Wouldn’t that be nice? Secure your own financial future and do something for the environment at the same time. We’ll show you how. To do this, it is advisable to take a brief look at the topic of old-age provision. Because the way you invest your money for retirement should suit you and your life. How does our pension system actually work? What is important when choosing the right financial plan? And what kind of sensible investment will make you more relaxed about growing old on our blue planet?
Step 1: Pension — How does it work?
Pensions in Germany can be divided into three areas:
- Statutory pension insurance
- Occupational pension provision
- Private pension provision
Think of it like a pyramid. The basis is the statutory pension insurance. It is compulsory for every employee to pay part of their salary into it. Certain professions (e.g. doctors or lawyers) pay into professional pension schemes, for freelancers there is the option of a private basic pension (e.g. Rürup) and for civil servants there is the civil service pension scheme. The money collected is in turn paid out to people who can no longer work due to old age or other reasons. So one generation provides for the next.
If this is not enough — and unfortunately this is increasingly the case — the other two areas supplement the basis of the statutory pension provision. Occupational pension provision is a supplementary pension (e.g. Riester) which your employer can help you with and which the state supports through tax benefits. On top of that, you can think about ways to invest your money. Private alternatives for old-age provision are, for example, life insurance, pension insurance, equity funds or real estate.
Due to demographic change, fewer and fewer people are paying into the statutory pension scheme, while more and more people are receiving pensions. This makes the base smaller. The aforementioned pyramid is turning around, so to speak, and increasingly calling on you to invest in your old-age provision. But where to start?
Step 2: Investing money — What suits you?
Which investment is worthwhile for you in order to have enough money in old age depends entirely on you and your life circumstances and your plans for the future. Do you dream of a permanent job, a family, three children, a house with a garden and a golden retriever, or of touring the globe with your start-up idea? In other words, do you value security or flexibility? How secure will your job be in 20 years? How much equity can you raise? How liquid do you want to be with rising or falling rates?
Long-term, prefabricated products that a bank employee puts on your desk are no longer an option for most younger clients. Material investments, such as buying a house, are also difficult for young professionals. A balanced option, on the other hand, is offered by so-called ETFs (Exchange Trade Funds). These are share packages in the form of savings plans that, when invested broadly, can sometimes yield higher returns despite low costs.
If you want to earn more money than with life insurance, your own home or securities, you could also try investing on the internet: Cryptocurrencies, NFTs and the like, but be aware of the risks and the high fluctuations.
And since this is a young, for many still unknown market, you should pay attention to transparency.
Transparency? Flexibility? Yield? This brings us to an idea that combines all these needs and offers you exciting projects in sustainability and renewable energy. Welcome to Step 3: Wattify!
Step 3: Your Wattify investment as a retirement plan
With Wattify, you can invest in sustainable impact projects and earn a return on your investment. But not only that. By realising renewable energies with your investment, you are also driving forward the energy transition. And as we know, this is also an essential part of the fight against climate change. Your investment is therefore not only a financial retirement provision, but also an existential one.
In your Wattify app you will find different projects with different terms: short‑, medium- and long-term. When it comes to retirement planning, you can focus on those projects that are long-term. We are sure that you will find the project that fits your plans for the future.