Around 40% German pensioners receive a pension of between €741 and €1,250 per month, depending on their gender and the federal state. And this is before deductions for health insurance, long-term care insurance and income tax.
If you are not enrolled in the compulsory state pension scheme, or if you realise that state pension payments will not be sufficient, we recommend that you consider the Rürup-Rente (Basis-Rente) private pension scheme. This is a favourable option for securing your future, especially if you do not have much time left to build up a comfortable pension.
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What is Rürup-Rente, and where did it come from?
With each passing year, the population of Germany is getting older. While 20 years ago the contributions of four working people supported one pensioner, today this burden has almost doubled. Therefore, the retirement age is being increased. Inflation also has a negative impact on the actual value of pension payments. For example, because of inflation, income tax is increasing, which pensioners must pay to the treasury.
That is why it is so important to take care of your standard and quality of life after retirement in advance. This is especially true for those who moved to Germany at the age of over 35 and will not be able to build up sufficient contribution years for a comfortable life. One of the ways to protect your savings from inflation and secure a decent pension for yourself is private pension insurance Basis Rente, also known as Rürup Rente.
Structure of the German pension system
The Rürup Rente is named after its creator, the economist Bert Rürup, who designed the pension scheme. A new state-subsidised form of private supplementary pension insurance was introduced in Germany in 2005.
The Rürup-Rente scheme was originally designed for freelancers and the self-employed who do not receive a statutory pension. But now private pension insurance of interest to all residents Germany, who pay tax.
From 1 January 2027, the self-employed will have a second state-supported scheme — state-subsidised pension deposit. Rürup works via tax relief, the deposit via a direct top-up to the account; you can combine them.
Advantages and disadvantages of the Rürup-Rente
Below we have highlighted the pros and cons of the Rürup Rente. However, all the disadvantages are rather just features of this particular system, as from the point of view of pension accumulation, everything makes sense.
- Suitable for everyone, including the self-employed and entrepreneurs
- You choose the amount you want to contribute yourself, starting from €25/month.
- Tax relief: RR contributions reduce your taxable income
- Financial flexibility: insurance premiums can be reduced, increased or suspended
- The accumulated pension is lifelong, and payments can begin as early as 62 years of age
- High reliability, regulated by the state
- You can arrange both traditional and investment contributions to various funds
- There is the option to arrange for survivors' benefits to be paid to a spouse or children
- In the event of debt or bankruptcy, Rürup savings are protected from seizure
- Designed for long-term investment — you cannot terminate the contract or claim a refund before retirement
- You can only receive payments after retirement.
- You can only receive your savings in the form of a monthly pension
- The returns are lower than those of high-risk investment schemes
Who is the Rürup pension suitable for?
Today there are more opportunities for planning your pension than ever before. The main thing is to actively look for solutions that support your financial goals and guarantee security in the future. For certain groups of people, the Rürup pension will be a particularly good choice.
Self-employed people and freelancers
Traditional pension schemes often fail to provide adequate protection for self-employed professionals. This is particularly true for those who work in Germany but are not required to pay pension contributions.
Young entrepreneurs
There are also a number of opportunities for young professionals and startup founders. Some companies have developed tariffs with reduced initial contributions and full disability cover right from the start of their careers.
High earners
Some companies offer bespoke plans that help to optimise cash flow and secure a stable income upon retirement. This is ideal for those looking to bridge the gap between their current earnings and future pension.
Tax reliefs
According to Section 10a of the EStG, contributions paid into the Rürup-Rente scheme are deductible from taxable income, which reduces the debt burden. Tax relief is therefore the main advantage of Rürup-Rente.
In 2026 you can deduct 100 % of your contributions, but no more than 30 826 € for single people and 61 652 € for married couples. The ceiling is tied to the maximum contribution to the miners' pension insurance and is recalculated every year (§ 10 Abs. 3 EStG). These contributions count as special expenses (Sonderausgaben) when taxable income is calculated.
In other words, rather than simply paying tax in Germany, you can set up a Rürup-Rente agreement and build up a pension, whilst at the same time receiving a refund of part of your tax payments.
The Rürup-Rente uses deferred taxation, the nachgelagertes Besteuerungsprinzip. This means the base on which tax is charged is reduced. Contributions to the Rürup-Rente are not taxed, which saves 30 to 35 % in tax depending on the size of the contributions. And when the pension is paid out, only part of it is taxable. For those retiring in 2026 that share is 84 % of the total pension payments. The remaining 16 % is a lifelong tax allowance (Rentenfreibetrag): it is calculated once, in the first full year of receiving the pension, and does not change afterwards.
Mrs Mikhailova receives Rürup-Rente €1,200/month. (€14,400 per year) and a state pension (gesetzliche Rente) of €700/month (€8,400/year).
Total annual pension amount: €14,400 + €8,400 = €22,800.
Frau Mikhailova retired in 2026, so 84 % of the payments are taxable.
Let's calculate the taxable base:
1. Rürup-Rente
14 400 × 84 % = 12 096 €
Tax-free allowance: 2 304 €
2. State pension
8 400 × 84 % = 7 056 €
Tax-free allowance: 1 344 €
3. Total taxable income
12 096 € + 7 056 € = 19 152 €
Frau Mikhailova's lifelong Rentenfreibetrag is €3,648 a year (2,304 + 1,344). It has already been deducted from the €19,152, is calculated once in the first full year of receiving the pension and does not change afterwards. It must not be deducted a second time, which is the most common mistake in such calculations.
Next comes the Grundfreibetrag: in 2026 it is 12 348 € per person. So the amount subject to tax is 19 152 − 12 348 = 6 804 €, and at this point on the progression curve (principle of progression) the rate starts at 14 %.
The final tax bill will be lower: a flat expense allowance of €102, a flat special-expenses allowance of €36 and contributions to health and long-term care insurance are also deducted from taxable income. The exact figure is worked out in the tax return; this example shows the mechanics, not a calculation of your own tax.
Since 2005, the tax burden on Rürup-Rente has been gradually increasing. From 2058 onwards, 100% of your pension will be subject to tax. You should bear this in mind if you plan to retire later than the standard retirement age.
Read about the difference in the retirement age in this article.
Which Rürup-Rente model is best to choose?
There are two contract options for the Rürup pension: the classical and the fund-based.
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Criterion
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Classic Rürup-Rente
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Stock Rürup-Rente
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Savings mechanism
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guaranteed fixed payments
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investments in investment funds (shares, bonds)
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Yield
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low, 0.5% per annum (depending on the insurer)
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potentially high — up to 6% in the long term, but with risks
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Risks
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almost none
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It depends on the market
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Flexibility
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No, the conditions are fixed
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ability to choose funds
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Tax reliefs
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yes, contributions of up to €30,826 can be deducted
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yes, contributions of up to €30,826 can be deducted
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Old-age benefits
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fixed lifetime pension
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depend on accumulated capital
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The classic option is more suited to those who want stability. The equity-linked one is for those who are willing to take a risk for a higher pension. When choosing a contract, we recommend consulting a specialist.
If you need help choosing an insurance policy, write to us in the form below, and we will answer your questions.
Leaders in private pension insurance
In Germany, there are numerous offers for private pension schemes. These large and respected companies are known for their reliability and long-term success in the field of pension provision. Their products offer a wide range of investment opportunities and a tailored approach to clients.
These companies have also earned customers' trust thanks to their resilience, transparent tariffs and the ability to tailor individual solutions for building up a private pension.
Allianz invests globally in broadly diversified assets with a focus on alternative investments, such as renewable energy sources. It thus offers an attractive combination of potential return and security, with the option to choose the level of guarantee.
Old Leipzig is a story of long-term success and stability. The company is customer-focused and offers a wide range of investment opportunities to suit various investment strategies.
WWK — a German insurance company with a history spanning over 130 years. It takes a conservative approach to investments. WWK's stable pension plans are suited to clients who value reliability.
Nürnberger Insurance — one of Germany’s oldest insurance groups, offering flexible Rürup tariffs as well as individual savings programmes with tax optimisation options.
Stuttgart Life Insurance — specialises in modern pension solutions with flexible capital management and the option to combine guarantees with investment returns.
You can build your own portfolio and make changes at any time, taking into account risk and expected return. Alternatively, you can entrust the management of your investments to professionals. This ensures flexibility and a personalised approach to managing your pension savings, as well as giving clients confidence in achieving their financial goals in retirement.
Frequently asked questions
What is a Rürup pension?
Rürup-Rente is a pension scheme introduced by the German government in 2005 with the aim of helping people to build up their pension savings.
In terms of its features, the Rürup-Rente scheme is equivalent to the state pension. This scheme has become a valuable tool for those seeking to ensure financial stability in retirement. It offers additional opportunities to increase pension savings and reduce tax liabilities.
What is the difference between Rürup and Riester pensions?
Rürup pension — private pension tax-advantaged provision. Contributions paid into this scheme can be deducted from taxable income, which reduces the tax burden. Suitable for the self-employed and high earners.
Riester pension — a scheme in which contributions are state-subsidised and offset against tax. Riester-Rente beneficial for low-income people and families with children.
How is a Rürup pension taxed?
Like the state pension, the Rürup pension is taxable. Until 2058 a transitional rule applies under which only part of the pension is taxed. If the pension starts in 2026, only 84 % of the payment is subject to income tax. That means that out of a pension of 1 000 € should be subject to tax 840 €.
Is it possible to get a refund of contributions previously paid into Rürup-Rente and terminate the contract?
No, it is not possible to receive the amount of contributions in any other way than through monthly pension payments for the rest of your life. A lump-sum payment is also not possible. However, you can suspend contributions by putting payments on hold.
From what age can you start receiving a Rürup pension?
It depends on the company with which the contract is concluded. Most often, you can start receiving your pension after the age of 62 (the official retirement age in Germany is 67 if you were born after 1964).
Can you take out a Rürup pension if one of the spouses does not pay tax?
If you do not pay taxes, it is impossible to deduct Rürup pension contributions. However, such insurance can be attractive for families where one spouse works and pays taxes while the other is a homemaker. In this case, the family can deduct the contributions from the working spouse's taxes, and the non-working spouse will gain an additional private pension.
For those who do not contribute to the state pension fund, this is a good alternative to the state pension. It is important that at least one spouse has taxable income, otherwise the tax benefits of the Rürup pension will not be available.
Are contributions under Rürup-Rente sufficient for a permanent residence permit in Germany (Niederlassungserlaubnis)?
Yes, contributions to Rürup-Rente can be used as evidence of financial stability when applying for a permanent residence permit in Germany (Niederlassungserlaubnis). However, for this to apply, the contributions must have been paid for a period of 60 months.
Who is eligible to apply for Rürup-Rente?
Individuals who are resident in Germany and pay tax in this country are eligible to take part in the programme.
The Rürup-Rente scheme is recommended for the self-employed, freelancers, small business owners and private consultants. All German citizens and residents are also eligible to join this pension scheme.
What are the advantages of the Rürup-Rente scheme compared with other pension schemes?
Contributions to Rürup-Rente are tax-deductible when filing your tax return. Furthermore, Rürup-Rente provides a guaranteed lifetime income, which may be particularly important for those seeking stability in their retirement income.
How do I apply for a Rürup-Rente visa for foreign nationals?
Rürup-Rente is available to foreign nationals provided the following conditions are met:
- Residence permit (Aufenthaltstitel) or permanent settlement permit (Niederlassungserlaubnis)
- Social insurance — even without statutory pension insurance (gesetzliche Rentenversicherung)
To complete form Rürup-Rente, you will need your pension insurance number.
How to get a pension insurance number in Germany?
National Insurance number (Rentenversicherungsnummer) is issued by the Deutsche Rentenversicherung. This happens automatically upon taking up your first job via your employer. Alternatively, you can submit a request to German statutory pension insurance scheme.
Pension scheme Rürup-Rente
In this video, we’ll explain who the Rürup-Rente programme is suitable for, and discuss its pros and cons.
Do you need advice?
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