Pension provisions are triad (double).

Statutory pensions alone will not be enough. Fewer and fewer Germans doubt this, as a recent survey conducted by opinion research institute Civey on behalf of Deutsche Bank shows.

Overall, a majority of 80 percent believed that state benefits for old age would be too low to maintain their standard of living. Yet only half are in the process of closing the estimated gap through private provision. What’s striking: Many people under 30 are not currently taking any precautions (61 percent).

In fact, it is the younger generation who benefits. The earlier you start saving privately, the more you can benefit from interest and the effects of compound interest over the years. Therefore, first of all, it is important that we not only recognize the need, but also start closing the pension gap.

It is precisely the window that will inevitably result from the fact that when you retire, income will fall more sharply than expenses. Rent, food, insurance, living also cost money in old age — but you don’t usually think about it when you’re young: “They often put off those topics,” the survey said, “either for financial reasons or because they don’t think they’re relevant yet.”

Anyone who tackles this complex problem effectively will find that there are many ways to take precautions. But which is the best choice? Riester pensions, Rürup pensions, private pensions – the market is large and sometimes confusing.

A private pension is a private pension insurance policy which, in contrast to the Riester and Rürup concept, is not funded during the savings phase, but rather when you retire. This works because only a portion is taxed when payments are made later.

Without tax incentives, such retirement products rarely pay off. They are also considered expensive and not very flexible.

Private pension provisions work more flexibly with ETF savings plans. ETF (Exchange Traded Fund) is an index fund that is traded on an exchange. It contains shares of companies reflected in this index – on Dax, for example, shares of the 40 largest German companies.

But there are also ETFs that track more than 2,500 companies, such as MSCI World, a type of global stock index. This spreads the risk when investing. However, there is no 100% guarantee that the index will not lose value.

That’s why, thirdly, it’s so important: Anyone relying on ETFs, among other things, for retirement planning needs to have a lot of resilience. This is not contradictory if the goal is a financially secure retirement. Anyone who takes the trouble to open a securities account and select an appropriate ETF will typically earn above-average returns over an investment period of more than ten years – at relatively low costs.

When looking at countries where old age has better financial management, a triad stands out. These countries – often Scandinavian countries – achieve better interaction between the three pillars: statutory, corporate and private pension provision. The second and third pillars reach almost 90 percent of the people there.

Germany still has to catch up. Not only in private pension schemes, but also in company pension schemes. Currently, only every second employee in the country who is subject to social insurance will receive a company pension. And this despite the fact that everyone has the right to it.