Retirement investing as a U.S. citizen in Germany

I am eligible for a montly VL payment from my new employer, but I have to prove that I participate in some investment plan when I begin employment in two weeks.

Reading around the finance forum today, it would seem to be that I can't buy into funds as a U.S. citizen. In all likelihood we would retire here, but there are real problems with Riester investments if one doesn't and we don't have children at the moment, so the tax advantages would be minimal.

Perhaps I am misunderstanding all this.

Are there things I am overlooking? What are others doing to invest for retirement? (We have extremely modest income. I have very limited savings from my work in the States and we rent.)

For your VL, you can also sign up for a simple interest-bearing savings account. Many (but not all) banks offer it for VL. The interest is not fantastic, but you get a one-time bonus at the end of the 7 years. In any case, VL is not exactly going to provide you with a large retirement nest egg. Depending on your employer, the contribution is a maximum of 40 € per month. In many cases even less.

I have signed up even US citizen in the past with a VL plan including mutual and investment funds but there always can be problems for reasons discussed at length here on Toytown. The same is true for RIESTER plans and even without children they'll make a lot of sense to you tax-wise (about 30-40% tax break effect on your monthly investments) if you use an "ungezillmerte" version. There, too, sometimes it is no problem to sign on US citizen, sometimes it is. Simply worth a try, I would say. Contact a good independent financial advisor to help you with this...

Cheerio

Thank you both for your replies here and elsewhere. We spent quite a bit of time looking last week and it appears that very few banks still offer VL sparpläne. It pains me to put the money someplace where it is barely eeking out 1% above inflation, no matter how small the sum, but at least we are relatively sure we don't have any other choice.

(Just info for others looking - ING diba was offering 3,25% and the other banks we found were offering 1% or 0,5% with a final bonus of 14% - which is disadvantageous from a tax perspective.)

@Starshollow - your posts have been so helpful re: riesterrente -thank you! (We are planning to retire here, but your explanations helped take the worry out of the decision.)

a small correction on my prior contribution: while double-checking old files I found that the US citizen/German residents I did sign up for VL-plans in the past allways had double citizenship (German, Irish, Spanish) and simply left out their US-citizenship... I tried to find for Ann_MA a VL-plan that would work for her but must admit miserable failure, all options I though I had basically evaporated on closer scrutiny of the small prints. Some of the fund banks only require the financial advisor/broker to check the ID of the account owner, so maybe in some cases the broker can try to mislead the bank by a kind of smokescreen, but of course that can bring all kind of troubles.

Be that as it may: there is at least one bank I know that will allow US-citizen as German residents and even from abroad invest into all kind of funds including monthly saving plans etc (but no VL!) so if anyone has a problem, just contact me, will be happy to help...

Cheerio