Traveling the world and pension insurance – What you should watch out for
More and more Germans are drawn out into the wide world. For some, the few weeks of vacation per year are not enough. They emigrate or live abroad at least temporarily. Others are even more adventurous and even go on a world tour. What you should know in terms of retirement if you plan a trip around the world, you will learn in the following sections.
World trip and pension – what does that have to do with each other?
At first glance, there is no connection between the two topics. Those who plan to travel around the world are in most cases still young and do not think about what will happen when they reach retirement age later. Moreover, planning a trip around the world involves many things. The pension, no matter whether it is the legal pension insurance or a private pension insurance, has there a rather low priority. Nevertheless, such a trip around the world also affects the later pension payment.
How is that possible? Quite simply. Such a trip around the world lasts on average well 2-3 years, possibly longer.In the time are usually no contributions paid into the statutory pension insurance, because the traveler before departure at the authorities deregisters. This automatically exempts the statutory pension insurance from contributions. The non-contributory period reduces the pension entitlement. However, the reduction in retirement pension is not particularly high for most employees. More serious consequences may result from the fact that the months in which the world traveler was not in Germany are not taken into account in the contribution periods. If an employee wants to retire sooner, he may have to work off the time during which he was traveling around the world later in order to be able to start his pension.
What does private pension insurance say?
Those who have taken out a private pension insurance are often better off with it than in the statutory insurance. The contributions to the private pension insurance are lower than to the statutory insurance. In addition, payments can be suspended, at least for a time, without too many negative consequences. Of course, the rest period reduces the later pension level, but on the other hand, there is no minimum contribution period as with the statutory pension insurance. If you want to plan a trip around the world, it is best to contact your private insurance company well in advance and ask what options are available. If the contributions are not too high, experience has shown that it is best to continue paying the contributions for the duration of the world trip.
Is it worthwhile to pay into the statutory pension insurance voluntarily?
In principle, if the insurance has been made non-contributory, it is possible to continue paying contributions voluntarily. This means that the time for pension entitlement is not lost. How high the contributions are depends on the individual situation. The minimum contribution is currently 83.70 EUR per month, the maximum possible contribution is set by the pension insurance to 1,209 EUR per month. Between these amounts, everything is possible.
Who hopes to get through the voluntary continuation of the contribution payments later times a higher retirement pension, but will be disappointed in many cases. For example, if you pay the minimum contribution into the pension fund every month for a whole year, you will increase your later retirement pension by just EUR 8.90 per month.
For many members of the statutory pension scheme, continuing to pay contributions voluntarily is only worthwhile in order not to lose time in the pension entitlement.
The best thing to do is to contact a pension advisor and get detailed information. The German Pension Insurance offers a free pension consultation in practically every city. However, the appointment must be booked in good time because there are waiting periods of months due to the high demand. The waiting time is worth it, however, because the pension consultant can tell exactly how much time will be lost by traveling around the world based on the estimated duration of the trip.
Are there other options?
Employees have the option to pay in the missing contributions to the pension retrospectively. However, this is only possible as a one-time payment. The payment for the past year must be made by March of the following year at the latest. For most, this option is not worthwhile.
Can the employer help?
This is only possible if he nevertheless pays the employee his salary for the duration of the world trip. Some companies offer employees a sabbatical, for example. This is a paid leave from work for an extended period. During this time, the contributions for the statutory pension insurance will also continue to be paid. Another option is to use a working time account to take extended leave. Possibly the boss will be reasonable and allow the employee to work overtime to replenish the time account before leaving. Accumulating vacation days is not possible according to the law. Vacation entitlement from the previous year must be taken by March 31 of the following year. If this is not done, it is forfeited.
In the event of unpaid leave or leave without pay, no contributions are paid into the insurance scheme. This automatically makes it non-contributory.
It is not a good idea to just file for unemployment and then disappear. Although pension contributions continue to be paid by the employment agency while unemployed, once the unemployed person leaves Germany for an extended period of time, he or she is no longer available for placement. Benefits from the employment agency would be drawn illegally. This would constitute fraud and would be punishable under criminal law.
What other insurances are necessary?
People planning a trip around the world definitely need health insurance. Both the statutory and private health insurance companies provide insurance coverage at best within the member countries of the EU and even then only for a limited time. The protection provided by private health insurance is better, but also does not go far enough for a longer trip.
The solution to the problem: long-term international health insurance. Standard international health insurance only covers short-term trips of 60-90 days. Long-term international health insurance, on the other hand, can be purchased for a maximum period of 5 years. Anyone considering taking out such an insurance policy should note the following
- A conclusion is only possible if the policyholder is registered in Germany. After the start of the trip, from abroad, the long-term foreign health insurance can no longer be concluded.
- In the comparison, the cost per day is given. Most providers require however, that the annual premium is paid in advance. Only a few agree with a monthly payment of premiums.
- An increasing number of countries require proof of health insurance with sufficient coverage upon entry.
- Many hospitals and doctors abroad require the prepayment of the amount before starting treatment.
What other insurances are important?
Accident insurance is usually valid worldwide. For liability insurance, it is advisable to check with the provider. Some are valid worldwide, others are not. Since premiums are usually paid annually and are relatively low, it is usually not worth canceling the contract. Legal expenses insurance can be very useful abroad. However, outside the EU, insurance coverage is often only valid for a limited time. It is best to inquire in good time.
A trip around the world is an undertaking that most people put into practice only once in a lifetime. If it is to succeed, careful planning and timely preparation is inevitable. The better this is done, the smoother the trip will go. Experts recommend compiling a list of measures and the ideal times for them. Certain things like visas, passports and vaccinations take time and cannot be done at the last second. In practice, it has proven useful to create notes on your smartphone and be reminded of the upcoming event in good time. This avoids stress and delays and contributes to an unclouded travel experience.