The clever way to invest in ETFs for Self-Employed in Germany

Discover the Clever Way for Self-Employed Professionals to Invest in ETFs for a Safe & Secure Financial Future

As a self-employed individual, you have three options:

• Buy a Rürup plan designed for the self-employed

• Invest in a Private Pension Plan (PPP)

• Voluntarily enroll in the public pension

While we offer Rürup plans, we generally counsel against them due to:

• Taxation in retirement on all payouts: This includes your contributions, which largely offsets the tax benefits.

• Inflexibility: You cannot withdraw your money and must take an annuity (fixed monthly pension) at the end.

• High cost of the annuity: An annuity pays roughly 55 € for each 100 € accumulated, reducing the benefits. Moreover, it barely earns additional income in retirement, as a proper investment would do.

• Lack of beneficiary benefits: Your beneficiaries receive nothing unless you arrange for a survival pension, which reduces your pension.

Instead, we recommend:

• Investing in a flexible PPP when you are at a younger age allows you to build wealth, use it as collateral for a house, and later generate a pension.

• Voluntarily enrolling in the public pension (GRV) from the age 50-55 to provide a basic pension for life, with tax-deductible contributions, but without the high cost of an annuity.

Pensionfriend's Private Pension Plan (PPP) will yield you a better pension than a Rürup plan unless you if virtually no income in retirement and are set on having a basic guaranteed income through an annuity. In any Pensionfriend's Private Pension Plan offers:

• Investments by professionals with an unbiased, high-return, low-fee approach

• Flexibility to withdraw funds at no cost at any time

• The ability to set key risk and choice parameters (such as maximum loss)

• Easy change of beneficiaries with no capital gains tax for survivors

• The ability to shop around in or at the start of retirement to get the best annuity and then get very advantageous tax rates.