How much to invest for retirement in Germany?
With German taxes and the state pension
Your numbers
State pension gesetzliche RenteState pension ≈ €1,607 a month after deductions35 years, €70,000 a year · change
State pension per month
| Gross | €2,006 |
| Krankenversicherung 8.75 % | −€175 |
| Pflegeversicherung 3.6 % | −€72 |
| Income tax ≈ | −€151 |
| Net | €1,607 |
47.2 Entgeltpunkte × €42.52
Besteuerungsanteil for a pension starting in 2058: 100%. Income tax is estimated for a single person with no other income; for a married couple filing jointly it is usually lower. We assume the pension keeps its value in today's euros.
Taxes+€64 a month · Vorabpauschale, FIFO and Sparerpauschbetrag included
Advanced
The state pension covers €1,607 of your €2,500 a month
To cover the rest, invest
€375per month
and raise it with inflation every year: €805 in the last year before retirement, the same €375 in today's money
Without taxes €311 · taxes +€64 per month
Start in 5 years and it's €463 a month: €88 more, for 27 years
The link doesn't include your salary, savings or tax settings
60/40 fund, 4.5% · inflation 2.5% · with taxes · how it's calculated
What's up to you
When you start
in today's money| now | €375 |
| in 1 year | €390 · +€15 |
| in 3 years | €424 · +€49 |
| in 5 years | €463 · +€88 |
Where you invest
The higher the average return, the deeper the temporary drops. Equities make sense with 10–15+ years to go — and only if you don't sell in a crash.
How to start investing — on my Substack →Portfolio over time
- Portfolio
- Paid in (dashed)
- Needed at retirement
Your portfolio grows to €493,497 by age 67, then you spend it down to zero by age 90.
Tax rules may change.
Calculation details
How the target is reached
| needed by age 67 | €493,497 €223,934 in today's money |
| your money (contributions + already invested) | €236,456 |
| investment growth | €257,041 |
Your €20,000 alone grow to €81,684
Lifetime taxes
Investment income €578,191, of which taxes €92,511 (16.0%)
- Your money
- €236,456 29 %
- Income after tax
- €485,680 60 %
- Taxes
- €92,511 11 %
| Before retirement (Vorabpauschale) | €15,601 |
| In retirement (sales + Vorabpauschale) | €76,911 |
| Total | €92,511 |
How it's calculated
- Without taxes: spending is converted into future euros: each retirement year it grows with inflation.
- Capital needed is the sum of all future yearly spending, discounted at the return: money waiting its turn keeps growing.
- Your current capital grows at the return until retirement.
- Monthly contributions at the start of each month close the gap, at the monthly rate (1 + r)^(1/12) − 1.
- When you start: the same calculation with taxes if you start in 1, 3 or 5 years. With a growing contribution, amounts are shown in today's money.
- Taxes are simulated year by year. Each contribution is its own lot. Vorabpauschale = the smaller of (price on 1 January × Basiszins × 0.7) and the year's gain; units bought during the year count pro rata by month.
- Taxable is the Vorabpauschale minus Teilfreistellung, above the yearly Sparerpauschbetrag, at Abgeltungsteuer incl. Soli (and Kirchensteuer).
- For savings, all growth is taxed every year, without Teilfreistellung.
- In retirement the oldest units are sold first (FIFO). Gain = sale price − purchase price − all Vorabpauschalen during the holding period, including those covered by the Sparerpauschbetrag. We sell enough that the needed amount remains after tax.
- The with-tax contribution is the smallest one that lasts until the final year.
Assumptions: A steady 4.5% return every year, 2.5% inflation. Contributions at the start of each month, withdrawals at the start of each year. Taxes: 60/40 fund, Sparerpauschbetrag €1,000, Kirchensteuer none, Basiszins 3.2% held constant. Abgeltungsteuer incl. Soli 26.375%. Vorabpauschale before retirement is taken from the portfolio on 2 January; in retirement units are sold FIFO at the start of each year.
Educational calculation, not investment advice. Everything is calculated in your browser. We don't store your inputs. Impressum · Datenschutz