Retirement planning from 40: what do I need to consider?
If you are addressing your retirement planning for the first time at 40, then – based on the current statutory retirement age – you still have 27 years to actively provide for your pension. The question is therefore: with which strategy can you build up sufficient wealth over this period to maintain your accustomed standard of living in old age?
This is precisely what more and more people in Germany are finding increasingly difficult, as the state pension alone is often no longer enough to live well on in old age. This difference between an individual's financial needs in old age and the state pension actually paid out is also referred to as the pension gap. The goal is therefore to choose a supplementary form of retirement provision that can close this pension gap.
Am I affected by the pension gap?
Would you like to learn more about the pension gap and find out whether you are affected too? We show you how to calculate your individual pension gap and how to close it effectively in our guide: Closing the pension gap: inform yourself, calculate, provide.
How much money should I already have at 40?
As a rule of thumb, by the age of 40 you should have saved up roughly three times your gross annual salary as wealth. Such a financial cushion gives you adequate protection against unforeseen costs in retirement and is intended to help you close your personal pension gap. This magnitude is, admittedly, already very ambitious and not readily attainable for many people. Even smaller amounts of wealth saved privately can already noticeably reduce the pension gap. As a general principle: the older you are, the larger the amount saved should be. And the earlier you start saving, the better.
What can I do for my pension from 40?
Even at 40, you still have a number of options for private retirement provision available to you. However, not every variant is equally profitable. Traditional savings products in particular generate interest returns that are too low to offset inflation and, beyond that, to build up wealth over the long term. An affordable and high-return option is investing with ETFs (Exchange Traded Funds). Retirement provision via an ETF savings plan is especially well suited to building wealth over the long term.
ETF savings plan from 40 – building wealth for retirement
For an ETF savings plan, you first need a securities account. You can open this with a bank or an (online) broker of your choice, for example with quirion. With an ETF savings plan, you pay in an amount of your choosing at regular intervals, usually monthly or quarterly. The amounts paid in are then invested in a broadly diversified ETF portfolio. At quirion, you also benefit from the automatic reallocation to low-volatility asset classes (bond ETFs) as your retirement draws nearer.
Thanks to the regular contributions, even smaller amounts add up quickly, and you benefit from the compound interest effect, which can have an ever greater impact as the value of your securities account rises. Running things via a savings plan makes it possible for even smaller amounts to grow into considerable wealth over the years. In this way, you can build wealth even when you are more financially constrained by additional expenses for children or the repayment of a loan.
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How much money should I invest in retirement provision from 40?
As a general rule of thumb, you should ideally invest roughly 10–20 % of your monthly income in your investments. If someone starts as early as 20, this rate can certainly be lower, since the compound interest effect can work over a particularly long investment period. If you begin your retirement provision with ETFs from 40, a monthly savings rate of 15–20 % is advisable.
How retirement planning with ETFs works
You can find everything about retirement planning with ETFs and what you should watch out for in our guide: How retirement planning with ETFs works.
The best retirement planning from 40: how quirion supports you
With quirion, you rely on a scientifically grounded investment concept that offers you a broadly diversified ETF portfolio with low costs, efficient risk spreading and an automatic reduction of the loss risk towards the end of the saving phase. You can flexibly choose between a lump-sum investment or an ETF savings plan – or combine both to tailor your provision individually. Start now and secure yourself the best chances of a financially relaxed future!
Opening an account with quirion is this easy:
Registrieren
Open an account
Deposit money
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