The Rürup Pension, also known as the basic pension, offers an attractive opportunity for the self-employed and freelancers to secure their retirement savings while benefiting from significant tax advantages. This form of pension provision is particularly interesting for those not contributing to the mandatory pension scheme. Below, we will examine how the Rürup Pension works and its tax advantages, along with the target groups it is particularly suitable for.
Rürup Pension: Tax-Favored Provision for the Self-Employed
The Basic Pension, commonly known as the Rürup Pension, represents an attractive option for the self-employed seeking a state-subsidized private pension insurance. This form of provision has been specifically designed for individuals not included in the mandatory pension system, including freelancers and high-income earners.
In the accumulation phase, the Rürup Pension is extremely advantageous. The self-employed can flexibly decide how much to contribute. This freedom in contribution payments allows them to align their retirement provision with their current financial situation. Both regular monthly contributions and variable one-time payments can be made. Particularly attractive is the fact that these contributions can be tax-deductible as extraordinary expenses, significantly reducing taxable income. Starting from 2025, single taxpayers will be able to deduct up to 29,344 euros, while for married couples, the deduction amounts to up to 58,688 euros.
The tax benefits of the Rürup Pension also extend to the taxation of pension payments in old age, albeit in a different manner. The basic pension is subject to what is known as deferred taxation. This means that pension payments during the payout phase are taxable, often at a lower rate than during the working phase. Starting from 2025, initially, 83.5% of the pension will be taxed, with this percentage gradually increasing to 100% by 2058. Even though the taxation increases, many retirees benefit from a lower overall income, thus ultimately reducing their tax burden.
Another advantage of the Rürup Pension is its flexibility regarding succession. If the insured should pass away prematurely, the accumulated capital can be transferred to survivors, thus providing additional security for the family.
Overall, the Rürup Pension allows the self-employed to have a reliable and tax-incentivized retirement provision. Unlike the often uncertain financial future that many self-employed individuals may face, the basic pension offers security in planning and significantly contributes to bridging the retirement gap. These aspects make the Rürup Pension an essential component of a coordinated retirement strategy for those who want to ensure a financially independent future away from state systems.
Advantages for Target Groups of the Rürup Pension: Freelancers in Focus
The Rürup Pension offers flexible retirement provision options, which are particularly attractive to specific professional groups. Among these, first and foremost, is the increasing number of self-employed individuals and freelancers in Germany. This group of people, not integrated into the mandatory pension system, faces the challenge of having to independently provide for their retirement. Here, the Rürup Pension comes into play, allowing for tax-deductible contributions, thus offering an attractive provision structure.
Tax Advantages and Flexibility
For freelancers, the tax aspect of the Rürup Pension is particularly appealing. Contributions are largely tax-deductible, reducing taxable income and thus leading to immediate tax savings. This is a decisive advantage, especially for freelancers with a high income level. Income fluctuations, which frequently occur due to the nature of freelance work, can be flexibly compensated for by adjusting the amount of contributions.
An additional central advantage of the Rürup Pension for freelancers is the payment of a lifelong pension. In later life, this provides reliable financial support, reducing uncertainty about income during retirement. The peculiarity is that pension payments do not only begin at the legal retirement age but can be flexibly adapted to personal plans, offering further security in planning for freelancers.
Protection and Security in Planning
In addition to financial advantages, the Rürup Pension also protects against economic uncertainties. The accumulated capital is exempt from seizures and bankruptcy. This means that even in the event of financial turbulence, access to this reserve cannot be gained, a reassuring aspect in an uncertain financial world. Especially for freelancers, who often work without the protection of mandatory insurance, this represents an important protective mechanism.
In conclusion, it can be stated that the Rürup Pension represents more than just an economical retirement provision for freelancers. It offers reliable financial protection in later years and at the same time protects against potential financial crises during working life. For freelancers who value flexible, secure, and tax-incentivized retirement provisions, the Rürup Pension represents an ideal integration for living comfortably in old age.