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More than half of senior citizens in Germany own a home and live rent-free in old age. But the way to one’s own four walls was rocky: two thirds of this group invested most of their money in their own property during their working life. Today’s pensioners could therefore not save much in addition, as the majority of the wealth is in the house or in the apartment. In addition, one in four people did not manage to repay the real estate debts completely until retirement. This is shown by a study conducted by Deutsche Leibrenten AG among more than 1,000 retired German citizens.

“Many pensioners are stuck in an economic dilemma: on the one hand, they have saved during their lives and diligently prepared for retirement; on the other hand, they cannot release their tied assets because they do not want to give up their beloved home and familiar surroundings,” says Friedrich Thiele, CEO of Deutsche Leibrenten AG. Instead of enjoying a carefree retirement, the following applies to many people even in old age: keep well and limit yourself financially. For every second respondent, their financial situation would improve significantly if the assets tied up in the property could be used.

The results of the study show how much the age of retirement is burdened: for 56 percent of the respondents, their financial situation in retirement has worsened. And looking to the future does not promise any improvement: around 30 percent expect a further financial deterioration in the next five to ten years. The repayment of remaining debts on the property is hardly possible. “Our experience shows that if you have not paid off your home by the time you retire, you will bequeath the debt to your heirs,” explains Thiele. According to Thiele, the concept of a real estate pension has proved its worth in order to free up the financial resources to maintain the usual standard of living, and cover necessary renovation measures and costs such as for healthcare.

“With our model, we offer many homeowners the opportunity to finally become debt-free. The real estate pension solves the dilemma. It allows seniors to stay in their own home and still use their assets,” says Thiele. This is because with a real estate retirement, your own house or apartment may be sold, but the former owners remain in it rent-free for life. You will also receive a monthly pension payment, a one-off payment or a combination of both. Both the rent-free right of residence or usufruct and the life annuity are notarized and entered in the land register. “This means that retirees are protected until the end of their lives and they can stay in their property for as long as they want. And even if you later move to a nursing home, you benefit from the rental income. In view of the currently high real estate prices in particular, seniors can look forward to the future with this model,” says Thiele.