Retirement provision

Retirement provision covers all measures that secure your income in retirement. In Germany it is based on the 3-tier model.

Tier 1: basic provision (mandatory)

• Statutory pension insurance: mandatory for employees. Contribution: 18.6% (9.3% each employer/employee)
• Rürup pension: for the self-employed, fully tax-deductible
• Civil servants' pensions: paid from tax revenue

Tier 2: subsidised supplementary provision

• Company pension scheme (bAV): via the employer, with a mandatory 15% contribution
• Riester pension: will be replaced by the retirement savings depot in 2027
• Retirement savings depot (from 2027): new state-subsidised ETF account

Tier 3: private provision (flexible)

• ETF savings plan: the most flexible and often highest-return option
• Property: living rent-free in old age
• Life insurance: classic, but low returns

The problem:

• The statutory pension covers only approx. 48% of your last income
• The typical pension gap: €500–1,500/month
• Anyone who relies ONLY on the statutory pension will have significantly less in old age

Recommended order:

1. Take the employer contribution to the company pension (free money!)
2. ETF savings plan for flexibility
3. If appropriate, retirement savings depot (from 2027) for the state subsidy