Why the base pension makes sense for women in particular
The base pension is a private pension scheme with numerous advantages, but also some clear restrictions as framework conditions. It is used exclusively for old-age provision, whereby the contributions paid in after the savings phase are paid out as a lifelong pension until the end of life.
Advantages
- Secure retirement provision
- Lifelong pension payments
- High tax advantages
- Flexible payment options
- Capital is protected against attachment
- Flexible investment options without state requirements
Disadvantages
- No early payout
- No cancellation possible (only contribution deactivation)
- Taxation in old age
- Changing providers can be tricky
In contrast to the Riester pension and occupational pension schemes, the base pension does not require a mandatory capital guarantee. This means that investors have more freedom in choosing their investment strategy as they are not bound by fixed guarantees. In particular, the option of using the base pension as a purely ETF or unit-linked solution makes it attractive for those who want to invest their capital flexibly and with a focus on returns.
The payout from a base pension is then simply higher.
A decisive advantage of the base pension is the 100% deductibility of contributions, which has been possible since 2023 for maximum contributions of up to 27.566 € for single persons or 55.132 € for jointly assessed persons. This tax relief makes the base pension an attractive instrument for tax optimization and for increasing your level of provision in old age.
Another aspect that distinguishes the base pension from other pension models is that it is paid out exclusively as a lifelong annuity. This means that investors receive a predictable and reliable income in old age that is not dependent on market fluctuations or other external factors.
The base pension is an ideal pension module, especially for women, who can benefit from their longer life expectancy. For high earners and the self-employed in particular, the base pension should be one building block (out of a total of three) for retirement provision.
When making a selection, attention should be paid to a lean cost structure, flexibility, and height of payments.
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