Stocks and ETFs for retirement provision - Why more and more Germans are making provisions themselves and are doing it right.

Stocks and ETFs for retirement provision - Why more and more Germans are making provisions themselves and are doing it right.

According to a report from www.t-online.de, there are more and more Germans who are investing in stocks themselves to build up their retirement savings. According to the German Stock Institute, 12.3 million Germans invested in stocks, stock funds and stock ETFs last year. Even if this represents a decrease compared to the previous year, the number remains stable above the twelve million mark. It turns out that investors have internalized that stocks are indispensable for building wealth and planning for retirement.

Stocks, stock funds and ETFs can deliver an average return of six to nine percent per year in the long term. Although there can be terribly bad years on the stock market, there are also sensationally good years that are consistent with the long-term average. The share investment class is seen by more and more Germans as an important building block for retirement planning and long-term wealth creation, which is shown by the increasing number of investors in funds and ETFs.

The draft law, which is intended to strengthen the pension system through investments on the capital market and especially in stocks, was postponed for another year, which was sharply criticized by the German Stock Institute. The number of investors in funds and ETFs (excluding individual stocks) is around 10.3 million and is at the same level as the previous year. Fund and ETF savings form the foundation of stock savings and are particularly popular with younger investors.

The statistics from the BVI fund association show that savings plans in stock funds and ETFs are definitely worthwhile. With an average return of 6.1 percent per year, 12,000 euros invested monthly over ten years could turn into 16,386 euros. After 20 years, 24,000 euros would have become 48,951 euros. These figures show that stocks are a sensational return booster with broad risk diversification via funds and ETFs and a long investment horizon.

It's important to recognize that stocks can play a significant role in retirement planning. Politicians should recognize this and create the necessary framework conditions to make it easier for citizens to access shares as a retirement provision. It is encouraging to see that more and more Germans are already implementing this themselves and are benefiting from the long-term return opportunities. It remains to be hoped that politicians will also recognize this and take appropriate measures to make it easier for citizens to access shares as a retirement provision.