The Rürup Pension, a financial strategy with the potential of a Swiss army knife, is an indispensable tool for freelancers and self-employed individuals. Not only does it offer solid retirement savings, but it also provides significant tax advantages. While you invest in your future, you can simultaneously reduce your tax burden. This article explains how the Rürup Pension works and its target audience to show you how to get the most out of this retirement option.
Advantages of the Rürup Pension: A Guide for Self-Employed Workers and Freelancers
The Rürup Pension, known to many as basic pension, represents an attractive option for the personal retirement planning of self-employed individuals and freelancers. This form of savings, specifically designed for them, not only offers flexibility but also substantial tax incentives that are particularly valuable given the financial and taxation requirements of a self-employed lifestyle.
In the accumulation phase, policyholders regularly pay contributions into a basic pension contract. The key to this phase is the tax deductibility of the contributions made. These can be reported as extraordinary expenses on the income tax return, lowering taxable income and significantly reducing the tax burden. For the year 2025, up to 29,344 euros for singles can be deducted as extraordinary expenses, with the possibility that from 2023 the entire contribution up to this amount can also be declared tax-valid.
In the disbursement phase, pension payments from the Rürup Pension are subject to so-called deferred taxation. This means that the pensions received are taxed at the personal income tax rate applicable at that time. A particular advantage is that many retirees benefit from a lower tax rate, resulting in a generally reduced financial burden in retirement, even though the taxable portion of pensions will rise to 100% starting in 2058.
The tax advantages that the Rürup Pension offers are a compelling reason for high-income self-employed individuals. Thanks to the deductibility of contributions as extraordinary expenses, it is possible to effectively leverage the current tax rate to reduce the financial burden. At the same time, the Rürup Pension offers considerable adaptability, making it particularly suitable for self-employed individuals with fluctuating incomes. This flexibility allows for structuring retirement savings according to individual economic situations.
In summary, the Rürup Pension presents the advantage of serving both as a valid substitute for mandatory pension insurance and of generating tax incentives during the income phase. For self-employed individuals and freelancers, who are often excluded from mandatory pension regulations, this form of savings represents an essential option that provides both flexibility and financial benefits.
The Rürup Pension: A Customized Retirement Model for the Self-Employed
The Rürup Pension, also known as basic pension, positions itself as the optimal retirement solution for a specific target: self-employed individuals and freelancers. This demographic group, not automatically covered by the mandatory pension system, often faces the challenge of independently planning their retirement. Here, the Rürup Pension offers a tailored solution.
Flexibility and protection in one: One of the main advantages of the Rürup Pension is the adaptable contribution amount according to the individual financial situation of the policyholder. This proves particularly beneficial for the self-employed who often face variable incomes. Periods of economic prosperity allow for higher contributions, while in tough times, payments can be reduced or suspended. Additionally, the contributions enjoy solid insolvency protection, being safe from garnishment, creating a crucial sense of security.
Tax incentives and challenges: A strong argument in favor of the Rürup Pension lies in its tax benefits. Contributions can be declared as extraordinary expenses, leading to a significant reduction in the tax burden. However, wealthier self-employed individuals gain the most from these tax benefits, while those with lower incomes benefit to a lesser extent. Consequently, self-employed individuals with lower earnings should carefully assess whether other retirement models, such as the Riester Pension, might offer greater advantages.
Conscious choice for the long term: A potential disadvantage of the Rürup Pension is its need for a long-term commitment. It requires consistent contributions over many years and disciplined planning to fully utilize its potential. This may pose a barrier, particularly for young self-employed individuals who may not want to commit for extended periods.
Overall, the Rürup Pension remains a compelling option for the self-employed, offering tailored flexibility and tax benefits. A comprehensive assessment of the individual economic situation and long-term goals is always advisable to determine the best retirement strategy.