The basic pension castrop-rauxel (also called rurup pension after its inventor) is a new form of private old-age provision created in 2005. As part of the retirement income act, the system of government subsidies for retirement savings was reorganized. The aim of this reform was to focus on promoting only products that can be used exclusively for old-age provision. The tax privileges of capital-forming life insurance policies are largely eliminated. You could also use this for other purposes, such as collateral for loans, capital withdrawal or financing instrument.
Tax incentives (your benefit) and burden
The private basic pension castrop-rauxel is initially structured as a "normal" pension insurance from the calculation of the insurance companies. In the systematics of the retirement income act, it is assigned to retirement provision layer 1. This means that contributions in the accumulation phase are tax-subsidized. The annuities, on the other hand, must be taxed in full in the withdrawal phase. However, there are transitional periods until 2040 for both the amount of tax relief on contributions and the amount of the taxable portion of the pension (see chart below):
Obligation to make contributions and choice of provider
The private basic pension is the only product of the old-age provision layer 1, in which the affiliation and thus the contribution payment is not obligatory. Compulsory contributions are generally made to all other forms of layer 1 such as statutory pensions and provident funds. This means at the same time that you can choose your provider for it. However, you must be active on your own.
Who can make old-age provision via a basic pension?
The basic pension castrop-rauxel is freely accessible. The funding opportunities can therefore take advantage of everyone. There are only different levels of maximum contributions and thus the maximum subsidy, depending on already paid through other forms or notional contributions of the pension layer 1.
How is the promotion of rurup pension tax on contributions?
In your income tax return, you enter the contributions made in the previous year and receive a corresponding credit (see graphic) and thus a reduction in your taxable income.
How is the pension payment taxed??
The taxable portion (income share, see chart) of the basic pension is added to other taxable income and charged at the individual tax rate.
Is the rurup pension basisrente worthwhile??
This question can only be answered individually. For advice and calculations I am at your disposal.
Return of the annuity
You must consider the return on an annuity as a secondary consideration, since the focus is on hedging the longevity risk. All the more so here, since only annuitization is possible. The actual return can only be determined after the death of the policyholder and can be high even with a "bad" contract if the policyholder becomes very old. Conversely, with a grandiose pension insurance, the return can be negative if the policyholder dies prematurely. Nevertheless, it is of course important to choose a good provider with a good concept in order to increase the chance of a good return on investment.
Rurup pension tax?
When asking whether a rurup pension is worthwhile for you, you should consider the entire life cycle and not just look at possible tax benefits during the savings phase. The taxation of later pensions must also be included in the calculation. The ideal case for which a rurup pension is worthwhile for tax purposes is a high taxable income during the savings phase and a low taxable income in the pension phase. For example, a self-employed person with a high income who still has "old" tax-free pension contracts and is therefore unlikely to have much taxable income in the retirement phase would be the ideal constellation.
In cases where it is not so clear, we can use a layer comparison to calculate whether a basic pension is worthwhile and how high the possible benefits are. There we compare over the entire imputed life cycle the possibilities of the three pension stories with each other.
Special features of the rurup pension – basic pension
The subsidy for contributions to the basic pension is already quite respectable today and will continue to increase until 2025. On the other hand, however, there are some restrictions that the legislator has created in order to promote only product forms that serve the purpose of old-age provision, as mentioned in the first section.
You should know these restrictions. In consulting practice, it is often the case that many people prefer to forego the subsidy in favor of greater flexibility and freedom.
-is not capitalizable, it may only be annuitized!
-is not transferable. You cannot transfer the contract to other, z. B. Transfer children!
-is not lendable, so it can not be assigned as collateral for a loan!
-is inheritable only to a limited extent. The circle of possible heirs is the surviving spouse and/or children still receiving child benefits!