Hello, how do you want to discuss your pension plan options?

Pensionfriend is your digital companion and advisor on the way to a financially safe and sound future. We help you evaluate your individual pension needs and the best solution to get to a solid pension. 

Germany's pension system is immensely complex. We have therefore made it our job to understand it better than anyone. And we want to use those insights to help you navigate the system and get the best solutions.

In Germany, for nearly all, the best way to supplement your pension, with current interest rates, is through real estate or with a private pension insurance. Pensionfriend has therefore focussed on finding a low-cost solution to offer a private pension plan. 

Our Pensionfriend Pension Plan is an ETF-based private pension insurance. In addition to low cost, we have focussed on finding ETFs that outperform the best standard stock index. We apply unbiased data methods and fundamental economic and financial insights to select among 500 ETFs, a superior ETF mix, which outperforms the MSCI World index by 2 %. And finally, you don't need to worry about rebalancing your portfolio, our algorithms take care of that for you and eke out yet some further extra return.

In our article Private Pension Insurance in Germany: Overview & Best Options you can learn more about the various solutions (and their pros and cons).

In a nutshell, the reason why most alternatives do not work is that they de facto limit the investment to products with 0-2 % return before cost, have disproportionate costs (1,5-4 %), and or have a sizable drag in the retirement phase as assets are no longer invested. We quantify exactly the after-tax benefits of each product, as this is the only way to measure and compare the impact of the various costs and benefits.

The tax benefit of your pension plan with Pensionfriend is that:

• You pay capital gain tax only once, as the private pension functions as a tax wrapper namely when you take out the money. If you would instead have an ETF portfolio with a broker, you pay tax every year on the gains beyond the threshold. The big drawback of that is that the tax you paid is no longer invested and no longer earns money for you.

• Only half of the return on your investments is subject to taxation if you pay it out at a lump sum from age 62 onwards and if you have held the pension contract for more than 12 years.

It can be attractive to take your payments in different tranches to reduce your tax liability as your pension income is much lower. Most likely, you will not pay more than the normal capital gains tax of 26,375 %.

We at Pensionfriend are fully transparent about our simple low-cost structure: We only charge 0,79 % for the pension plan per year and that´s it: No hidden fees, no closing costs, not even a cancellation fee if you do not want to continue your contract.

This service fee is based on your average fund assets per year and is deducted from your capital on a monthly pro-rata basis.

For smaller contracts, we charge a 5 EUR “fee” per month until the value of your contract reaches 10.000 EUR. But this is not a real fee: the 5 EUR are invested in a loyalty fund and the whole sum will be transferred back to you at age 62; when the tax benefits of a private pension plan are available. This loyalty premium can be avoided if you start Pensionfriend with a 10k one-time investment.

For the ETF we have pretty low running costs (0,15 % - 0,28 %) depending on which ETF portfolio you choose. These fees are going completely to the ETF provider.

Compared to ETFs that track the same stock index you buy through a broker you have three major benefits:

1. A tax-efficient structure where you only pay half the capital gains tax rate once at the end, instead of every year. This saves the average user 0,6-1 % per year over a 30-year period.

2. We rebalance for you, so you don't have to be bothered. Moreover, our rebalancing algorithm can add about 0,1-0,2 % per year.

3. We pick ETFs that cost less and even earn some side fees that get reflected in an extra appreciation. This saves the typical user 0,2-0,4 % annually over the medium term. Compared to other pension plans, a huge benefit is that you have no large upfront fees. This means you are not locked in due to the cost you already made. It gives you flexibility. Moreover, we work with the lowest-cost insurance companies to bring you these offers. And don't be mistaken: higher cost does not mean better returns. Higher-cost insurance companies just have higher profits and advertising budgets. The underlying risk is exactly the same. With Pensionfriend, you can choose out of 500 ETFs, but we recommend our Pensionfriend ETF mix, which outperforms benchmarks like the MSCI World and S&P 500 in unbiased data trials and in line with fundamental economic logic.