The Rürup Pension, a financial strategy with the potential of a Swiss Army knife, is an indispensable tool for self-employed professionals and freelancers. It not only provides solid retirement savings but also offers considerable tax advantages. While you invest in your future, you can also reduce your tax burden. This article explores how the Rürup Pension works and who its target groups are, to show you how you can maximize this retirement option.
Benefits of the Base Pension: A Guide for Freelancers and Self-Employed Workers
The Base Pension, known to many as the Rürup Pension, represents an attractive option for private retirement savings for freelancers and self-employed workers. This form of savings, specifically designed for them, not only offers flexibility but also significant tax incentives, which are particularly valuable given the financial and tax needs of a self-employed lifestyle.
During the accumulation phase, policyholders regularly contribute to a pension base contract. The highlight of this phase is the tax deductibility of the contributions paid. These can be declared as extraordinary expenses in the income tax return, thus 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, and starting in 2023, the entire contribution up to this amount can be claimed for tax purposes.
In the payout phase, pension payments from the Base Pension are subject to so-called deferred taxation. This means that the pensions received are taxed at the personal tax rate applicable at that time. A particular advantage is that many retirees benefit from a lower tax rate, thus generally reducing the financial burden in retirement age, even if the taxable portion of pensions will increase to 100% starting from 2058.
The tax advantages offered by the Base Pension are a strong argument for self-employed individuals with high incomes. Thanks to the deductibility of contributions as extraordinary expenses, the current tax rate can be effectively leveraged to reduce financial burden. At the same time, the Rürup Pension offers considerable adaptability, making it particularly suitable for self-employed individuals with variable incomes. This flexibility allows retirement planning to be tailored to individual economic situations.
In summary, the Base Pension provides the advantage of serving as a valid alternative to statutory pensions while also creating tax benefits during the income phase. For freelancers and self-employed workers, who often fall outside the regulations of statutory pensions, this form of savings represents an essential option that offers both flexibility and financial benefits.
The Base Pension: A Customized Retirement Model for Self-Employed Professionals
The Rürup Pension, also known as Base Pension, positions itself as the optimal retirement solution for a specific target group: freelancers and self-employed professionals. This demographic group, not automatically covered by statutory pension schemes, often faces the challenge of having to plan for old age on their own. Here, the Rürup Pension offers a tailored solution.
Flexibility and Protection in One: One of the main advantages of the Base Pension is the flexibility to adjust the contribution amount based on the insured person’s underlying financial situation. This proves particularly beneficial for self-employed individuals who often deal with variable incomes. Periods of economic prosperity allow for higher contributions, while in times of difficulty, payments can be reduced or temporarily suspended. Furthermore, contributions provide solid protection against bankruptcy, being exempt from seizure, which creates a substantial sense of security.
Tax Incentives and Challenges: A strong argument in favor of the Rürup Pension lies in the tax advantages. Contributions can be declared as extraordinary expenses, which can significantly reduce the tax burden. However, high-income earners particularly benefit from these tax advantages, while self-employed individuals with lower incomes may not benefit as much from the tax relief. Therefore, self-employed individuals with lower incomes should carefully consider whether other pension models, such as the Riester Pension, might offer greater advantages.
Conscious Choice for the Long Term: A potential downside of the Rürup Pension is its long-term nature. It requires regular contributions for many years and disciplined planning to fully leverage its potential. This could pose an obstacle for younger freelancers who may not want to commit for extended periods.
In conclusion, the Base Pension remains a compelling option for self-employed professionals, offering customized flexibility and tax benefits. However, it is always recommended to conduct a comprehensive assessment of individual economic situations and long-term goals to determine the best retirement strategy.