The Rürup Pension, a financial strategy with the potential of a Swiss army knife, is an indispensable tool for self-employed workers and freelancers. It not only offers a solid retirement provision but also significant tax advantages. By investing in the future, you can simultaneously reduce your tax burden. This article explores how the Rürup Pension works and its target audience, showing you how to maximize this retirement option.
Advantages of the Basic Pension: A Guide for Self-Employed Workers and Freelancers
The Basic Pension, known to many as the Rürup Pension, represents an attractive option for private retirement provision for self-employed workers and freelancers. This form of retirement provision, specifically designed for them, offers not only flexibility but also considerable tax incentives, which are particularly valuable given the financial and tax needs of a self-employed lifestyle.
In the accumulation phase, insured individuals regularly pay contributions into a Basic Pension contract. The twist of this phase is the tax deductibility of the contributions paid. These can be declared as extraordinary expenses in the tax return, reducing taxable income and significantly lowering 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 amount up to this limit can be used for tax purposes.
In the payout phase, pension payments from the Basic Pension are subject to so-called delayed taxation. This means that the pensions received are taxed at the personal tax rate in effect at that time. A particular advantage is that many retirees can benefit from a lower tax rate, thereby reducing financial burdens in retirement, even if the taxable portion of pensions will rise to 100% from 2058.
The tax advantages provided by the Basic Pension are a strong argument for freelancers with high incomes. Through the deductibility of payments as extraordinary expenses, it is possible to effectively leverage the current tax rate to relieve financial burdens. At the same time, the Rürup Pension offers considerable adaptability, making it particularly suitable for self-employed workers with variable incomes. This flexibility allows for retirement provision planning based on individual economic situations.
In summary, the Basic Pension offers the advantage of serving as a complete substitute for mandatory pension insurance while also providing tax relief in the income phase. For self-employed workers and freelancers, who are generally excluded from the regulations of mandatory pension insurance, this form of provision is an essential option that offers both flexibility and financial advantages.
The Basic Pension: A Tailored Social Security Model for Self-Employed Workers
The Rürup Pension, also known as the Basic Pension, positions itself as the optimal retirement solution for a specific target group: self-employed workers and freelancers. This group of people, who are not automatically covered by mandatory pension insurance, often faces the challenge of self-providing for retirement. Here, the Rürup Pension offers a customized solution.
Flexibility and protection in one: One of the main advantages of the Basic Pension is the flexible adaptation of contribution amounts to the individual financial situation of the insured. This proves particularly advantageous for freelancers who often face variable incomes. Periods of economic prosperity allow for greater contributions, while during more difficult times, contributions can be reduced or temporarily suspended. Moreover, the funds offer solid protection against bankruptcy, being safe from seizures, thus creating a significant 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, significantly reducing the tax burden. However, particularly affluent workers benefit most from these tax advantages, while self-employed individuals with low incomes benefit less from the tax incentives. Therefore, self-employed workers with lower incomes should carefully assess whether other retirement models, such as the Riester Pension, may offer more benefits.
Informed decision for the long term: A potential drawback is the long-term commitment of the Rürup Pension. It requires consistent payments for many years and disciplined planning to leverage its maximum potential. This could pose a difficulty, especially for young freelancers who may not feel ready for a long-term commitment.
In general, the Basic Pension remains a compelling option for self-employed workers, providing tailored flexibility and tax benefits. However, a comprehensive assessment of the individual financial situation and long-term goals is advisable to determine the best retirement strategy.