What are ETFs? How do I invest in them? Should I use them to supplement my retirement income? What is ETF pension insurance? Let us explain
There is a lot of jargon surrounding finances, and we get it – it can be hard to keep it all straight. If you have ever confused ETF with NFT, you are forgiven! Allow us to clear up what ETFs are, why it is a good idea to invest in them to save for retirement, and what options you have for investing in them.
What is an ETF?
ETF stands for exchange-traded fund. That means it is a fund that can be traded on an exchange like a stock. An ETF is like a basket of investments such as stocks, commodities, or bonds. When you invest in an ETF, you invest in everything in it, and the contents may fluctuate over time.
Why is it important to make private provisions for retirement?
Relying on a state pension is unpredictable – our demographics are changing, pension levels are declining and inflation is on the rise. To maintain a comfortable lifestyle in retirement, you would ideally have 80% of your last net salary at your disposal, but current pension levels in Germany provide less than 50%.
Inflation is also making life more expensive and our savings worth less, and unfortunately, the energy crisis in Europe has driven inflation to the highest it has been in 25 years.
A statutory pension often won’t suffice to provide long-term financial security, so it is important to make private provisions as early as possible. A private pension plan will help you grow your money and close the gap.
Pros and cons of investing with ETFs
ETFs and inflation
You can protect your investments from inflation by being broadly diversified and sticking with a long holding period that can withstand market fluctuations. ETFs are a great way to do this because each fund contains many securities, and are best held over long periods of time.
Certain types of ETF can protect your investments from inflation, such as funds based on more robust industries like consumer staples or utilities, gold, luxury goods companies, and raw materials.
How do I invest in ETFs?
Basically, there are two options how you can invest in ETFs:
Although many people think ETFs only make sense in a securities account, it's worth taking a look at the second option. We recommend a combination of both solutions, but more about that now.
Why invest with an insurance policy?
An ETF pension insurance is a proactive way to reliably invest long-term in your own retirement provision that comes along with numerous advantages:
What do I get with Getsafe?
All of the above, plus…
Talk to us to get more information and advice about investing in ETFs when it suits you.