Retirement Planning for Managing Directors: How to Secure Your Future
This guide refers to German law and the German tax system. It is a translation of our German original and does not replace individual tax or legal advice.
Retirement provision is an essential building block for everyone on the way to retirement. While conventional retirement provision systems are aimed at employees, managing directors of a GmbH (German limited liability company) benefit from tax-optimised models and a special form of occupational pension provision (betriebliche Altersvorsorge, bAV) that differs significantly from the regular bAV for employees. We present two specific options and explain why an equity-based pension (Aktienrente) should be an essential part of your retirement planning strategy.
As an independent investment adviser, Neo Capital supports managing directors in particular in developing tax-optimised retirement provision across all asset classes, so that shareholders and managing directors can keep their personal standard of living in retirement predictable.
Occupational pension provision for managing directors with a 100% equity allocation
Alternative models to the Riester pension, the Rürup pension and conventional pension insurance are particularly interesting for managing directors. Our advisory approach aims for an immediately visible tax advantage, as the company invests on behalf of the managing director with a 100% equity allocation. When it comes to the payout in retirement, annuitisation, tranches or a lump sum are available depending on your personal situation – considerably more flexible than conventional pension models. The investment risk is decoupled via the managing director, meaning that no claims can be asserted against the GmbH. As a rule, your personal tax rate applies on payout, and the funds from the bAV are only available from the age of 62 – which argues for a long investment horizon and thus an optimal return within the company.
Equity-based pension as a special solution for managing directors with insolvency protection
The equity-based pension as a special solution for managing directors offers an attractive opportunity for long-term capital growth. In the event of a possible insolvency of the managing director and their company, the contributions paid in remain unaffected – the bAV commitment decouples the pension benefits from the entrepreneurial risk. Depending on the size, age and risk group of the company, this insolvency protection plays an essential role in achieving the same level of security as with conventional retirement provision. Once the bAV is ready for payout, IAB-eligible investment options (Investitionsabzugsbetrag, investment deduction) can reduce your personal tax burden, as the funds are only taxed at the level of the managing director.
Neo Capital: occupational pension provision for your needs
Occupational pension provision for managing directors is indispensable for retirement. As corporations provide the optimal basis for this, we advise you, in cooperation with your tax adviser, on the extensive options available through your GmbH as employer. Are you interested in the options of occupational pension provision and would you like to assess the implementation routes for your situation? We will be happy to answer your questions in a personal meeting and advise you comprehensively and without obligation, from planning through to tax-optimised investment.
Frequently asked questions
Does an insurance policy have to be involved in order to use tax advantages?
No, we also have the expertise to set up insurance-free pension schemes. These create liquidity from the outset and are one of the most effective building blocks of modern net salary optimisation.
What advantages does investing in equities offer shareholders and managing directors?
When your company invests in equities, you benefit from directly visible tax advantages and a free choice of funds. Your bAV is subject to insolvency protection and is paid out from the age of 62; you can additionally reduce the tax burden on your payout through IAB-eligible investments.
How do I structure my retirement provision as a shareholder or managing director of a GmbH?
We specialise in developing and implementing specific models for managing directors. Together, we secure your retirement provision as a shareholder or managing director and subsequently reduce your personal tax burden many times over.
Is my company suitable for occupational pension provision?
In principle, both partnerships and corporations qualify for setting up occupational pension provision for shareholders and managing directors. Our staff will advise you without obligation on the subject of bAV and on your options in retirement.