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Emigrate before retirement: How to secure your finances and standard of living!
The dream of living under palm trees or in the mountains – many Germans consider emigrating before retirement age. But what happens to your pension, health insurance, and taxes? We show you what you need to pay attention to in order to secure your retirement abroad financially. Learn more about your options in a personal consultation.
The topic short and concise
The dream of living under palm trees or in the mountains – many Germans consider emigrating before retirement age. But what happens to your pension, health insurance, and taxes? We show you what you need to pay attention to in order to secure your retirement abroad financially. Learn more about your options in a personal consultation.
The dream of living under palm trees or in the mountains – many Germans consider emigrating before retirement age. But what happens to your pension, health insurance, and taxes? We show you what you need to pay attention to in order to secure your retirement abroad financially. Learn more about your options in a personal consultation.
The dream of living under palm trees or in the mountains – many Germans consider emigrating before retirement age. But what happens to your pension, health insurance, and taxes? We show you what you need to pay attention to in order to secure your retirement abroad financially. Learn more about your options in a personal consultation.
Are you planning to emigrate before retirement age? This article highlights the key aspects, from pension entitlements and tax implications to health insurance abroad. Secure your free consultation now!
Overview of Key Aspects of Emigrating Before Retirement Age
Are you planning to emigrate before retirement age and spend your retirement abroad? This step requires careful planning, especially concerning your finances. There are many aspects to consider, from your pension entitlements to the tax implications and health insurance abroad. Comprehensive preparation will help you avoid pitfalls and maintain your standard of living abroad. At GoMovin, we support you in making your move smooth. Secure your free consultation now!
Brief Introduction to the Topic and Key Questions
Many people dream of spending their retirement abroad. But what happens to your pension if you emigrate before retirement age? What tax obligations must be fulfilled, and what about health insurance? This article provides you with an overview of the key questions and answers regarding emigrating before retirement. We show you how to optimally plan your finances and realise your dream of living abroad.
Pension Abroad: Ensure Full Payment
Basic Information on Pension Payments for Residents Abroad
If you relocate your residence abroad, it is important to know how this will affect your pension payments. The basic rule is: The German Pension Insurance continues to pay your pension abroad. However, there are differences depending on the destination country. Notify the German Pension Insurance of your move in good time, ideally three months in advance, and provide your IBAN and BIC, as described on VR.de.
Full Pension Payments vs. Reductions: What Should You Consider?
Whether you receive your pension in full or have to expect reductions depends on whether your destination country is part of the EU/EFTA or has a social security agreement with Germany. Your status as a displaced person or ethnic German resettler can also affect the amount of your pension payments. It is advisable to seek advice from the German Pension Insurance before emigrating to gain clarity about your individual entitlements.
EU/EFTA Countries and Countries with Social Security Agreements
Within the EU and in Iceland, Liechtenstein, Norway, and Switzerland, nothing changes regarding your pension, as reported by Capital.de. Your pension will be paid in full. In countries with social security agreements, such as the USA or Australia, pension payments are generally possible without problems. However, note that deductions may apply if you have also acquired pension entitlements in your destination country. The German Abroad Association provides detailed information on this matter.
Countries Without Social Security Agreements
If you emigrate to a country without a social security agreement, reductions in your pension may be the result. Therefore, it is advisable to inform yourself in advance and, if necessary, secure private retirement provisions. 1822direkt offers a comprehensive guide on this topic.
Payment of Pension Contributions: Is This an Option?
Under certain conditions, you can have your pension contributions paid out if you emigrate before beginning your pension. However, this is only possible for a limited group of people. German citizens living abroad generally have the right to make voluntary contributions to the pension insurance, which excludes a payout. An exception exists if you renounce your German citizenship. Note that in case of a payout, only the employee's share is reimbursed, and you waive your future pension payments.
Waiver of Future Pension Payments
Only Employee's Share Reimbursed
Loss of Employer Contributions and Allowances
T-Online explains that most Germans do not have the option to have their pension contributions paid out prematurely.
Dual Citizenship and Pension Entitlement
Having dual citizenship can affect your pension entitlement. As long as you hold German citizenship, you have the right to make voluntary contributions to the pension insurance. This generally excludes a payout of contributions. Therefore, it is important to seek advice from the German Pension Insurance before emigrating to clarify the individual consequences. Rentenfuchs.info offers further information on this.
Reduce tax burden: Optimally tax pensions abroad
Taxation of Pensions for Overseas Residents
The taxation of your pension depends on whether you move abroad temporarily or permanently. For a temporary stay, your tax liability in Germany remains. With a permanent move abroad, this can change. It is important to be informed about the tax implications before emigrating and to consult a tax advisor if necessary.
Distinction Between Temporary and Permanent Residence
If you spend less than six months abroad, this is considered a temporary stay. In this case, your tax liability in Germany remains. For a permanent stay lasting more than six months, your tax liability can change. It is important to consider this in your planning.
Neubrandenburg Tax Office (RiA)
The Neubrandenburg Tax Office (RiA) is responsible for taxing pensioners living abroad. If you move abroad permanently, you can apply at the Neubrandenburg Tax Office to remain tax liable in Germany. This can be advantageous if you continue to derive income in Germany and wish to benefit from allowances and joint tax assessment for married couples. 1822direkt notes that this can be particularly beneficial if more than 90% of your income is subject to tax in Germany.
Double Taxation Agreements
Germany has concluded Double Taxation Agreements with many countries. These agreements determine where your pension will be taxed. It is important to be informed about the double taxation agreement with your destination country before emigrating to avoid being taxed twice. A tax advisor can help you optimise your tax situation.
Riester Pension and Residential Riester
If you have a Riester pension or a residential Riester contract, you must reckon with consequences when emigrating outside the EU/EFTA. The grants received usually have to be repaid. Within the EU, you can usually retain your Riester pension free of deductions, even if you are no longer fully tax liable in Germany. Residential Riester can even be used to finance properties within the EU if these are owner-occupied, as VR.de explains.
Optimise health insurance: Ensure protection abroad
Health Insurance Coverage When Emigrating
An important aspect of emigrating before retirement is health insurance coverage. There are different options depending on whether you are moving abroad temporarily or permanently, and whether your destination is within the EU or not. Careful planning is essential here to ensure protection in the event of illness.
Temporary Stay: German Health Insurance and Travel Insurance
For a temporary stay abroad, you can usually keep your German health insurance. However, it is advisable to take out additional travel insurance to cover any treatment costs that the German health insurance does not cover. 1822direkt recommends this combination for short-term stays abroad.
Permanent Stay within the EU: Possible Continuation in German Statutory Health Insurance
If you are permanently moving to an EU country, you have the option to continue your coverage with the German statutory health insurance (GKV). However, this is not always the best option, as GKV benefits abroad may not be sufficient. It may be sensible to take out private health insurance in addition to cover any potential gaps.
Permanent Stay outside the EU: Necessity of International Health Insurance
If you are emigrating permanently to a country outside the EU, your entitlement to benefits from German GKV generally ends. In this case, you will need international health insurance. There are various providers offering special rates for emigrants. Make sure the insurance covers all important services, such as doctor visits, hospital stays, and medication. Capital.de points out that the premiums for international health insurance can be considerable, particularly for older people.
Long-term Travel Health Insurance
Entitlement for Return to German Statutory Health Insurance
An entitlement secures your ability to be re-admitted into the GKV upon returning to Germany.
Care Insurance Abroad
Care insurance is also an important aspect to consider when emigrating. The benefits of German care insurance are generally not fully provided abroad. It may therefore be wise to take out private supplementary care insurance to ensure coverage in the event of needing care. Find out about care insurance benefits in your destination country and compare them with those in Germany.
Navigating Bureaucracy: Fulfilling Obligations to the Pension Insurance
Notification Obligations to the German Pension Insurance
If you emigrate before starting your pension, you must inform the German Pension Insurance about your move. Provide your new address and your bank details (IBAN and BIC). The pension insurance requires this information to ensure your pension continues to be paid correctly. Ideally, inform the pension insurance three months in advance, as VR.de recommends.
Deadlines and Necessary Information (IBAN, BIC)
There is no fixed deadline for notifying them of your move, but it is advisable to do so as early as possible to avoid delays in pension payments. In addition to your new address and bank details, the pension insurance may also require other documents, such as a copy of your passport or residence permit.
Life Certificate
In many countries, you must annually submit a life certificate to prove that you are still living. The life certificate will be sent to you by the pension insurance and must be confirmed by an authority or notary in your destination country. Then return the confirmed life certificate to the pension insurance. 1822direkt points out that there are exceptions for countries with an automatic death notification system.
Annual Proof of Life: Process and Exceptions
The process for submitting the life certificate can vary depending on the country. In some countries, there are specific agencies that can confirm the life certificate. Consult the German Pension Insurance or the German embassy in your destination country for the exact procedure.
Digital Life Certificate (DLN)
The German Pension Insurance is testing the digital life certificate (DLN) in some countries. This allows you to digitally confirm your life certificate using the PostIdent App. This is a convenient and time-saving process, although it is not yet available in all countries. VR.de reports on this test phase.
Financial Flexibility: Using ETF Savings Plans for Retirement
ETF savings plans as flexible retirement provision
In addition to the state pension, you can also prepare for your retirement with an ETF savings plan. ETF savings plans offer you the opportunity to invest flexibly and cost-effectively in the capital market. You can determine the amount of your savings rates and investment focuses yourself. ETF savings plans are therefore well-suited as a supplement to the state pension, especially if you plan to emigrate before retirement and wish to design your retirement provision flexibly.
Opportunities and benefits for long-term financial planning
With an ETF savings plan, you can benefit from the return opportunities of the capital market. At the same time, you diversify your risk by investing in a broadly diversified index. ETF savings plans are generally more cost-effective than actively managed funds. You can adapt your ETF savings plan to your needs at any time and make withdrawals if necessary.
Cost of living in the target country
When planning your emigration, you should also consider the cost of living in your target country. The cost of living can vary significantly depending on the country and region. Inform yourself about the prices for rent, groceries, transport, and other important expenses. Compare the cost of living in your target country with those in Germany to gain a realistic overview of your financial needs. Capital.de points out that Southern and Eastern Europe often offer lower living costs.
Property ownership in Germany
If you own property in Germany, this may affect your tax liability and pension payments. Rental income from property in Germany must be taxed in Germany. The sale of a property may also have tax consequences. It is therefore advisable to seek advice from a tax consultant before emigrating to optimise your tax situation.
Planning Emigration: Allow Six Months' Lead Time
Early Planning and Consultation
Careful planning is essential when you emigrate before retirement begins. Start preparing early, ideally at least six months before your planned move. This gives you enough time to address all important aspects and handle organisational questions. The European Union recommends submitting the pension application at least six months in advance.
Recommendation: At Least 6 Months Lead Time
In the six months leading up to your emigration, you should focus intensively on the following topics: pension claims, tax implications, health insurance, visa and residence permit, finding accommodation, foreign bank account, language skills, and cultural differences. Create a checklist to keep track and ensure you don't forget any important points.
Advice from the German Pension Insurance
Seek individual advice from the German Pension Insurance. The pension insurance can provide information on your pension entitlements, the amount of your pension payments abroad, and the tax implications. Schedule a consultation appointment and ask all your questions. The Deutsche im Ausland e.V. recommends contacting either the Deutsche Rentenversicherung Bund or the Deutsche Rentenversicherung Knappschaft-Bahn-See.
Individual Advice on Pension Amount and Payment
The German Pension Insurance can provide an estimate on the amount of your pension payment abroad. This forecast is based on your previous contribution periods and the applicable laws and agreements. Note that the actual pension payment can depend on various factors, such as inflation and exchange rates.
Consult a Tax Advisor
It is advisable to consult a tax advisor before emigrating. A tax advisor can help you optimise your tax situation and avoid double taxation. They can also provide information on the tax laws and agreements in your destination country. The 1822direkt emphasises the importance of tax advice before emigration.
Securing Your Retirement: Optimal Preparation for Emigration
Summary of Key Points
Moving abroad before retirement is a significant step that requires careful planning. Be thoroughly informed about your pension entitlement, the tax implications, and health insurance coverage. Seek personalized advice from the German Pension Insurance and a tax advisor. Consider the cost of living in your destination country and ensure a flexible retirement arrangement. With careful planning, you can fulfil your dream of living abroad and fully enjoy your retirement.
Call for careful planning and personalized advice
Here at GoMovin, we are happy to assist you with your move abroad. We offer comprehensive advice and help with all organizational questions. Contact us today and schedule a free consultation. Together we will find the best solution for your individual needs. Schedule an appointment now through our relocation assistance offer. Do you need help with administrative formalities? We are also happy to assist you with our administrative service. Moreover, we are your contact for any insurance-related questions.
Plan your worry-free retirement abroad now! Contact us for personal advice and start your new life with ease!
Further useful links
The Deutsche im Ausland e.V. provides detailed information on social security abroad, particularly regarding pension insurance.
European Union informs about receiving state pensions abroad.
FAQ
What happens to my pension if I emigrate before retirement age?
The German Pension Insurance generally pays your pension abroad. However, there are differences depending on the destination country. Inform the German Pension Insurance of your move in good time.
Will I receive my full pension if I move abroad?
Whether you receive your full pension or have to expect deductions depends on whether your destination country is part of the EU/EFTA or if a social security agreement with Germany exists. Seek advice from the German Pension Insurance.
Can I have my pension contributions paid out if I emigrate?
Under certain conditions, you can have your pension contributions paid out. However, this is only possible for a limited group of people. German citizens living abroad generally have the right to make voluntary contributions to the pension insurance, which excludes a payout.
What tax aspects do I need to consider if I emigrate before retirement?
The taxation of your pension depends on whether you are moving abroad temporarily or permanently. If you move abroad permanently, your tax liability may change. Get informed about double taxation agreements.
What is the Neubrandenburg Tax Office (RiA) and what is its role?
The Neubrandenburg Tax Office (RiA) is responsible for taxing pensioners living abroad. You can apply to remain taxable in Germany if this is advantageous.
What about my health insurance if I emigrate before retirement?
If you are staying permanently outside the EU, you will need international health insurance. Within the EU, continued insurance in the statutory health insurance may be possible, but check whether a private supplementary insurance is sensible.
What is a life certificate and why do I need it?
In many countries, you must submit a life certificate each year to prove that you are still alive. The life certificate is sent to you by the pension insurance and must be confirmed by an authority or notary in your destination country.
How far in advance should I plan my emigration?
Start preparing early, ideally at least six months before your planned move. This gives you enough time to settle all important aspects.
