Retirement provision in Germany: the 3 pillars explained
Statutory pension, workplace pensions and private provision interact — yet a gap often remains. Here's the overview, plus a free calculator for your own situation.
Last reviewed: September 2026
The basics
The 3-pillar model
German retirement provision rests on three independent building blocks.
Statutory pension insurance
The base for most employees, funded on a pay-as-you-go basis. A statutory floor (Haltelinie) keeps the pension level at no less than 48% until 2031 (Rentenpaket 2025) — lower than decades ago.
Workplace pension (bAV)
Employer-organized, often subsidized supplementary provision — e.g. direct insurance or a pension fund. Not every employer offers it at the same quality.
Private retirement provision
Everything you build yourself: an ETF portfolio, property, Riester/Altersvorsorgedepot. This is where you have the most control — and the most responsibility.
The real effect
Why a pension gap often remains anyway
The 48% pension level describes a standard pension after 45 contribution years at average earnings relative to current average earnings, both after social contributions and before tax; it is secured by law until 2031. With fewer contribution years or an above-average salary, your own pension is often well below that relative to your last income — so the statutory pension alone often doesn't reach the standard of living you are used to. The difference between desired income and actual pension is called a pension gap — and can be calculated concretely for your own situation.
Calculate your own pension gapWhat's changing
New from 2027: the Altersvorsorgedepot
Germany's parliament has passed the Riester pension's successor: a subsidized securities account with a cost cap that can be opened from 1 January 2027, for the first time including the self-employed.
All key facts on the AltersvorsorgedepotYour plan
How Planafolio supports your retirement provision
Not investment advice — real numbers from your own portfolio.
Free needs analysis
Enter your age, capital and savings rate — the needs analysis shows whether a gap is looming, already in the free tier.
Statutory pension included
Unlike a plain portfolio tracker, Planafolio factors your expected statutory pension into the plan.
Monte Carlo simulation (Pro)
Instead of a single forecast, the simulation shows 500 possible market paths — a more realistic picture than one fixed return assumption.
Topic overview
Retirement planning step by step
From your needs to withdrawals, every step has its own calculator or guide. Here you can see which one is meant for what.
1. Work out what you need
How much is missing in retirement between the statutory pension and the income you want? The pension gap is where every plan starts.
2. Build your savings
How a monthly savings rate turns into wealth over the years: savings plan and compound interest, lump sum vs. savings plan, the subsidised retirement savings depot and the Frühstart-Rente.
- ETF Savings Plan CalculatorHow much wealth do you build with an ETF savings plan and monthly contribution?
- Compound Interest CalculatorHow much does a lump-sum investment grow through compound interest?
- Lump Sum or Staggered?Invest it all at once or spread it over months — which would have won?
- Retirement Portfolio CalculatorIs your portfolio enough for retirement — and where's the gap?
- Frühstart-Rente CalculatorHow much will Germany's Frühstart-Rente for children grow to by retirement?
3. Purchasing power and taxes
How much purchasing power money has lost in the past and which taxes apply to investment income – both shape how much of your savings is left in real terms.
4. Withdrawals in retirement
How long your wealth lasts with monthly withdrawals and how much capital you need for financial independence.
How the numbers are calculated
The return, inflation and tax assumptions of the retirement calculators are collected on one page.
Sources and calculation basis
What the linked calculators are based on. Laws with their legal status; linked where a verified address is available.
- Assumptions behind all retirement calculators (returns, inflation, Monte Carlo, taxes)
- Section 32a EStG – German income tax schedule, as of 2026 (tax in retirement planning)
- Section 32d EStG – flat tax on capital income (withdrawal phase)
- Section 20(9) EStG – saver's allowance
- Federal Statistical Office (Destatis) – consumer price index (inflation calculator)
- Retirement savings depot and Frühstart-Rente: sources on the retirement depot page
Last reviewed: September 2026
Frequently asked questions
Retirement provision questions
Statutory pension, workplace pension and private provision complement each other — if one pillar falls short, the other two can ideally make up for it. How much each pillar contributes differs from person to person; the private pillar is the part you can influence most yourself.
That depends heavily on your desired standard of living, past salary and statutory pension — there's no blanket figure. The free pension gap calculator works it out for your own situation.
The earlier, the more compound interest contributes to the result — starting a decade earlier at the same savings rate can make a substantial difference in the end.
No. This page and the linked calculators are a general guide with simplified assumptions, not individual financial or pension advice.
Keep track of your own retirement provision
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