Rürup pension: useful product or waste of money?

Rürup pension: useful product or waste of money?

The basic or Rürup pension is often presented as a controversial product. However, the general opinion that it is a bad financial instrument is not completely correct. It is important to consider all possible cases to understand when the basic or Rürup pension may make sense. A major advantage is the tax deferral, as the contributions are tax deductible and only later payments and income have to be taxed.

Despite these tax advantages, there are serious disadvantages that must be taken into account when making the decision. These include the lack of flexibility, as the basic or Rürup pension is usually non-cancelable. Likewise, there is often no opportunity to freely dispose of the accumulated assets, as they usually have to be paid out as a monthly pension until the end of life. These restrictions could cause problems for some investors. However, under certain conditions the basic or Rürup pension can still make sense.

It is therefore crucial to carefully examine individual needs and goals when deciding for or against a basic or Rürup pension. Both the tax benefits and long-term limitations should be carefully considered to make an informed decision. Despite possible disadvantages, the basic or Rürup pension can be a useful addition to retirement provision in certain cases. It is therefore advisable to seek professional advice when choosing the right financial product.