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Personal provision for old age

July 20, 2011

Obtain information and expert advice before deciding

When it comes to saving to supplement your pension or investing money so that it will earn interest for later on, so many options are available for every need and every purse that it is very difficult to choose. It is therefore very important to obtain information and expert advice before deciding on any form of personal provision for old age.

The right choice of personal provision for a given person depends on their personal situation and goals. Options for supplementing a pension include private endowment policies and annuity policies, investing in financial products on the capital market, and buying residential property.

Generally speaking, the earlier you start making personal provision for old age, the lower the regular amounts you will need to save. Over a long period, compound interest can turn even a small starting amount into a large sum of capital

If you are closer to pension age when you start saving, you will have to invest more money to supplement your pension. You will also need to choose investment products that offer greater security, because it is hard to make good any losses when investing for a relatively short period.

Regardless of age, you should keep away from shares, investment funds and unit-linked life insurance unless you are prepared to accept the greater risk that goes with higher gain. Private annuity policies, endowment policies, bank saving plans and government bonds, on the other hand, are relatively safe products when providing for old age.


The "Deutsche Rentenversicherung Bund" (German statutory pension insurance scheme) informs about the issues of pension and rehabilitation.