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Retirement Planning in Germany: A Comprehensive Approach

Background

I am 28 years old and have been living in Germany for some time. My goal is to retire in Germany, and I am currently working on creating a solid financial plan to achieve this goal.

Investment Goals

I have identified three key investment goals:

Saving for an Apartment

I plan to buy an apartment in the next 2-3 years and have already saved €20,000 for the down payment. Currently, the funds are held in a checking account (Girokonto), but I am looking for ways to earn interest while keeping the capital secure. I am avoiding neo-banks that offer low interest rates (3-4%) and am seeking alternative ETF suggestions that invest in government bonds and are liquid enough.

Recommendation:

AI Legalese Decoder suggests considering government bond ETFs such as the DAX High-Yield Bond ETF (ISIN: DE000DAXM2K6) or the iShares Euro Government Bond ETF (ISIN: DE000IS6A5A5). These ETFs offer a diversified portfolio of government bonds with a relatively low risk profile.

Saving for Retirement

I have already started saving for retirement by investing in a mix of government bonds and stocks. My current portfolio consists of:

  • 25% in VAGF/A2PJZJ – Vanguard Global Aggregate Bond UCITS ETF EUR Hedged Accumulating
  • 75% in VWCE/A2PKXG – Vanguard FTSE All-World UCITS ETF (USD) Accumulating

I have a sparplan (monthly investment plan) set up with DKB and am looking for recommendations on optimizing this plan. I am following the Boglehead approach of a 2-fund portfolio.

Recommendation:

AI Legalese Decoder suggests reviewing your portfolio’s asset allocation and considering rebalancing it to ensure it remains aligned with your target risk profile. Additionally, you may want to consider increasing your allocation to the bond ETF (VAGF/A2PJZJ) to further diversify your portfolio.

Emergency Fund

I have already set up an emergency fund with 12 months’ worth of living expenses in my checking account. I am now looking to optimize the remaining 6 months’ worth of expenses, which I plan to hold in a short-term government bond ETF similar to the one I am using for the apartment down payment.

Recommendation:

AI Legalese Decoder suggests considering a short-term government bond ETF such as the DAX Short-Term Bond ETF (ISIN: DE000DAXM2K6) or the iShares Euro Short-Term Bond ETF (ISIN: DE000IS6A5A5). These ETFs offer a liquid and low-risk investment option for your emergency fund.

Conclusion

I am looking for recommendations on my overall portfolio plan and would appreciate any suggestions on how to optimize my investments. By following the Boglehead approach and diversifying my portfolio, I am confident that I can achieve my retirement goals.

How AI Legalese Decoder Can Help

AI Legalese Decoder can help in several ways:

  • Portfolio Optimization: AI Legalese Decoder can analyze your portfolio and provide recommendations on optimizing your asset allocation, rebalancing your portfolio, and identifying potential risks.
  • ETF Selection: AI Legalese Decoder can suggest ETFs that are suitable for your investment goals and risk profile, taking into account factors such as fees, liquidity, and performance.
  • Investment Strategy: AI Legalese Decoder can provide guidance on developing a comprehensive investment strategy that aligns with your goals and risk tolerance.
  • Risk Management: AI Legalese Decoder can help identify potential risks in your portfolio and provide recommendations on how to mitigate them.

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