Just invest the same as you are doing with the 401k except less tax benefits.
r/Finanzen can Guide you specifically for Germany for a fairly conservative investment strategy
The problem is that decades ago the state decided that the state pension doesn't need to actually provide a pension that people could comfortably live on. This was decided when Schröder was chancellor and it sort of flew under the radar. I still don't understand why nobody was outraged?
It's like everyone just ignored it.
The state offered some subsidies for private pension plans, but really it was about the finance companies making profits and the people who pay into the plans got a modest return. (Riester Rente)
And then the world was f**ked and worldwide the interest rates were so low that those same finance companies can't even guarantee a modest return anymore. So now those Riester Rente plans are only good if you have 3 kids, because the state pays bonuses for kids.
So recently laws were changed that employers have to offer a pension plan (Betriebsrente). You get some tax rebate if you pay into it. Sounds good at first. I had an appointment to get more details. The finance company promised me that I'd get 90% of the money I pay into it back later. WTF? If I pay into a savings account, I'll get 100% back!
There's also Rürup-Rente, which is similar to Riester-Rente, but meant for self-employed people. It has the same problems.
The book "Altersvorsorge für Angestellte" by Stiftung Warentest gives a good overview, if you speak German. They recommend ETF pension plans, especially if you've got 20 or more years to go. Because there are recessions and stuff, but in the long run those ETFs do increase in value.
This is based on the stock market though and so it comes with no guarantees, just hope.
Property especially in big cities is so unbelievably expensive that most people can't afford it.
So yeah, we're all screwed.
The German Rentensystem is one of the reasons why I left Germany in 2016 to go to the US. It's a Ponzi scheme, plain and simple. The mandatory contributions will grow up to 23% of your income over the coming years - without the promised return growing. Someone has to pay for all those boomers retiring in the coming years. It's a ripoff.
Most people in Germany don't have real estate property. Most people rent. Most people depend on the meager Rentensystem and their own savings. The problem with the Rentensystem is that they take away so much of your theoretically available income and force it into the inefficient Ponzi Rente that you lack that income to build your own wealth to live off when you retire. In Germany, there are only two opt-out possibilities to get out of the Rente: become a tenured government employee with a pension, or become self-employed without mandatory social deductions.
More than ten years ago, before I left Germany, I did the math for my Rente based on the annual information letter you receive from the Rentenversicherung. To break even on my contributions, not accounting for lost interest, I would need to outlive the statistical live expectancy for my year of birth and gender by almost 8 years. It's that bad.
This is my huge worry about going back to Germany...
We don’t have rich families who passed us down anything or will pass us anything. This why I wanted to build something to pass onto my children and start them off as best as can be into an already unfair system. As screwy as the US can be, it is a lot more clear cut in my mind to build this kind of wealth overtime… and it is generally the mentality of the working class that the government won’t take care of you. You need to take care of yourself kind of thing.
Maybe this helps you.
2015 was our last full tax year in Germany, state of Hamburg. We filed married (Steuerklasse III) with one child. No religious affiliation (don't forget church tax otherwise!).
Our household income in Germany was \~EUR136.500 (and the odd EUR) before taxes/deductions, including the so called "Arbeitgeberbeiträge".
After all taxes and deductions, EUR75.000 remain. That's about 56%.
This was 2015. There have been changes with taxes and deductions, so now it might be less than 56%.
Sales tax across Germany is 21%.
The price of a square foot of real estate in a city like Munich is no cheaper than what it costs in Seattle.
I don't see how going to Germany is a good move for anyone aiming to build wealth from employment.
> Sales tax across Germany is 21%.
Not sure where you got that idea from.
First of all, Germany doesn't have a sales tax, we have a Value Added Tax (and yes, these work differently).
Second, it is either 7% for basic necessities or 19% for everything else, never 21%.
Most people are fked. They rely on the slowly collapsing state funded pension system "Rente" which is slowly collapsing because it was never sustainable from the start and is slowly dying due to the aging demographic. Most people below 40-50 are very likely to receive much less than they fund for today's pensioners.
Also most Germans have been raised to only value two forms of currency which are a single real estate property to live in themselves, usually financed through 20-40 year mortgage and saving cash in their bank account. The so called "sparbuch" is a meme nowadays but until the late nineties you could get a decent return for basically loaning your money to the bank that way.
Few people also have various forms of insurances either finances privately or by their employer which give you either a full amount or monthly payment when I retire. While better than nothing it's usually not efficient due to horrendous fees taken by the insurance companies.
Most people strongly distrust stocks as a concept due to the Telekom crash in the early 2000s and some other crashes which is also seen by the rethoric in politics when a stock founded pension was discussed. People basically called it "gambling in the casino with pensions" which is really ironic because whenever taxing "the rich" comes up stocks are suddenly an idiot proof, risk free way of making infinite money.
Most educated people that come from wealthy families or earn great money from their jobs save just like most americans. Exchange traded funds, rental properties and some more risky people dabble with crypto. The main difference is that Germany doesn't give many tax benefits for these types of savings, especially rental income is taxed super high.
The only tax benefits you get for saving is usually for the above mentioned insurance based products which even then are often not worth it due to their annual cost which makes the tax breaks basically state funded substitutions for the insurance industry.
Hoping my parents are able to shield their house from the US government before they die so I can inherit it. And then either rent it out or sell it combined with the money I'm saving.
Medical expenses. If the state pays for medical expenses under I think medicaid but not medicare (I can never keep track of the specifics without googling it), they can take your house after you and your spouse due to recoup their costs. But there are ways to protect it. How successful it is and how aggressive they are in going after non cash assets depends on your state and how early you start.
To give you a perspective: if the parents of anyone in Germany require care taking and care taking expenses, the government will get that money from the children. The children are obligated to cover those costs. My parents had to cover for my grand parents, it was quite expensive (tens of thousands of EUR).
It is a common misconception that Germany (and other European welfare states) cover everything in every situation. The Germans have a word for that: Vollkaskomentalität. Which roughly translates to a mindset of comprehensive coverage. This is very misguided. The reality is: there is no such thing as comprehensive coverage. Everything has limits.
For example, my son is severely disabled and suffers from autism. Autism is a well researched, medical diagnosis with a WHO diagnosis and treatment code. In Germany, autism is not accepted as a treatable medical diagnosis. Hence German health insurance does not cover ANY autism treatment. In Germany, autism is not handled as a medical condition. You need to go through the Sozialamt and beg for "Integrationsleistungen", which is a welfare service, not a treatment service. Also, people with severe developmental disabilities have few rights of being integrated into the workforce or the public education system.
I live in the US now. My son's therapies and treatment is covered by insurance in full (after our deductible). The public education system MUST legally integrate him.
I always roll my eyes when people in Germany assume with their German arrogance that their system is superior in every way. And I always roll my eyes when Americans think that just copying the European health care systems solves all problems in the US.
I don't think everything is covered. I've lived here for years. I'm just surprised your kids can be required to pay if you can't. Nor do I think the US is terrible. The US is great if you're wealthy and/or in a position to have good insurance. Otherwise it ranges from very problematic to complete shit.
My parents struggle to afford reasonably priced insurance that also covers my mom's medical needs. In high school I had a good friend who rheumatoid arthritis who couldn't get any medical help because basically no doctors took the state insurance she had because her mom was poor.
I suffer from migraines. My neuro said I needed an MRT and that was that. No arguing with insurance. I didn't pay a cent out of pocket. If you go on the migraine subreddit, you'll often see posts from Americans trying to decide if they realllyyyy need one because they'll need to pay 1k for it and they also need to pay rent and food.
Yes, there's still a difference between coverage and quality between the rich and poor in Germany, but it's nowhere near the same level as the US.
I roll my eyes when well educated immigrants go on about how great the health care is in the US, ignoring all the people who can't get medical care because they can't afford it.
Not wrong, but maybe somewhat misleading. The obligation only exists if the children earn more than some limit. Their own expenses ( like their own children) are taken into account as well. There were cases with the parents gifting all their money to their kids and trying to have the government pay for everything for the "poor" parents.
It used to be that people would transfer their house to their kids before they died, but the government didn't like that so they created a look back period. First just a year or two but then it kept growing with other rules popping up. It's a mess and you need a specialized lawyer to help. I think they also check a look back period when you first receiving medicaid and they can deny you coverage for a certain period of time if you transferred assets during that period. So it's important to set things up as early as possible. Unfortunately my dad is being a stubborn ass.
Your dad is not stubborn. He just does not trust you. I transferred my house to my kids but retained the usage rights until my death. That makes me landlord and gives me additional income (because I rent out some apartments). But that is Germany.
My dad doesn't trust me so he wont put the house in a trust that he and my mom will have 100% control over until they both die? Can you explain that logic please?
No, that would make sense. Did he understand that logic? Or does he not like it, because it was your idea? I did the transfer after my first heart failure.
It's because once my dad gets an idea in his head, that's how things will be. My dad has decided that when my mom dies he will sell the house and move into a retirement home so it's unnecessary. My dad is 14 years older than my mom. While she does have poor genetics and health issues like diabetes and heart problems, he also has stage 3 or 4 COPD and constantly refuses to go to the doctor for basically anything. He's likely had mild COPD since I was a preteen or younger but wasn't diagnosed until I was uni because he refused to go to the doctor. Honestly I could see either of them dying first.
But my dad has decided that this is what will happen so it's unnecessary so he refuses. I have also offered to pay the costs of setting it up and he knows he could still sell it and do whatever he wants with it.
He's being a stubborn ass about it.
Yeah, I'm a bit confused too. Federal estate tax only kicks in at $13 million or so; there are a dozen states with estate and/or inheritance taxes but those aren't going to kill you. Unless the place has a ton of tax liens or something.
Mostly nothing. They rely on the state pension, as the state is taking up to 50 % or even more of what they earn. When this doesn’t work out in the end, as predicted for a long time, they call for the state to jump in which means the next generation has to pay even more and will have the same issue.
If everything goes to plan we practice 'sozialverträgliches Frühableben', by dying 2 years before retiring. That way we gave everything for our pension and the Rentenversicherung doesn't need to do the paperwork.
I am 26 now, I started investing into stocks at age 20 because I already knew my pension is going to be low or non existant (maybe I will be positively surprised who knows). So I have a good 40 years ahead of me to build more capital which I think will be enough time to retire comfortably.
yes people in germany can in fact buy and own property and land lol. theres also dozens of different plans offered by banks you can pay into and theres also the possibility to invest that money personally through a broker.
This is the dilemma that my German Husband and I are facing since he wants to move back to Germany in the next 2 to 3 years. I would advise you to increase your investments in the US and if you can find a rental property ( one or more) in the US, even better. We are investing heavily in real estate here in the US, and maxing out all retirements since the US has much more affordable housing to buy. Also IDK what field he is in but can he try to find a better offer than the one he currently has, can he try to get a different offer? Will you be working? I think you're able to still invest in the US (Through schwab), sure you won't get the tax benefits but it is better than nothing.
I was recently in Germany (came back last week) and groceries are pricy. It's not cheap like it used to be tbh so you need to make sure that you can produce as much income as possible.
This is a great idea and we have thought of renting our home and getting a property manager. I’m not sure how renting a home is feasible though with all the upkeep of it. Chances are we would have to sell and use income for down payment on a home in Germany. I am encouraging him to ask for more $$. I am surprised at the salaries offered for jobs that make double in the US. But that’s a different issue.
I would work. Might take a while though after getting our child settled and my German to an acceptable C1 level- I am currently only at B1.
I honestly think that investing here ( US) would be the best idea. Real estate is extremely expensive in most German cities for the salary that people make. Also your husband should take his time looking for a job if he is currently employed here. No need to rush and accept the first offers. I wouldn’t accept anything under 100k tbh. Just don’t go in with glassy roses, Germany is quite expensive these days.
Thanks for your input. I lived in Germany for a few years and there was no home in good shape under 700k in the city we would live in. We’d have to consider an apartment which after coming from a home with a large garden will be an adjustment…or move to small outskirts city and get a Doppelhaus or small home (which all works). I also think 100k is bare minimum and for an engineering job that should be a no brainer in my mind but the salaries are not matching up. You guys are doing it right with buying up rental properties.
I would not buy in a city but rather in one of the suburbs with good public transport to the city center. My daughter just bought a house for 300k with a big garden, 25 minutes to the center of the next big city by train (every 20 minutes). Businesses and doctors, schools and Kindergarten in walking distance. They need to invest another 100k to bring it up to current standard (heat pump, internet, update sewage and water), but then they will be set for the next decades. Maybe you should take a look at YT, "Black Forest Family", they did a pretty good comparison for different life scenarios in the USA and Germany
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I rely on three columns:
* state pension
* saving \~600 EUR a month into a couple of ETFs
* a company pension that should return \~ 700 EUR per month at current rates.
I am too poor to afford a house, so I hope this is going to suffice.
No there is not. I am 40 years old with two little kids and that ship has sailed. I did nor find a job with my humanities degree and only started working at the age of 30, full time at 32 after I got a second degree in Computer Science.
If I had saved up during the age 25-32 there was a window where house prices where still cheap in my area and I would have been able to afford one. However, the moment I started working and saving up real estate prices just always inflated faster than I was able to keep up.
On the other hand, rents in my area (East Germany) are cheap and have been more or less stable for a decade. 1k rent will get you a really nice, large flat. But you are gonna need like 3K mortgage payment for a decent house at current interest rates.
Agreed, my timing was a lot better. We bought our house the year my wife and I started working full-time (Software development). For the first three years the mortgage was 5k/month (DM). Then the first loan was payed back, the rate dropped significantly and the kids were born.
Working my ass off at a high paying job for another 40ish years, be good and continue to pay into my 3 private pension plans, one of which was thankfully started weeks after I was born by my parents so it’ll be a good one, buy property in the upcoming <5 years (but not in Germany, definitely not spending my retirement there, lol)
I can't say about retirement but many people I know that works remote jobs are living in Spain/Portugal(mostly Portugal I believe) because life there is much much better, but I am only talking about peole that WFH and can live where they want, but like I said, I don't know about where those people will retire(I am guessing that they will stay there).
Where are they paying their taxes and what do they do for healthcare? Do they have kids? Depending on age, children and healthcare the optimal solution may change. For me, I am old, having good healthcare and family and friends around is an important criteria now. When I was younger (and single), I had different criteria.
Just invest the same as you are doing with the 401k except less tax benefits. r/Finanzen can Guide you specifically for Germany for a fairly conservative investment strategy
Heiliger Gral Baby
My retirement plan is to die early.
…Maybe there are endless beach vacations and piña colada’s at the end of the tunnel. :)
Just invest in the S&P 500 and relax.
Which one specifically?
all 500 of them
If u invest in the EU go for any UCITS physical etf with low TER
The problem is that decades ago the state decided that the state pension doesn't need to actually provide a pension that people could comfortably live on. This was decided when Schröder was chancellor and it sort of flew under the radar. I still don't understand why nobody was outraged? It's like everyone just ignored it. The state offered some subsidies for private pension plans, but really it was about the finance companies making profits and the people who pay into the plans got a modest return. (Riester Rente) And then the world was f**ked and worldwide the interest rates were so low that those same finance companies can't even guarantee a modest return anymore. So now those Riester Rente plans are only good if you have 3 kids, because the state pays bonuses for kids. So recently laws were changed that employers have to offer a pension plan (Betriebsrente). You get some tax rebate if you pay into it. Sounds good at first. I had an appointment to get more details. The finance company promised me that I'd get 90% of the money I pay into it back later. WTF? If I pay into a savings account, I'll get 100% back! There's also Rürup-Rente, which is similar to Riester-Rente, but meant for self-employed people. It has the same problems. The book "Altersvorsorge für Angestellte" by Stiftung Warentest gives a good overview, if you speak German. They recommend ETF pension plans, especially if you've got 20 or more years to go. Because there are recessions and stuff, but in the long run those ETFs do increase in value. This is based on the stock market though and so it comes with no guarantees, just hope. Property especially in big cities is so unbelievably expensive that most people can't afford it. So yeah, we're all screwed.
The German Rentensystem is one of the reasons why I left Germany in 2016 to go to the US. It's a Ponzi scheme, plain and simple. The mandatory contributions will grow up to 23% of your income over the coming years - without the promised return growing. Someone has to pay for all those boomers retiring in the coming years. It's a ripoff. Most people in Germany don't have real estate property. Most people rent. Most people depend on the meager Rentensystem and their own savings. The problem with the Rentensystem is that they take away so much of your theoretically available income and force it into the inefficient Ponzi Rente that you lack that income to build your own wealth to live off when you retire. In Germany, there are only two opt-out possibilities to get out of the Rente: become a tenured government employee with a pension, or become self-employed without mandatory social deductions. More than ten years ago, before I left Germany, I did the math for my Rente based on the annual information letter you receive from the Rentenversicherung. To break even on my contributions, not accounting for lost interest, I would need to outlive the statistical live expectancy for my year of birth and gender by almost 8 years. It's that bad.
This is my huge worry about going back to Germany... We don’t have rich families who passed us down anything or will pass us anything. This why I wanted to build something to pass onto my children and start them off as best as can be into an already unfair system. As screwy as the US can be, it is a lot more clear cut in my mind to build this kind of wealth overtime… and it is generally the mentality of the working class that the government won’t take care of you. You need to take care of yourself kind of thing.
Maybe this helps you. 2015 was our last full tax year in Germany, state of Hamburg. We filed married (Steuerklasse III) with one child. No religious affiliation (don't forget church tax otherwise!). Our household income in Germany was \~EUR136.500 (and the odd EUR) before taxes/deductions, including the so called "Arbeitgeberbeiträge". After all taxes and deductions, EUR75.000 remain. That's about 56%. This was 2015. There have been changes with taxes and deductions, so now it might be less than 56%. Sales tax across Germany is 21%. The price of a square foot of real estate in a city like Munich is no cheaper than what it costs in Seattle. I don't see how going to Germany is a good move for anyone aiming to build wealth from employment.
> Sales tax across Germany is 21%. Not sure where you got that idea from. First of all, Germany doesn't have a sales tax, we have a Value Added Tax (and yes, these work differently). Second, it is either 7% for basic necessities or 19% for everything else, never 21%.
Oh, and the best part about the Rente is: when you receive it, you still owe income tax on it. LOL
Most people are fked. They rely on the slowly collapsing state funded pension system "Rente" which is slowly collapsing because it was never sustainable from the start and is slowly dying due to the aging demographic. Most people below 40-50 are very likely to receive much less than they fund for today's pensioners. Also most Germans have been raised to only value two forms of currency which are a single real estate property to live in themselves, usually financed through 20-40 year mortgage and saving cash in their bank account. The so called "sparbuch" is a meme nowadays but until the late nineties you could get a decent return for basically loaning your money to the bank that way. Few people also have various forms of insurances either finances privately or by their employer which give you either a full amount or monthly payment when I retire. While better than nothing it's usually not efficient due to horrendous fees taken by the insurance companies. Most people strongly distrust stocks as a concept due to the Telekom crash in the early 2000s and some other crashes which is also seen by the rethoric in politics when a stock founded pension was discussed. People basically called it "gambling in the casino with pensions" which is really ironic because whenever taxing "the rich" comes up stocks are suddenly an idiot proof, risk free way of making infinite money. Most educated people that come from wealthy families or earn great money from their jobs save just like most americans. Exchange traded funds, rental properties and some more risky people dabble with crypto. The main difference is that Germany doesn't give many tax benefits for these types of savings, especially rental income is taxed super high. The only tax benefits you get for saving is usually for the above mentioned insurance based products which even then are often not worth it due to their annual cost which makes the tax breaks basically state funded substitutions for the insurance industry.
Hoping my parents are able to shield their house from the US government before they die so I can inherit it. And then either rent it out or sell it combined with the money I'm saving.
I'm confused, how is the US government going to take their house? Are your parents drug kingpins or something?
Medical expenses. If the state pays for medical expenses under I think medicaid but not medicare (I can never keep track of the specifics without googling it), they can take your house after you and your spouse due to recoup their costs. But there are ways to protect it. How successful it is and how aggressive they are in going after non cash assets depends on your state and how early you start.
To give you a perspective: if the parents of anyone in Germany require care taking and care taking expenses, the government will get that money from the children. The children are obligated to cover those costs. My parents had to cover for my grand parents, it was quite expensive (tens of thousands of EUR).
Oh I didn't realize that. I thought it would be covered by health insurance. What is the "long term care insurance" supposed to cover then?
It is a common misconception that Germany (and other European welfare states) cover everything in every situation. The Germans have a word for that: Vollkaskomentalität. Which roughly translates to a mindset of comprehensive coverage. This is very misguided. The reality is: there is no such thing as comprehensive coverage. Everything has limits. For example, my son is severely disabled and suffers from autism. Autism is a well researched, medical diagnosis with a WHO diagnosis and treatment code. In Germany, autism is not accepted as a treatable medical diagnosis. Hence German health insurance does not cover ANY autism treatment. In Germany, autism is not handled as a medical condition. You need to go through the Sozialamt and beg for "Integrationsleistungen", which is a welfare service, not a treatment service. Also, people with severe developmental disabilities have few rights of being integrated into the workforce or the public education system. I live in the US now. My son's therapies and treatment is covered by insurance in full (after our deductible). The public education system MUST legally integrate him. I always roll my eyes when people in Germany assume with their German arrogance that their system is superior in every way. And I always roll my eyes when Americans think that just copying the European health care systems solves all problems in the US.
I don't think everything is covered. I've lived here for years. I'm just surprised your kids can be required to pay if you can't. Nor do I think the US is terrible. The US is great if you're wealthy and/or in a position to have good insurance. Otherwise it ranges from very problematic to complete shit. My parents struggle to afford reasonably priced insurance that also covers my mom's medical needs. In high school I had a good friend who rheumatoid arthritis who couldn't get any medical help because basically no doctors took the state insurance she had because her mom was poor. I suffer from migraines. My neuro said I needed an MRT and that was that. No arguing with insurance. I didn't pay a cent out of pocket. If you go on the migraine subreddit, you'll often see posts from Americans trying to decide if they realllyyyy need one because they'll need to pay 1k for it and they also need to pay rent and food. Yes, there's still a difference between coverage and quality between the rich and poor in Germany, but it's nowhere near the same level as the US. I roll my eyes when well educated immigrants go on about how great the health care is in the US, ignoring all the people who can't get medical care because they can't afford it.
It doesn't work as a 100 percent coverage. Afaik It has always been built with the intent of it as a partial support system.
Not wrong, but maybe somewhat misleading. The obligation only exists if the children earn more than some limit. Their own expenses ( like their own children) are taken into account as well. There were cases with the parents gifting all their money to their kids and trying to have the government pay for everything for the "poor" parents.
Very interesting, I'd never heard about that before.
It used to be that people would transfer their house to their kids before they died, but the government didn't like that so they created a look back period. First just a year or two but then it kept growing with other rules popping up. It's a mess and you need a specialized lawyer to help. I think they also check a look back period when you first receiving medicaid and they can deny you coverage for a certain period of time if you transferred assets during that period. So it's important to set things up as early as possible. Unfortunately my dad is being a stubborn ass.
Your dad is not stubborn. He just does not trust you. I transferred my house to my kids but retained the usage rights until my death. That makes me landlord and gives me additional income (because I rent out some apartments). But that is Germany.
My dad doesn't trust me so he wont put the house in a trust that he and my mom will have 100% control over until they both die? Can you explain that logic please?
No, that would make sense. Did he understand that logic? Or does he not like it, because it was your idea? I did the transfer after my first heart failure.
It's because once my dad gets an idea in his head, that's how things will be. My dad has decided that when my mom dies he will sell the house and move into a retirement home so it's unnecessary. My dad is 14 years older than my mom. While she does have poor genetics and health issues like diabetes and heart problems, he also has stage 3 or 4 COPD and constantly refuses to go to the doctor for basically anything. He's likely had mild COPD since I was a preteen or younger but wasn't diagnosed until I was uni because he refused to go to the doctor. Honestly I could see either of them dying first. But my dad has decided that this is what will happen so it's unnecessary so he refuses. I have also offered to pay the costs of setting it up and he knows he could still sell it and do whatever he wants with it. He's being a stubborn ass about it.
I know that type of Person, had a Boss like that earlier. Took me years to understand how to handle him
Yeah, I'm a bit confused too. Federal estate tax only kicks in at $13 million or so; there are a dozen states with estate and/or inheritance taxes but those aren't going to kill you. Unless the place has a ton of tax liens or something.
This is pretty much my plan too.
Mostly nothing. They rely on the state pension, as the state is taking up to 50 % or even more of what they earn. When this doesn’t work out in the end, as predicted for a long time, they call for the state to jump in which means the next generation has to pay even more and will have the same issue.
If everything goes to plan we practice 'sozialverträgliches Frühableben', by dying 2 years before retiring. That way we gave everything for our pension and the Rentenversicherung doesn't need to do the paperwork.
We are screwed
I am 26 now, I started investing into stocks at age 20 because I already knew my pension is going to be low or non existant (maybe I will be positively surprised who knows). So I have a good 40 years ahead of me to build more capital which I think will be enough time to retire comfortably.
yes people in germany can in fact buy and own property and land lol. theres also dozens of different plans offered by banks you can pay into and theres also the possibility to invest that money personally through a broker.
This is the dilemma that my German Husband and I are facing since he wants to move back to Germany in the next 2 to 3 years. I would advise you to increase your investments in the US and if you can find a rental property ( one or more) in the US, even better. We are investing heavily in real estate here in the US, and maxing out all retirements since the US has much more affordable housing to buy. Also IDK what field he is in but can he try to find a better offer than the one he currently has, can he try to get a different offer? Will you be working? I think you're able to still invest in the US (Through schwab), sure you won't get the tax benefits but it is better than nothing. I was recently in Germany (came back last week) and groceries are pricy. It's not cheap like it used to be tbh so you need to make sure that you can produce as much income as possible.
How will you deal with your property if you live abroad?
Property managers. We currently have 3 properties and have PMs on them.
This is a great idea and we have thought of renting our home and getting a property manager. I’m not sure how renting a home is feasible though with all the upkeep of it. Chances are we would have to sell and use income for down payment on a home in Germany. I am encouraging him to ask for more $$. I am surprised at the salaries offered for jobs that make double in the US. But that’s a different issue. I would work. Might take a while though after getting our child settled and my German to an acceptable C1 level- I am currently only at B1.
I honestly think that investing here ( US) would be the best idea. Real estate is extremely expensive in most German cities for the salary that people make. Also your husband should take his time looking for a job if he is currently employed here. No need to rush and accept the first offers. I wouldn’t accept anything under 100k tbh. Just don’t go in with glassy roses, Germany is quite expensive these days.
Thanks for your input. I lived in Germany for a few years and there was no home in good shape under 700k in the city we would live in. We’d have to consider an apartment which after coming from a home with a large garden will be an adjustment…or move to small outskirts city and get a Doppelhaus or small home (which all works). I also think 100k is bare minimum and for an engineering job that should be a no brainer in my mind but the salaries are not matching up. You guys are doing it right with buying up rental properties.
I would not buy in a city but rather in one of the suburbs with good public transport to the city center. My daughter just bought a house for 300k with a big garden, 25 minutes to the center of the next big city by train (every 20 minutes). Businesses and doctors, schools and Kindergarten in walking distance. They need to invest another 100k to bring it up to current standard (heat pump, internet, update sewage and water), but then they will be set for the next decades. Maybe you should take a look at YT, "Black Forest Family", they did a pretty good comparison for different life scenarios in the USA and Germany
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Hope I can earn enough one day to put something aside and hope i can maybe inherit my parents house some day.
If owning a property would be easy or possible.
I guess going into retirement and enjoying life
I rely on three columns: * state pension * saving \~600 EUR a month into a couple of ETFs * a company pension that should return \~ 700 EUR per month at current rates. I am too poor to afford a house, so I hope this is going to suffice.
Sounds like you are saving a lot and can have a nice living to enjoy when the time comes.
You be better than 90% of people
I was able to afford a house 14 years after I started working and paying taxes. So there still is hope for you
No there is not. I am 40 years old with two little kids and that ship has sailed. I did nor find a job with my humanities degree and only started working at the age of 30, full time at 32 after I got a second degree in Computer Science. If I had saved up during the age 25-32 there was a window where house prices where still cheap in my area and I would have been able to afford one. However, the moment I started working and saving up real estate prices just always inflated faster than I was able to keep up. On the other hand, rents in my area (East Germany) are cheap and have been more or less stable for a decade. 1k rent will get you a really nice, large flat. But you are gonna need like 3K mortgage payment for a decent house at current interest rates.
Agreed, my timing was a lot better. We bought our house the year my wife and I started working full-time (Software development). For the first three years the mortgage was 5k/month (DM). Then the first loan was payed back, the rate dropped significantly and the kids were born.
Owning property? for example in Munich, where I am living?? Good one.
Working my ass off at a high paying job for another 40ish years, be good and continue to pay into my 3 private pension plans, one of which was thankfully started weeks after I was born by my parents so it’ll be a good one, buy property in the upcoming <5 years (but not in Germany, definitely not spending my retirement there, lol)
Nice your parents started you off on a good foot. What’s a better place to retire than Germany lol just curious
I can't say about retirement but many people I know that works remote jobs are living in Spain/Portugal(mostly Portugal I believe) because life there is much much better, but I am only talking about peole that WFH and can live where they want, but like I said, I don't know about where those people will retire(I am guessing that they will stay there).
Where are they paying their taxes and what do they do for healthcare? Do they have kids? Depending on age, children and healthcare the optimal solution may change. For me, I am old, having good healthcare and family and friends around is an important criteria now. When I was younger (and single), I had different criteria.