Retirement planning
For most people the state pension covers only part of what they will spend in old age. You can work out the gap in three steps, and the earlier you start, the smaller the monthly amount that closes it.
Retirement planning sounds like a topic for later. Mathematically it is a topic for now, because the time until retirement is the strongest help you have. What matters most is knowing how much you will be missing later. This page describes the system in Germany. If you are insured elsewhere, your national pension authority has the equivalent information.
Step 1: read your pension statement
The German statutory pension insurance (Deutsche Rentenversicherung) automatically sends a pension statement every year to everyone insured who is at least 27 and has paid contributions for at least five years. Among other things it contains a projection of your standard retirement pension, assuming you keep paying in as you did over the last five years. From age 55 it is replaced every three years by a more detailed pension report.
The amount shown is a gross figure. Taxes and health and long term care insurance contributions are usually deducted from the later pension. So expect a little less.
Step 2: see all entitlements in one place
Since 30 June 2023 there has been a free digital pension overview at rentenuebersicht.de. It shows statutory, workplace and private entitlements together. To register you need an ID card with the online function activated and your tax ID.
Step 3: work out the gap
Think about how much you will spend per month in old age, in today’s money. Subtract what your pension statement and the overview add up to. What is left is your gap.
An example: Lea is 30 and expects to spend €2,400 a month in retirement. Her entitlements add up to about €1,500. So about €900 a month is missing. According to the financial independence calculator, at a cautious withdrawal rate of 3.5 percent she needs about €308,600 for that. She has 37 years until 67. Assuming a 5 percent return after inflation, about €240 a month is enough. If she starts ten years later, the monthly amount gets much bigger.
Three routes that complement each other
- State: The statutory pension is the foundation. Its level is fixed by law at 48 percent up to and including 2031. What exactly that means is explained under Go deeper.
- Workplace: With salary conversion you pay part of your gross salary into a workplace pension. If your employer saves social security contributions as a result, it must add 15 percent of the converted amount for direct insurance, pension funds and pension schemes of the Pensionskasse type.
- Private: A broadly diversified ETF savings plan that you run yourself. From January 2027 there will also be the state subsidized retirement account (Altersvorsorgedepot), which replaces the Riester pension for new contracts.
Which route pays off depends on costs, subsidies and your situation. Don’t pay into a contract you don’t understand, and don’t let anyone rush you into signing.
What a pension level of 48 percent means
The pension level describes the ratio of a standard pension after 45 years of contributions on average earnings to the average earnings of all insured people. It does not mean you will get 48 percent of your last salary. Anyone with fewer years or below average earnings ends up below that. The Bundestag passed the pension package with the 48 percent floor up to and including 2031 in December 2025. Without that rule, the pension insurance had projected about 47 percent by 2031.
The new retirement account from 2027
The Bundesrat approved the retirement provision reform act on 8 May 2026. New products will be available from January 2027. According to the consumer advice center (Verbraucherzentrale, as of July 2026), new contracts get:
- Basic subsidy: 50 percent on contributions up to €360 a year and 25 percent on further contributions up to €1,440. That is at most €540 in subsidies a year.
- Child subsidy: 100 percent on up to €300 of contributions per child and year.
- A one off €200 bonus for savers under 25. The minimum contribution is €120 a year.
- For the standard account, total costs are capped at 1.0 percent a year. It has no guarantee. Other contracts may offer one.
- Instead of a lifelong annuity, a payout plan up to age 85 or 95 is possible.
- Returns are not taxed during the saving phase, but the later payouts are.
- Existing Riester contracts continue and can either keep their current terms or be moved into the new system later.
The consumer advice center expects a wave of sales calls toward the end of the year. Its advice: don’t sign under pressure, avoid commission based offers, watch for clauses that let providers raise costs later, and if in doubt wait for the state standard product and compare. An unsubsidized ETF account can sometimes be the better choice, for example because you can access the money at any time.
Look at workplace pensions soberly
The mandatory 15 percent employer contribution only applies to the part on which your employer actually saves social security contributions, and not to direct pension promises or support funds. In retirement, workplace pensions are usually subject to tax and health insurance contributions, and contract costs eat into the return. Ask about costs, about the employer contribution and about what happens to the contract if you change jobs.
What the calculation above cannot do
The example works in today’s money with a steady return. Real markets swing, and bad years shortly before or after retirement weigh heavily. That is why it pays to gradually shift more into safe investments from about ten years before retirement. How long a portfolio lasts with regular withdrawals is shown by the withdrawal plan calculator.
As of
Pension law changes often, and some details of the new retirement account are still to be set by regulation. The sources were read on 21 October 2026. Check the current state before you decide. This page applies to Germany.
Summary
- The pension statement arrives every year from age 27 and five years of contributions, and shows a gross amount.
- The digital pension overview shows statutory, workplace and private entitlements in one place.
- Your gap is what you will spend in old age minus what your pensions add up to.
- From 2027 the subsidized retirement account replaces the Riester pension for new contracts.
- The earlier you start, the smaller the monthly amount that closes your gap.
Did you get it?
When do I get a pension statement in Germany?
From age 27, once you have paid contributions for at least five years. It then arrives automatically every year, and from 55 every three years as a more detailed pension report.
Does a pension level of 48 percent mean I get 48 percent of my salary?
No. The pension level compares a standard pension after 45 years on average earnings with average earnings. Your own pension depends on your years of contributions and your earnings.
How large is the subsidy in the new retirement account?
From 2027 there is a 50 percent subsidy on contributions up to €360 and 25 percent on further contributions up to €1,440 a year, at most €540 in total. On top of that comes up to €300 per child.
Sources and further reading
- Deutsche Rentenversicherung Baden-Württemberg, what the pension statement shows (April 2025, in German). View source ↗
- Deutsche Rentenversicherung, digital pension overview (March 2026, in German). View source ↗
- ZDFheute, pension package: costs and pension level (in German). View source ↗
- Deutsche Rentenversicherung, Bundesrat approves reform of private pensions (May 2026, in German). View source ↗
- Verbraucherzentrale, the new retirement account: opportunity or costly sales trap? (July 2026, in German). View source ↗
- Deutsche Rentenversicherung, glossary: employer contribution for salary conversion (in German). View source ↗
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