When should I stop saving my money?
Pension without money worries: So much money should now be in your account
Spending retirement without worries about money, not having to cut corners - that's probably what most people want. But only very few have calculated how much money they actually need in retirement. A new investigation will show you.
A good book in one hand, a cocktail with an umbrella in the other hand and no longer having to worry - at least not about your finances: Many Germans probably dream of retirement like this or something similar.
But the statutory pension alone will not make the dream come true. You should also save money yourself, wherever possible - and go one step further and invest what you have saved.
Because if you stick to saving, it will be difficult, as an evaluation of the investment platform Weltsparen shows. How much money you would have to have in the account now in order to be able to close the pension gap later can be seen in the next sections.
About the method:
The calculations are based on a career entry of 25 years, a retirement age of 67 years and an average life expectancy of 81 years for men and women. The average time in retirement is around 14 to 15 years with an upward trend. Taxes and inflation were taken into account. In order to be able to compare better, the calculation of the net salary was also based on the assumption that the persons are unmarried, have no children, are assessed in tax class 1, live in an old federal state, are legally insured and pay church tax.
How much money should I have in my account at the age of 30?
If you want to maintain your current standard of living in old age, you would theoretically have to be around today 53,000 euros have on the high edge. The sum is as follows:
30-year-olds earn an average gross of 45,213 euros, net per month after the elimination of the solidarity surcharge 2,368 euros. This results in a statutory pension entitlement of 1,392 euros per month for unmarried people without children. On average, this means that just under 1000 euros per month will be missing to maintain the current standard of living in old age (2,368 euros - 1,392 euros = 976 euros).
In total, with a 15-year pension, that adds up to 181,000 euros, taking into account inflation, i.e. the fact that your money loses value over the years.
Assuming you follow the recommendation of experts to save 10 percent of your net salary every month, then you could still get around 128,000 euros by the time you retire at the age of 67 if you do not receive any interest - 53,000 euros too little (181,000 euros - 128,000 Euros = 53,000 euros). Read in the last section what you can do to get more out of your money instead of just saving it without interest.
* with 15 years of pension
** ten percent of the net salary up to 67 years of age per month
How much money should I have in my account at the age of 40?
In theory, you should have saved significantly more here: 109,000 euros namely. This is how this large number comes about:
40-year-olds in Germany earn an average of EUR 55,627 gross per year, i.e. around EUR 2,791 net a month after the solos are discontinued. You can count on a monthly pension of 1,663 euros. In relation to the current net salary, there is a gap of around 1,120 euros every month (2,791 euros - 1,663 euros = 1,118 euros).
A total of 206,000 euros are missing over a period of 15 years of pension receipt - if you take into account that the money is also worth even less due to inflation.
From now on you can save 10 percent of your net salary every month, but you can only make savings of 97,000 euros if you do not receive any interest on it. You need to own even more to close the gap (206,000 euros - 97,000 euros = 109,000 euros). Read in the last section what you can do to get more out of your money instead of just saving it without interest.
How much money should I have in my account at the age of 50?
A decent chunk: 145,000 euros. These would be necessary in order to be able to maintain your current standard of living in retirement. How do you get that number? So:
50-year-olds in Germany have an average gross income of 58,213 euros per year. Your account receives around 2,892 euros net every month.
Later, they are only entitled to a statutory pension of EUR 1,712 - EUR 1,180 less each month (EUR 2,892 - EUR 1,712 = EUR 1,180). Over 15 years in retirement, this gap would equal a total of 208,000 euros, taking into account that inflation is nibbling on the value of money.
If you set aside 10 percent of your net salary every month, you could save 63,000 euros by the time you retire at the age of 67 if you do not receive any interest - that is, 145,000 euros is too little to compensate for the pension gap. Read in the last section what you can do to get more out of your money instead of just saving it without interest.
How much money should I have in my account at the age of 60?
If you don't do anything with your money other than leave it in your account or savings book, you would ideally need the huge sum of now176,000 euros. Only in this way would you be able to afford just as much in retirement as you currently can by saving. The sum is calculated as follows:
A person aged 60 today has an average gross salary of EUR 58,658 per year, which is EUR 2,911 net per month. If your earnings stay that way until you retire, you can expect a pension of 1,828 euros. That is 1,083 euros less than you currently earn per month (2,911 euros - 1,828 euros = 1,083 euros).
If you draw a pension for 15 years, the gap increases to a total of 204,000 euros - the fact that your money is worth less and less due to inflation is already taken into account.
If you save 10 percent of your net salary every month until you retire, you will have saved EUR 28,000 in the end if you do not receive any interest - EUR 176,000 too little to be able to continue living as before (EUR 204,000 - EUR 28,000 = EUR 176,000 ). Read in the next section what you can do to get more out of your money instead of just saving it without interest.
What can I do if I haven't saved enough money?
The calculations assume that your money is just on one interest-free checking account or Park passbook. So it can't work for you and just keeps depreciating due to inflation. If you do this, you will have to limit yourself in old age - unless you have saved the amounts calculated above, some of which are very high.
It would be better if you invested your savings regularly. So-called Index funds, or ETFs for short ("Exchange Traded Funds"). ETFs are specific Equity funds, i.e. whole baskets of many different stocks with a Computer algorithm replicates a stock index such as the Dax or the MSCI World.
Unlike active investment funds, ETFs do not aim to outperform the market as a whole, but instead to develop in the same way as the index they track.
The big advantage of ETFs: They are significantly cheaper than active funds that are managed by a manager, which means you end up with one higher yield, also called return, can count on. However, the earlier you start, the better.
Because the longer you are invested in ETFs, the more not only does the compound interest effect have an impact, but the sooner you can sit out short-term crises - and thus make up for short-term losses in the long term.
On the other hand, the following also applies: better to invest at all than not at all. Finally, you can continue to run an ETF savings plan beyond retirement age and do not have to be "finished" with it until you are 67 years old. If you only start at the age of 60, you should. ETFs are a long-term investment and should be held for at least 15 years.
We have calculated for different age groups how your savings will increase if you invest them in an ETF savings plan with an average return of 5 percent by the time you retire at the age of 67.
As you can see, it pays to start early. Because if you start at the age of 30, you will not only manage to close the pension gap of 181,000 euros, you will even get an additional 116,000 euros (297,000 euros - 181,000 euros = 116,000 euros).
* if ten percent of the net salary is invested
The calculations are always average values. Your individual situation will probably be slightly different. If you want to know how much money you have to invest each month to reach a certain amount, our savings plan calculator will help you. Click your way through!
more on the subject
- Savings plan calculator,
- Retirement provision,
- Pension and retirement,
- Private pension,
- Financial advisor,
- Church tax,
- Stock index,
- Checking account,
- Savings account,
- Pension insurance,
- Investment funds,
- Equity funds,
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