Retirement/Tax Savings

Come to us with your expectations, leave with the most sound investment of your life!


We at India Initiative believe that retirement is when you stop living at work and start working at living. This last leg of your journey deserves to be, if not more, at least equally comfortable as your younger years. This implies that one must have enough wealth to support their lifestyle in those golden years. Most social security administrations across the globe state that their payments are only able to replace approximately 40% of the pensioners’ incomes.   

Aware of the inability to compensate its citizens with enough pension for their retirement, most countries, including Germany, offer several programs that allow for tax-deferred investments whilst providing sizable tax breaks on the invested amounts. In simple terms, not only the yearly income tax is reduced but also the taxes owed on the income your investments accrue are deferred, thus giving rise to an earning-on-earning compounding effect for your corpus.   

We at India Initiative, start by understanding our NRI customers’ retirement plans and preferences and consequently developing tailor-made plans for their retirement. Whether you are planning a retirement back home in India or are planning one here in Germany, or perhaps you want to build a retirement corpus and use it to pay off your retirement abode! The options are innumerable, and our versatile know-how enable us to offer an investment cycle that fits your needs comfortably!  

Several tax subsidized state retirement saving programs are out there and so are synergies we can offer our clients that help them design flexibility, substantial returns, reduced risk and minimized tax consequences into their personalized wealth plans!   

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  • Understanding the customer’s retirement goals and wishes  
  • Balancing your portfolio with guaranteed investments   
  • Maximizing tax savings to fuel retirement investments  
  • Building a retirement income as per inflation projections  
  • Diversifying the portfolio into flexible, lumpsum and lifelong pension   
  • Maximizing access to social security benefits  
  • Availability and access to private as well as Government sponsored retirement plans  
  • Continued service for the duration of the contract 
  • Multi-lingual team 


Tax Saving

A well-chosen retirement plan could save you up to thousands of euros in income tax you pay to the government.  

Tax-Deferred Income

The ideal retirement plans offer tax deference until after you retire which fuels your wealth accumulation as well as reduces the tax owed as you pay them as per retirement brackets. 


Depending on the retirement plans you chose, pay-outs can be in part, lumpsum or as pension for life long.  

A Clear Strategy

Essential to any wealth plan is having a clear strategy which allows for different expense scenarios to be taken care of without diminishing your retirement income.  

Synergies with Life Insurance

Any career is certain to have an end date, but so does life. Alternatives allow for retirement plans in combination with insurance covers to take care of your family in your absence.  

Change is Inevitable

Some start too late or some are not able to continue at the same level of investment because of circumstances, allowance for flexibility in this regard is essential and an ideal retirement plan is one that takes care of your pension for life in either case. 


Type 1

Real Estate

Real Estate is a frequently chosen retirement income source with ROIs being as high as 8%. Since the property gains value while generating monthly income in a dependable German renter’s market, it stays one of the highest net worth boosting investments compared to passive alternatives.

High rental income that covers a majority of the cost of buying property in Germany in combination with an efficient mortgage that finishes off before you retire can take away your stress of an uncertain retirement. Tax benefits in buying investment properties vs. buying a property for selfuse are just a cherry on the top! 

Type 2

Mutual Funds

Funds, balanced or risky, fixed income funds or not, ones that pay dividend or those who do not, all serve a purpose for the investors that chose them based on their individual preferences. Even though, resulting yields do not always end up being in double digits, funds are an important asset allocation tool in one’s portfolio.

Diversification within industries that the funds may be focussed on along with a mix of underlying asset types (stocks, bonds and money market), together create permutations and combinations of investment avenues that you can chose from and take advantage of while planning a retirement income for yourself. 

Type 3

Government Sponsored Retirement Plans

The socialist democracy that is Germany, offers its residents several cash and tax benefits based on the economic, employment and family status. This is done to compensate for the reduction in payments of the statutory pension system.

One can chose from the different programs available that may differ in maximum yearly contribution, tax benefits, pay-out formats as well as ROIs. As it is with all other investments, how early you start contributing to these programs will substantially impact how bright your golden years will shine! 


1st Option: Rakesh A

Rakesh A is 30 years old and has chosen a two-part retirement plan with his wealth manager. A monthly investment of 500 Euros in mutual funds which results in total accrued wealth of 6.198 Euros at the end of the year, given a fund performance of 6%.  

After completing 12 months, the accrued 6.198 Euros are invested in a government sponsored retirement plan which is a tax-deferred plan while providing for a maximum possible 43% tax return. The tax return could be for each investment year totals to 2.665 Euros.  

By the age of 63, Rakesh would have invested 198.000 Euros for his retirement, of which he would have received 88.000 Euros back in tax returns and created a retirement corpus 640.000 Euros. 

2nd Option: Rakesh B

Rakesh B is 30 years old and has purchased an investment property worth 250.000 Euros in a growing Tier 2 city of Germany. The sum of the monthly mortgage payment and Haus geld, is 1.000 Euros while the rent received monthly is 900 Euros.   

With a mortgage finishing before his retirement, he would receive a monthly gross pension of 3.300 Euros in form of rental income from this property (inflation-adjusted). Total invested amount which he has paid is 118.000 from his own pocket including an assumed maintenance cost of 200 Euros for every month for 33 years.   

Apart from benefits from the tax-deductible annual interest rate paid to the bank for investment properties, the value of the real estate when Rakesh is 63, would be approximately 663.000 Euros if a 3% CAGR is assumed.   

3rd Option: Rakesh C

Rakesh C is 30 years old and has chosen a government sponsored retirement plan which permits him to invest 175 Euros every month. Since he is married and has two kids, he invests 110 while the state contributes the 65 Euros difference each month towards his retirement investment.    

Over 33 years of contribution, he has accumulated 200.000 Euros in his retirement corpus while having invested only 43.000 Euros from his pocket. The remaining corpus consists of accrued compounding interest, state’s cash benefits and the accrued interest on those amounts.   

He can use this accumulated wealth to either pay for a property where he will reside during his retirement, receive pension lifelong or alternatively a mix of both options. 

4th Option: Suresh

Suresh is 30 years old and has not made any investments towards building a substantial retirement fund. He is planning his retirement based on the state pension that he is due to receive which amounts to approximately 2.000 Euros every month.   

His current expenses for the entire family excluding housing are 1.500 Euros, which at a compounded inflation rate of 2% would sum up to be 2.900 Euros each month when he retires. Unfortunately, these expenses would continue to increase at the inflation rate prevalent at that time. 



How can I find out how much Rente I will receive upon my retirement in Germany

Rentenbescheid, a pension statement is sent to you on a yearly basis by the state which provides you information about how much pension are you entitled to when you retire provided you continue to pay the statutory pension contribution for the duration of your career.

I think the state pension will suffice as means of living in my retirement, if so, why do I need additional Rente protection?

With the rising elder population and pay-as-you-go scheme of pension rollout in Germany, the ‘forecasted’ amount of Rente to you can very well remain to be only a projected amount. The decreasing social security should act as a perfect indication for you to secure at least a certain amount that guarantees your current standard of living upon your retirement.

How? We, at India Initiative, assist our clients in understanding how much pension they will get from the state and by calculating the expected expenditure levels during retirement, we introduce them to avenues they can invest in to build up a retirement corpus that shall suffice their expected retirement lifestyle affordability. For a personal case analysis, contact us now!

Are there retirement programs in addition to the state pension program that the government currently sponsors?

Yes, there are various private as well as government sponsored investment avenues ranging from real estate and funds to precious metals such as gold. Diversification is key; however, a personal tailored wealth plan can be created for all our clients.

Because your retirement plan should be based on your financial goals, not just ‘products’!

I am unsure about my future in Germany, will I be able to get my state as well state sponsored pension in other countries?

Different programs offer different pay-out options, not only in terms of duration and amount but also in terms of national versus international payment modes. One can chose from the variety of programs that are available based on their specific plans.

At India Initiative, we care specifically for our expat clients and make sure our suggested solutions offer your flexibility and stress-free retirement in any part of the world you’d want.

Do all retirement investments only pay out in form of pension?

No, some pension plans offer lump-sum payments with complete flexibility, while others offer part lump-sum part pension pay-outs. There are also some programs that allow lump-sum pay outs for paying off your home loan, while others pay-out only in form of pension. We offer this information to all our clients upfront so that they can make an informed decision.

Additionally, some of our partner associations also facilitate flexibility and give you an edge in deciding when to take lump-sum or pension until your retirement begins! You do not have to decide from the get-go!

How can tax savings be induced by investment in retirement plans?

Most government sponsored retirement plans offer ‘tax-deference’ on accrued income as well ‘tax rebate’ on the amount invested on a yearly basis. Private retirement plans do not offer this tax benefit directly but can be synergically combined with real estate or precious metal investments to carry certain tax benefits for your future. After all, a penny saved is a penny earned.

Note: Please read our Retirement introduction to realize the difference between tax-deference and tax-rebate.

Is the interest paid on home mortgages always tax deductible?

No, the interest paid overall is only deductible if the property is not purchased for self-use, or in other terms, is a capital investment. Only when real estate investments are made for the purpose of renting out, they are tax deductible.

When does a real estate investment become tax free with regards to capital gains?

A real estate investment for self-use becomes tax free if you have lived in the property for 3 years consecutively. If this investment is made for the purpose of renting out, the capital gain becomes tax free after 10 years.


We have an answer to every one of your concerns about our services. Ask us.

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India Initiative
Lohwaldstr. 63
86356 Neusäß
+49 (0) 157 923 998 85
Real Estate Investment
Tax and Retirement Savings
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