Pension in Germany

Germany’s pensions will help you secure income in retirement - even if you decide not to retire in Germany. You can even save a lot of taxes with pensions in Germany!

The German Pension System In A Nutshell

The German pension system is a complex and comprehensive social security system designed to provide financial support for people in retirement. It is based on a pay-as-you-go system where current workers pay into the system to support current pensioners.

The pension system in Germany has three main pillars: public pension insurance, occupational pension schemes, and private pension schemes. These three pillars are in turn divided into three different levels. Level 1 is the statutory pension and the Rürup pension, level 2 is the company pension and the Riester pension, and level 3 is the private pension.

In level 1, the public pension insurance provides a basic pension to all people who have paid into the system for at least five years. Contributions to the public pension scheme are paid by both employees and employers, and benefits are based on a formula that takes into account previous earnings and the number of years of contributions. Public pension insurance also provides additional benefits such as disability pensions and survivorspensions. The second pension option in Level 1 is the Rürup pension. This is a private pension product that is structured similarly to public pension insurance in terms of its conditions. The advantage here is that you enter into a contract for yourself, which means that you do not support other pensioners with it. This is a very good alternative for self-employed, freelancers or employees who want to save additionally for their pension, as the payments are tax-deductible.

In Level 2 is the occupational pension scheme, which is provided by employers for their employees. This is an additional source of income for retirement. It is often structured as a defined contribution plan, where the employer (at least 15%) and the employee make contributions to an individual retirement account that is invested to provide a retirement income. In addition to this, there is also the Riester pension in Level 2. This is a private pension that is subsidized by the state and tax-deductible. The Riester pension can be a very good additional retirement product for families as you get 300€ in governmental bonuses for each child.

The level 3 private pension is a voluntary contribution in addition to the public pension savings. This additional pension savings option can be incredibly useful, as the average state pension in Germany is 1.361€ for men and 1.148€ for women. Unlike the other insurances, the Level 3 private pension does not offer tax savings in the payment phase, but in the payout phase. This has some advantages. First of all, the taxes in the pension phase are very low. In addition, contributors gain enormous flexibility and can also use the private pension as collateral for a real estate investment.

Currently, the retirement age in Germany is 67. However, this is likely to be raised gradually in the future, as the German public pension system is currently running an extremely high deficit (100 billion in 2022). Nevertheless, every person in Germany has the option of retiring earlier or later. However, if you retire earlier, you can expect lower benefits, while if you retire later, you can expect higher benefits.

Overall, the German pension system is a complex and multi-layered program that offers financial support to people in retirement. Although it is not easy to navigate, it is an essential part of social welfare in Germany and it is important that everyone understands how the system works and what benefits are available.

Our latest pension videos

In our YouTube playlist on pensions in Germany, we go into the details of the German pension system and tell you how it works and what you need to know. We cover many topics to help you find your way around the German pension system.

Our Latest Pension Blog Posts

In our blog, we cover everything there is to know about pensions in Germany. Among other things, we provide information on current events, misunderstandings, errors, and changes in the German pension system.

Our Latest Pension Blog Posts

In our blog, we cover everything there is to know about pensions in Germany. Among other things, we provide information on current events, misunderstandings, errors, and changes in the German pension system.

Calculate your possible retirement income in Germany

With our calculators, you can calculate all possible pension scenarios. From the state pension to the Riester pension. This way you can get an idea of if you already make sufficient provisions for old age or if you should make additional provisions.

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Public Pension Calculator

Calculate your pension in retirement age from the German public pension.

Base Pension Calculator

Calculate your tax benefits from a base pension level 1 (Rürup-Rente).

Riester Pension Calculator

Calculate the tax benefits & subsidies you will get from a German Riester pension.

Retirement Income Calculator

Calculate your NET retirement income from various public & private sources.

Calculate your possible retirement income in Germany

With our calculators, you can calculate all possible pension scenarios. From the state pension to the Riester pension. This way you can get an idea of if you already make sufficient provisions for old age or if you should make additional provisions.

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Public Pension Calculator

Calculate your pension in retirement age from the German public pension.

Riester Pension Calculator

Calculate the tax benefits & subsidies you will get from a German Riester pension.

Base Pension Calculator

Calculate your tax benefits from a base pension level 1 (Rürup-Rente).

Retirement Income Calculator

Calculate your NET retirement income from various public & private sources.

Are you looking for something specific?

Public Pension

The public pension scheme in Germany is an important source of retirement income. If you would like to learn more about how the public pension in Germany works, including its eligibility criteria, benefits, and contributions, you can go to our page on the public pension on the right.

Our page provides comprehensive information on the above aspects of the German social security system and helps you understand your rights and options when planning your retirement.

Public pension in Germany

Our latest public pension videos

In our YouTube playlist on the German public pension, we go into the details of the German pension system and tell you how it works and what you need to know. We cover many topics to help you find your way around the German pension system.

Our latest public pension blog posts

In our blog, we provide comprehensive information about public pension insurance in Germany. We report on current events, misunderstandings, and changes in the field of public pension and keep you up to date.

Are pensions in Germany tax-free?
Tax-Free pension in Germany

Does the German tax-free pension exist? 🤔 In this blog post, you will learn about the taxation of all different pensions we have in Germany (all three levels).​

Our latest public pension blog posts

In our blog, we provide comprehensive information about public pension insurance in Germany. We report on current events, misunderstandings, and changes in the field of public pension and keep you up to date.

Calculate your future pension in Germany

With our calculators, you can easily see what your future pension in Germany looks like. Therefore, you can calculate your public pension, your pension age, and your total retirement income. 

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Public Pension Calculator

Calculate your pension in retirement age from the German public pension.

Retirement Income Calculator

Calculate your NET retirement income from various public & private sources.

Calculate your future pension in Germany

With our calculators, you can easily see what your future pension in Germany looks like. Therefore, you can calculate your public pension, your pension age, and your total retirement income. 

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Public Pension Calculator

Calculate your pension in retirement age from the German public pension.

Learn More About Pension in Germany On Social Media

Social media can be a valuable source of information when learning more about pensions in Germany. By following our accounts, you can get helpful tips, news, and resources related to the pension system and regulations in Germany.

 

Rürup Pension

The Rürup pension, also known as the base pension, is a type of private pension in Germany that offers tax benefits and a guaranteed income stream during retirement.

If you are interested in learning more about the Rürup pension and its benefits, including eligibility requirements, contribution limits, and payout options, we invite you to visit our page dedicated to this topic.

Our page provides comprehensive information on this important retirement savings option, helping you make informed decisions about your financial future.

Our latest Rürup pension videos

In our YouTube playlist on the German Rürup pension, we go into the details of the Rürup pension and tell you how it works and what you need to know. We cover many topics to help you find your way around the German pension system.

Our latest Rürup pension blog posts

In our blog, we provide comprehensive information on the German Rürup pension. We report on current events, misunderstandings, and changes in the field of Rürup pension and keep you up to date.

Our latest Rürup pension blog posts

In our blog, we provide comprehensive information on the German Rürup pension. We report on current events, misunderstandings, and changes in the field of Rürup pension and keep you up to date.

Calculate your own tax savings with our rürup pension calculator

With our calculators, you can easily see what your future pension in Germany looks like. Therefore, you can calculate your individual retirement income including a calculation for the Rürup pension.

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Base Pension Calculator

Calculate your tax benefits from a base pension level 1 (Rürup-Rente).

Retirement Income Calculator

Calculate your NET retirement income from various public & private sources.

Calculate your own tax savings with our rürup pension calculator

With our calculators, you can easily see what your future pension in Germany looks like. Therefore, you can calculate your individual retirement income including a calculation for the Rürup pension.

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Base Pension Calculator

Calculate your tax benefits from a base pension level 1 (Rürup-Rente).

How You Benefit From Working With PerFinEx

PerFinEx GmbH is registered as an independent financial advisor in all fields of personal finance: insurance, investments, and loans according to § 34 German trade regulations (Gewerbeordnung) & supervised by the German Chamber of Commerce and Industry (IHK).

Independent Advice

We are an independent financial advisor working with hundreds of different banks, insurance & pension companies.

No Additional Costs

We are paid in commissions that the German government regulates. Working with us comes at no extra cost for you.

Licensed & Regulated

We are licensed in all 3 different fields of personal finance and compliant with German financial laws & regulations.

Riester Pension

The Riester pension is a popular retirement savings option in Germany that offers tax benefits, government subsidies, and a guaranteed income in retirement. In addition, the Riester pension can serve as collateral for a home loan.

If you would like to find out more about the Riester pension, including eligibility requirements, contribution limits, and payout options, you can learn more on the following page.

Our page provides comprehensive information on this important aspect of the German pension system and helps you understand your rights and options when planning your retirement.

Our latest Riester pension videos

In our YouTube playlist on the German Riester pension, we go into the details of the Riester pension and tell you how it works and what you need to know. We cover many topics to help you find your way around the German pension system.

Our latest Riester pension blog posts

In our blog, we provide comprehensive information on the German Riester pension. We report on current events, misunderstandings, and changes in the field of Riester pension and keep you up to date.

How to save for retirement
How to save for retirement in Germany – Helpful guide

The German public pension seems to be completely sufficient. However, this is not the case. That's why we describe for you in this article how you can best secure yourself for retirement and how to save for retirement in Germany.

Are pensions in Germany tax-free?
Tax-Free pension in Germany

Does the German tax-free pension exist? 🤔 In this blog post, you will learn about the taxation of all different pensions we have in Germany (all three levels).​

Our latest Riester pension blog posts

In our blog, we provide comprehensive information on the German Riester pension. We report on current events, misunderstandings, and changes in the field of Riester pension and keep you up to date.

How to save for retirement
How to save for retirement in Germany – Helpful guide

The German public pension seems to be completely sufficient. However, this is not the case. That's why we describe for you in this article how you can best secure yourself for retirement and how to save for retirement in Germany.

Calculate your own state subsidy with our Riester pension calculator

With our calculators, you can easily see what your future pension in Germany looks like. Therefore, you can calculate your individual retirement income including a calculation for the Riester pension.

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Riester Pension Calculator

Calculate the tax benefits & subsidies you will get from a German Riester pension.

Retirement Income Calculator

Calculate your NET retirement income from various public & private sources.

Calculate your own state subsidy with our Riester pension calculator

With our calculators, you can easily see what your future pension in Germany looks like. Therefore, you can calculate your individual retirement income including a calculation for the Riester pension.

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Riester Pension Calculator

Calculate the tax benefits & subsidies you will get from a German Riester pension.

What Our Amazing Clients Say About Us

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Maris WintersMaris Winters
12:58 10 Apr 24
Axel is clear, communicative, helpful and prompt. I've really appreciated his help and am glad to be working with him.
Hesham Kamal EldinHesham Kamal Eldin
00:17 23 Mar 24
I have recently signed my new pension contract with the aid of Axel from PerFinEx. My first impression is very positive. Axel helped me with his experience to find the right program for me in a smooth and professional way. I highly recommend PerFinEx to anyone who wants honest and experienced support for financial planning.
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11:00 14 Mar 24
Very polite and supportive team!
Veronica JonssonVeronica Jonsson
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Starting to invest in ETFs has felt very overwhelming, but not anymore! PerFinEx helped me start my pension savings in just a week (which would've taken me months of research, confusion and stress otherwise). Thank you, Axel, for the excellent guidance. I can recommend anyone trying to get a better grip on their finances to set up a meeting PerFinEx!
emrah can çetinkayaemrah can çetinkaya
07:34 26 Feb 24
As a newcomer to Germany, I can say that PerFinEx has been really helpful in clarifying my questions on various topics.
Ana P SantosAna P Santos
11:33 30 Jan 24
The PerFinEx videos were very useful for my research on what pension fund to invest in. I made an appointment with PreFinEx after watching the videos and making copious notes. Axle clearly explained the different pension levels to me and helped me make an informed decision as to where I could safely and wisely invest my money. Would definitely recommend PerFinEx services when planning your future.
KIVANÇ KARAOĞLANKIVANÇ KARAOĞLAN
09:46 30 Oct 23
I feel so lucky to have the chance to work with PerFinEx and Axel. PerFinEx, under the leadership of Axel, has a comprehensive knowledge of the health insurance system in Germany. He first tries to understand and identify your expectations and requirements then he finds the best way for you during the transition from public to private insurance. They are doing a great job providing valuable information to all the expat- non-German speaking community. Now I am asking myself why I lost that much time. I should have contacted Axel a long time ago. It is also great to feel that they will be always there to help you anytime you need. I would strongly recommend this company to work with. Please note that they have also other services such as pension systems, financial investments, real estate, etc.
Mohit SoodMohit Sood
21:07 02 Oct 23
I had two meetings with Axel. Everything was very smooth. He helped me shortlist couple of Health insurances. I had multiple queries before and after the meeting, Axel was very clear in his answers and patient with me throughout the process. It was a nice experience for me. I would definitely recommend their services.
Parth Sarthi PandeyParth Sarthi Pandey
14:50 07 Dec 22
It was wonderful working with PerFinEx. You get clear and honest advice and I had one of the most smooth experiences of buying any policy in Germany.
I've had a few calls with the folks from PerFinEx. I quickly built trust and started using their services. They present themselves as a key partner for your finances, specially when you are not from Germany.I'm looking forward to building a lasting business relationship with them. It's been such a great start.
Rajwinder SinghRajwinder Singh
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Best Financial advisor for Expats! I am happy to collaborate you. Thanks for advising on how to maximize my financial gains. 🙂 I would totally recommend PerFinex to anybody looking to maximize their earnings.
Satwik ShenoySatwik Shenoy
09:55 20 Jun 22
PerFinEx for expats in Germany is a legit one-stop shop for all your insurance needs and financial planning. They managed to solve all my insurance problems in Germany in no time and their YouTube videos are super informative.Axel and Pascal were a pleasure to work with. I'd highly recommend you talk to them. Even if you already have your insurances, you could revisit your current situation and work on making them better and more efficient. The way he speaks clearly shows he is here to help.Wishing you all the very best and keep those videos coming!
Luis Alfonzo GonzálezLuis Alfonzo González
20:52 15 Mar 22
I first got in touch with Axel through his YouTube channel, then we arranged a meeting and he was super helpful and explained everything to me. I really value his patience and work ethic. I can recommend him for all expats living in Germany!
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Company Pension

The company pension in Germany is an important aspect of retirement planning for employees. It is a retirement benefit provided by the employer to its employees in addition to the public pension. The purpose is to ensure that employees can maintain their standard of living after retirement.

In Germany, there are different types of company pension schemes, e.g. direct insurance, Pensionskassen, and Pensionsfonds. Which type of pension scheme a company offers depends on factors such as company size, industry, and collective agreements.

You can find out more on our page about the company pension scheme in Germany, including its benefits and how it works.

Our latest company pension videos

In our YouTube playlist on the German Company pension, we go into the details of the Company pension and tell you how it works and what you need to know. We cover many topics to help you find your way around the German pension system.

Our latest company pension blog posts

In our blog, we provide comprehensive information on the German company pension. We report on current events, misunderstandings, and changes in the field of company pension and keep you up to date.

How to save for retirement
How to save for retirement in Germany – Helpful guide

The German public pension seems to be completely sufficient. However, this is not the case. That's why we describe for you in this article how you can best secure yourself for retirement and how to save for retirement in Germany.

Our latest company pension blog posts

In our blog, we provide comprehensive information on the German company pension. We report on current events, misunderstandings, and changes in the field of company pension and keep you up to date.

Calculate your possible income with a company pension

With our calculators, you can easily see what your future pension in Germany looks like. Therefore, you can calculate your individual retirement income including a calculation for the company pension.

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Retirement Income Calculator

Calculate your NET retirement income from various public & private sources.

Calculate your possible income with a company pension

With our calculators, you can easily see what your future pension in Germany looks like. Therefore, you can calculate your individual retirement income including a calculation for the company pension.

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Retirement Income Calculator

Calculate your NET retirement income from various public & private sources.

The payments of the state pension will not be sufficient to cover your financial needs and ensure your living standard in retirement. So let’s find out together how to increase your pension in Germany.

Private Pension

Level 3 private pension in Germany is a valuable retirement savings option that can offer significant benefits, including tax advantages in the payout phase and a guaranteed income in retirement.

The private pension is the most flexible of all the supplementary pension options in Germany. Here you can choose between a monthly pension, a lump sum payment, or a mixture of both. In addition, you can use the private pension as collateral for a real estate investment (either investment or self-use).

On our page on the level 3 private pension you can find out everything that is important, the various advantages and disadvantages, and why it is the most popular choice for expats in Germany.

Our latest private pension videos

In our YouTube playlist on the German private pension, we go into the details of the private pension and tell you how it works and what you need to know. We cover many topics to help you find your way around the German pension system.

Our latest private pension blog posts

In our blog, we provide comprehensive information on the German private pension. We report on current events, misunderstandings, and changes in the field of private pension and keep you up to date.

Our latest private pension blog posts

In our blog, we provide comprehensive information on the German private pension. We report on current events, misunderstandings, and changes in the field of private pension and keep you up to date.

Calculate Your Possible Income With A Private Pension​

With our calculators, you can easily see what your future pension in Germany looks like. Therefore, you can calculate your individual retirement income including a calculation for the private pension.

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Retirement Income Calculator

Calculate your NET retirement income from various public & private sources.

Calculate Your Possible Income With A Private Pension​

With our calculators, you can easily see what your future pension in Germany looks like. Therefore, you can calculate your individual retirement income including a calculation for the private pension.

Pension Age Calculator

Calculate your costs of early retirement or your benefit of later retirement.

Retirement Income Calculator

Calculate your NET retirement income from various public & private sources.

Even the German government recommends actively saving extra for your pension. How can you best invest your money for this? Let’s find out together in a free meeting with our pension experts.

FAQ about pension in Germany

Which is the best pension plan?

There is no best pension plan in Germany. Instead, pension plan selection should be based on how you see your life in the future in order to find the best possible plan for your individual situation. Our recommendation is to discuss your situation with an expert and select the right pension plan based on that.

How much will my pension be taxed?

Basically, if you retire in 2022, 82% of your pension will be taxed. For every year you retire later, 1% is added. So, for example, if you retire in 2030, you will have to pay tax on 90% of your pension. From the year 2040, 100% of your pension will be taxed. However, it is important to note that this taxation is only applied to pension benefits above the basic tax allowance, which (as of 2022) is €10,347 (€20,694 for married couples).

Which is the best pension fund?

Unfortunately, there is no one best pension fund. Each pension fund is individual and includes different terms and conditions, which may mean that it does not fit your selection criteria. Our recommendation is that you don’t look for the “apparent” best pension fund, but rather discuss your future/upcoming pension situation with a financial advisor to build a solid plan for your retirement.

How many years do you have to work in Germany to get a pension?

You must have paid into the governmental pension insurance in Germany for at least 5 years to be entitled to a pension in Germany. Once this has been done, you will receive your pension at the official retirement age.

How does pension work in Germany?

In Germany, as an employee, the pension contribution of 18.6% of your gross salary is automatically deducted. If you have paid into the German pension fund for at least 5 years, you will receive a pension based on pension points when you reach the official retirement age. The average amount is 856,05€ for women and 1203,53€ for men (in 2021). This is why the German Pension Insurance recommends saving for retirement, for example, with a private pension.

What age will I get my pension?

The official retirement age in Germany starts at the age of 67. The earliest possible retirement age in Germany is 62. However, this is only the case if you have paid 60 months into the government pension fund. This also applies to the base pension. With pension level 2 and 3, you can retire earlier, but then the tax benefits you will receive at retirement age will be lost.

Get In Touch With Us

Would you like to learn more about pensions in Germany or do you need help building up your retirement provision? Please feel free to send us a message and we will answer your questions as fast as possible.