very well with the highest grade. By far the best test result with 98 out of 100 possible points was achieved by LV 1871 life insurance with the product “My plan with individual premium receipt”. A guarantee of up to 100 percent of the contributions is possible as desired. Those who are willing to take risks and want to take full advantage of the opportunities on the capital market should forego the capital guarantee.

Large selection from the test winner

With a guarantee level of 80 percent, an insured person is guaranteed to receive 146.61 euros per month after 35 years with monthly deposits of 150 euros. With a yield of six percent, the pension would increase to 436.83 euros per month. This is more than most other providers and is an indication of lower costs in comparison. “The customer can choose from a portfolio of around 120 funds for his contract,” LV 1871 says on request.


Stuttgart Life Insurance offers a lot of freedom with the Flex-Rente performance-safe tariff. Here, the insured can choose a guarantee of between ten and 80 percent depending on their security needs. “Part of the money is invested in the cover pool, a second part in the value protection fund specified by the customer and the third part in the so-called free fund,” said a spokesman for the house. The saver can combine equity, pension, mixed and sustainability funds. “The aim is to invest as much as possible in high-return funds while ensuring the chosen guarantee,” emphasizes the Stuttgart life insurance company.

On the other hand, the investment strategy for fund-based pension insurance schemes with no capital guarantee is completely free. Here savers have the opportunity to participate as much as possible in the performance of the stock markets. In return, they are not entitled to a guaranteed minimum pension.


With the test winner Europa Lebensversicherung with the tariff FRV E-FR, the customer can choose from 24 funds from different providers. “He decides for himself which investment plan he would like to use based on his personal situation, his previous pension plan and his savings goals,” reports Europa Versicherung on request. How high the yield is is open. What is certain is that the pension factor is EUR 25.86: for every EUR 10,000 saved, the saver receives a monthly pension of this amount.

Another winner is Ergo Vorsorge Lebensversicherung with the tariffs Ergo Rente Balance and Ergo Rente Chance. With the Balance variant, the customer can invest in over 60 investment funds. He also has the option of switching to the security assets with the fund balance. With the product opportunity, he can redistribute the funds at any time and thus react quickly to trends on the capital market.

More: These insurers perform best for customers in 2020.


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