The German state pension replaces around 48 percent of the average wage in 2026, net before tax. Whoever wants 80 percent of their last net income has to close the difference themselves. How to calculate your gap in four steps and which savings rate closes it.
In short
- Read your pension statement: the line for the regular old-age pension at today’s contributions is the starting point, minus 10 percent health and care contributions, minus tax.
- Need: 70 to 80 percent of today’s net, adjusted for 2 percent inflation a year until retirement.
- Gap × 12 × 25 years gives the capital needed; with a 4 percent withdrawal around 300 times the monthly gap.
- Savings rate: a €500 gap with 30 years and 6 percent needs around €180 a month.
Step one: the state pension
The annual pension statement (Renteninformation) from the German pension insurance names three figures. The middle one matters: the pension if current contributions continue, without pension adjustments. It is gross. Around 11 percent go for health and care insurance, plus tax: whoever retires in 2040 or later taxes the pension in full; at €1,800 gross alone that is around €80 depending on the basic allowance. €1,800 becomes around €1,520 net.
Step two: the need
In retirement social contributions, job costs, savings and often the mortgage fall away. Health, time and travel come in. The rule of thumb is 70 to 80 percent of the last net income. At €3,000 net that is €2,100 to €2,400 in today’s purchasing power. By retirement in 30 years prices rise 80 percent at two percent inflation; the pension is adjusted, but usually below wage growth. Whoever calculates in today’s euros must raise the savings rate later with income.
Step three: the gap
€2,300 of need minus €1,520 of net pension gives a gap of €780 a month, €9,360 a year. For 25 years of retirement that is €234,000, without returns in the withdrawal phase. With a withdrawal of four percent a year, which carries the capital over 30 years at moderate returns, you need around 300 times the monthly gap, so €234,000. Both routes land in a similar range.
Step four: the savings rate
€234,000 in 30 years at 6 percent return before tax needs around €240 a month, in 20 years €510, in 10 years €1,430. At 4 percent return correspondingly more. Time is the biggest lever: whoever starts at 30 pays in half of what someone starting at 40 does for the same result. The pension gap calculator runs this with your figures, including company pension and existing wealth.
What shrinks the gap
A company pension with a 15 percent employer subsidy, voluntary extra payments into the state pension to offset deductions from age 50, a paid-off home that lowers housing costs, a later retirement with a 0.5 percent bonus per month, a part-time job in the first retirement years. And a partner with their own pension, because two pensions carry a household more cheaply than one.
What widens the gap
Part-time and parental leave without compensation, self-employment without provision, early retirement with a 0.3 percent deduction per month, divorce with pension splitting, and the assumption that the state pension keeps rising as today. The pension level is secured at 48 percent until 2031; after that politics decides.
Try it yourself
Pension Gap CalculatorAge, net income, expected pension: how big your gap is and which savings rate closes it.ETF Savings Plan CalculatorContribution, return, term: how your savings plan develops over the years, with a chart and compound interest.Frequently asked questions
When do I get the pension statement?
Annually from age 27 after five contribution years by post, any time online via the German pension insurance with ID card login.
How secure is the state pension?
It is paid as long as there are contributors, so secure. Its level relative to wages tends to fall; the 48 percent are guaranteed until 2031.
Should I pay voluntarily into the state pension?
From 50 you can offset deductions for an earlier retirement. The return is around 2 to 3 percent plus inflation protection and survivor benefits; sensible as a safe building block, not as the only one.
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