Germans in the past have been enamored with so-called “Kapital-Lebensversicherung”, a whole-of-life insurance plan. Even today many do not understand that they have bought into a highly expensive and intransparent form of investment that offers very little actual yield to them. This is one of the reasons why Germans, who are among the biggest savers within the OECD, are the people in the western world with the lowest yields on their savings.

Therefore, talking to your German neighbors or friends about finances will usually not offer you good insights into how you can invest profitably for your future or retirement.

There is little positive to be said about private pension plans in Germany outside of the tax-subsidized ones like Riester, Rürup, or company pension schemes (bAV).

You are usually better off investing directly into savings plans, for instance based on passive investment funds like ETFs.

Or, if you would like to set up a pension plan while working globally mobile, a really good and fair-priced transparently managed offshore pension plan can be a solution.

But, to be perfectly honest with you: we see no real reasons why you should invest into a typical German private pension plan per se.