From parental allowance to retirement benefits: two experts explain how mothers are the smartest way to plan their finances.
When should I start thinking about my financial planning?
LISA HATE NUMBER: Especially as a woman: as early as possible. Having an overview is just important. At the latest when it is planned to start a family. At that moment you should start to think: what exactly should it look like? Who is responsible for what? How do we want to share the work?
Do I plan this with a partner or do I prefer to do this alone?
LH: In fact, I experience many couples, but also women, who find it helpful when they approach this together. However: I generally recommend my clients to have their financial planning drawn up for themselves. Of course you also want to be there for the family. But I advise the motto “Pay yourself first”: How much money can I put away for myself a month? How much time can I take for myself? And how can I come to a sensible solution in cooperation with my partner that is financially and emotionally manageable for both of you?
Marriage contract: who needs it – and why?
CHRISTIANE WARNKE: Anyone who marries, actually. Because getting married has many legal implications. Everyone now knows cases of war of the roses, in the family, with friends. And if you want to avoid that, then maybe you should sit down and do business games. There are so many twists and turns in life the financial consequences of which can be played out.
What can be regulated in a marriage contract?
CW: Basically, a couple can use it to write their own laws for the relationship and negotiate fair solutions in the event that it no longer works at some point. I’ve just drawn up a contract stating who will look after the horse and cat when the marriage breaks up. But most of all, of course, it is about money issues.
Capital: Whoever marries and has no marriage contract lives in the statutory property regime of the community of gains. In the case of a divorce, it is determined for both parties what he and she owned at the beginning and at the end of the marriage. The gain is calculated according to the formula: final assets minus initial assets. The one who made the higher profit has to pay the other half of the difference, so that in the end both have the same profit. But: Many people today get a property transferred or inherit it. Although this is part of the initial assets, its value often increases massively over the years. This increase in value is an asset, and many cannot finance the compensation for it in the event of a separation. In a contract, for example, the inherited property could be removed from the gain. Or the compensation is capped at a certain amount.
Entertains: According to the law, there is only maintenance until the child is three years old. I often suggest, if financially feasible, to extend the maintenance claim in the event of a divorce. For example, that the person who looks after the children can stay at home until the youngest child starts school.
Pension entitlements: Unfortunately, many women lose sight of this topic. Most of the time it is they who are reluctant to work because of the children. And as a result, your pension will be lower. In the event of a divorce, the pension entitlements – statutory, company, private – are offset against each other and balanced, but both have less overall than if the woman had continued to work normally and paid into her pension. So the couple could agree to voluntarily pay into statutory pension insurance or some other type of retirement plan to compensate for the woman.
LH: Often women choose tax bracket 5 if they earn less than their husbands because the couple saves overall taxes by splitting the spouses. As a rule, this is offset again via the income tax return. But the question is: what does that mean if she accepts the poorer tax bracket? Then what happens to this saved money? Who does this actually belong to? That could also be regulated jointly so that both get something out of it. You can calculate how big this advantage is. And this sum could fully benefit the partner who earns less and is then saved, for example, in a securities account. I think it’s good to put something like that in a marriage contract, because it’s not just about the actual facts, but also about emotions and appreciation. It’s terrible when you get “pocket money” from your spouse.
Does it matter when I sign a prenuptial agreement?
CW: That works anytime. Before the marriage, during the marriage, you can practically make a prenuptial agreement up to a day before the divorce. It is then only called differently – Divorce Consequences Agreement – but has the same meaning: to amicably settle the financial consequences of marriage and divorce. However, it is probably the cheapest for young couples, because then there is hardly any wealth available. The cost of a marriage contract is based on this. That starts at around 2000, 2500 euros.
What if you are not married?
CW: Then there is the possibility of signing a partnership agreement. Important to know: The legislature does not recognize any illegitimate cohabitation. It is treated like a society under civil law. That means: There are no claims in the event of separation. Maintenance only if you bring up minor children together and only up to the age of four. No compensation of assets, no inheritance claim. It is very dramatic when one of the two owns the apartment in which they live together. He can put his partner out of the door overnight, so to speak.
LH: Unmarried persons have no right to inheritance shares in the legal succession. Therefore: it is essential to make a will.
What about Riester contracts …
LH: There are state allowances for the Riester pension – with full funding, 175 euros per year for yourself and 300 euros per year per child born after 2008 (185 euros for older children). But you have to apply for it. The so-called permanent allowance application is usually submitted when the Riester pension is concluded and is then permanently valid. That means you don’t have to worry about it every year, but to be on the safe side, you should definitely check that everything has worked, sometimes errors happen. Most of the time, child allowances are assigned to the woman’s contract, which is the standard solution. But that too can be openly discussed and regulated. The best way to see whether a Riester contract is worthwhile is by means of financial planning. Due to the legally required capital guarantee, one should be aware that the expected return is rather small. The allowances are of course interesting, especially if you have lower incomes and have several children, you can think about a Riester pension.
… and the parental allowance?
LH: The calculation of the parental allowance is not very easy to understand. My advice: deal with it as early as possible. Some couples push this far back, sometimes until after the baby is born, because they just don’t know how to start. An official contact point is the parental allowance office at your place of residence; it is mostly affiliated with the social welfare office, sometimes also with the pension office.
As for the amount, a lot of parents think it’s just 65 percent of their last income. It’s not that simple, some are disappointed because they receive less than they thought. You can also control how high the parental allowance is. The reference value is always the income for the last twelve months. That could be increased if you e.g. For example, ask the HR department at the beginning of your pregnancy whether Christmas bonuses or bonus payments can be included in your current income. And it makes perfect sense to switch from tax class 5 to tax class 3 so that the net income before starting parental leave is higher and then the right to parental allowance is accordingly higher.
Lisa Hassenzahl is an expert in financial planning for families and mothers and founder of Her Family Office in Frankfurt.
Christiane Warnke is a lawyer specializing in family and inheritance law in Zorneding near Munich.
Have a quick look
There is a lot of information about parental allowance, part-time work, child allowances, and maintenance on the website Familienportal.de of the Federal Ministry of Family Affairs.
Build financial knowledge
Now back in stores, updated and expanded: that BRIGITTE finance workbook for women, for self-filling and learning, including with a household book, budget planner and pension calculator. 9.50 euros, at the kiosk or at gettotext.de/workbook