With our glide-path strategy for retirement provision, you secure the long-term return opportunities of the equity markets – and gradually build up a solid financial cushion with an automated ETF portfolio.
Retirement provision is once again a top political issue right now. A draft bill has been tabled for the new retirement savings accounts planned by the federal government. For the early-start pension, one is still to follow. Both are set to launch from 2027.
There is still disagreement over the details. Among other things, the Bundesrat's criticism of the government's plans caused a stir. For instance, the chamber of the federal states called, among other things, for the planned cost cap that is to apply to a so-called standard account to be set lower. So far, the government's draft provides for effective costs of up to 1.5 percent. Following the criticism, the federal government indicated its willingness to review the cost cap once more.
Capping the costs more tightly: Arndt Kussmann considers that highly desirable. “It would not be in the interest of investors if, in this case too, the incentive to save ends up benefiting products that are unnecessarily expensive because of high sales commissions,” emphasises the head of investment communication and analysis at quirion and Quirin Privatbank. “The investment objective has to come first, not some sales interest.”
Reaching the retirement provision goal efficiently
It will still take some time before all the details of the new subsidy are settled. But one thing is clear: it is an important impulse to get more people to use equities for their retirement provision. Because equities can give building wealth a real boost. “Over the long-term average, returns of around 8 percent per year are realistic on the world's equity markets,” Kussmann notes.
Of course, it doesn't just go straight up in a dead straight line. Sometimes returns are above the average, as they have been in recent years. Sometimes below. What's important is: over time, the fluctuations even out.
The question for the investment strategy is now how to make the best possible use of the return opportunities without taking on unnecessary risks. The problem: “No one knows in advance how individual stocks, sectors or countries will develop,” Kussmann points out. The solution: “A global portfolio that is spread as broadly as possible and doesn't rely on speculation.” Like the global ETF portfolio from quirion, which is diversified according to scientific criteria. It gives you a stake in around 8,000 stocks from more than 70 countries.
On the glide path to wealth
In quirion's strategies, bonds are added to the equity portion depending on your personal risk profile. These can cushion the price fluctuations of the equity portion. Here, the risk profile is derived, for each investment goal, from the investment horizon and your personal risk appetite.
In quirion's retirement provision strategy, the time remaining until retirement plays a particularly important role. “We pursue what's known as a glide-path strategy,” Kussmann explains. This means: during the accumulation phase, the return opportunities are initially more in focus. Over time, the share of bonds is increased in order to stabilise your assets step by step in the run-up to retirement.
On the glide path to a financial cushion
That is why the shortest investment horizon is ten years and the lowest equity ratio at the outset is 40 percent. “We want to ensure that the equity markets make a significant contribution to returns even for defensive investors,” Kussmann explains. If retirement is 25 years away or even further off, the money is invested 100 percent in equities at the start across all risk profiles. “But with more defensive portfolios, we then start adding bonds earlier.”
The more time you have, the greater the compound interest
The fact that time plays a special role in the investment strategy for retirement provision is no accident. Compound interest is a lever in building wealth that can, in the end, turn even small savings amounts into a substantial fortune. That is true as a general principle. “But with retirement provision in particular, you should bear in mind: you can't start early enough,” Kussmann underlines.
Provide for the future, made simple
A low-cost, efficient ETF portfolio combined with a smart glide-path strategy: “On their own, investors can hardly put together such a model,” says Kussmann. “And in the marketplace, this concept sets us apart from most other offerings.”
Another distinctive feature: an equity ratio is provided for even after the accumulation phase ends – in almost all risk profiles it stands at 30 percent. The reason is that, thanks to rising life expectancy, retirement lasts longer and longer. “This makes it increasingly important not to forgo the return opportunities of the equity markets entirely during this phase of life.”
Beyond that, quirion's retirement provision strategy offers plenty of flexibility. There is no rigid fixed term. Contributions can be adjusted flexibly. “And savings plans are available from as little as €25 a month,” Kussmann points out. “Retirement provision is becoming ever more important for society. We want to make it as simple and attractive as possible.”
Start saving for retirement now in our automated ETF portfolios.
