Private pension insurance

What is it?

Known as “Private Altersvorsorge” in Germany, private pension insurance is a financial instrument that allows individuals to secure a comfortable retirement. 

While Germany does have a public pension system, the benefits from it are often not enough to maintain one’s standard of living after retirement. That’s where private pension insurance steps in.

The market for private pension insurance in Germany is diverse, with numerous financial institutions offering a variety of plans. Next to plans such as”Riester-Rente” and “Rürup-Rente,” there are the fully private pension insurances that have no governmental involvement at all.

What are the benefits?

Unlike the state pension system, private pension insurance allows for a more customized retirement plan. This means you can decide how much you contribute each month, what kind of investments you’re comfortable with, and when you’d like to start receiving payouts. Some plans even offer flexibility in contribution and the option for a one-time lump sum payout.

At the end of the day, these plans work as follows: you put money into a plan and the money gets invested as you choose. The big advantages are that these plans are very flexible, both during paying into the plan but also receiving your money, and that you are completely free in choosing how your money gets invested.

The competition among insurance providers is intense, which means you have the benefit of shopping around for a plan that suits your financial goals and retirement vision best.

Who is it for?

Private pension insurance is ideal for anyone looking to supplement their state pension in Germany, especially those who feel the state provision will not suffice. Factors such as your age, income, and whether or not you’re self-employed can all influence which plan is best for you.

For instance, younger individuals may find a more aggressive investment strategy beneficial, while those nearing retirement might opt for safer, less volatile options. As is the key with investment in general, you need to have a clear strategy and know what you want, then these plans can be exactly what you are looking for.

Did you know?


The average monthly payment received from the state pension in Germany in 2023, often considered insufficient for maintaining a comfortable standard of living post-retirement. [1]