Many people have special plans for the time when they have left their job responsibilities behind and are entering retirement age.

Build a modern barrier-free home, buy a new car or use the free time for travel to special places – everyone has individual ideas, dreams and wishes for his time after work. However, to meet them, the necessary financial resources must be available. In any case, very few people would like to forego something and at least uphold the current standard of living. However, as a rule, the statutory pension is almost always significantly lower than the financial need at retirement age.

 

Pension gap – how can it be calculated?

Pension gap - how can it be calculated?

The pension gap is the difference that arises when you deduct your actual pensionable income from your financial needs. For most people this is negative and they can not maintain their standard of living.

In order to prevent you having to suffer financial losses in your old age, you should determine in advance how much your personal need for care will be before you reach retirement age. For this, you should always consider the following costs in your invoice:

  • Household money
  • Expenditure on insurance
  • Rental costs
  • Residential utilities
  • Renovation costs for the house or apartment
  • Possible loan installments
  • Personal expenses, such as a new car, travel or hobbies

In order to make a rough estimate of the need for care in advance, experts recommend starting from a guideline value of 90 percent of the last net income.

As part of your pension plan, with Peter Pan you have various options to secure your finances in good time. This will help you close the pension gap, you will not have to sacrifice anything at retirement age, and you will be able to maintain your current standard of living.

 

To calculate the pension gap you will need two values:

  • The sum of your retirement expenses
  • Your income during retirement

Your disposable income includes the statutory pension . Information about the amount of this

 

Pension gap – how can you calculate?

Pension gap - how can you calculate?

Amounts are given by the relevant insurance carriers. You will also receive annual pension information from Deutsche Rentenversicherung, which you can use to calculate the amount of the amount you receive from the statutory pension. However, keep in mind that this information corresponds to a forecast. Amendments to the amount may result from, for example, child-raising periods or unemployment.

If your employer has taken out a company pension plan for you, you can obtain information about the amount directly from him. You can also add this amount to your retirement income.

Further income could be rental income , income from leasing , capital assets or life insurance .

 

Example for calculating the pension gap

A general formula for calculating the pension gap is as follows:

Pension gap = need for care – income

If your last net income was $ 2,000, and you think you’ll need 90 percent of that on retirement, that would be $ 1,800. With a monthly statutory pension of 1,300 euros without other income, according to current value, a pension gap of 500 euros would arise. These would have to cover you by other references, in order to be able to hold your standard approximately and thus close the supply gap.

Various calculators, for example from Stiftung Warentest, offer you the opportunity to easily calculate the supply gap online. You can also include the amount of your current pension level and a possible inflation rate.

 

Close the supply gap – how does it work?

Close the supply gap - how does it work?

The pension gap resulting from the difference provides information on the extent to which you now have to provide additional financial security in order to maintain your usual “standard of living” at retirement age. To close the supply gap, there are several possibilities:

  • Completing additional pension plans that are funded by the state. These include the Riester pension and the Rürup pension.
  • An occupational pension scheme (baV), which your employer concludes for you. If such does not already exist, contact your employer, who is required by law to offer you one.
  • An additional private pension. With one, you pay a monthly contribution during your employment. The pension fund will then grant you a life-long guaranteed pension. Specifically, this means that when you retire, you have the choice between a one-time payment of the accumulated sum or a monthly payment of your pension.

As part of your pension plan, with Peter Pan you have various options to secure your finances in good time. This will help you close the pension gap, you will not have to sacrifice anything at retirement age, and you will be able to maintain your current standard of living.