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GERMANY'S PENSION PROBLEM

Germany has a pension problem.

But what matters is what it means for your own retirement.

Germany's statutory pension system is under growing demographic pressure: fewer people of working age have to support a growing number of retirees.

For you, the important question is not only what happens to the pension system. It is how much retirement income you may personally need to build beyond your statutory pension.

Calculate my pension gapUnderstand the problem

Key figures of the statutory pension

21,49 Mio.

Pensioners excluding orphan pensions (1 July 2025)

18,6 %

Contribution rate (2026)

What does this mean for you?

The bigger question is not only how Germany will finance its pension system in the future.

It is how much retirement income you may personally have available, and whether that could leave a gap compared with the income you want.

DESIRED RETIREMENT INCOME

€3,000 / month

−

EXPECTED STATUTORY PENSION

€2,050 / month

=

POSSIBLE PENSION GAP

€950 / month

Calculate my pension gap

Illustrative example, not a personal calculation.

01 — System

How does the statutory pension work?

The statutory pension insurance works essentially on a pay-as-you-go basis. A large part of the current income is used to finance current pension payments. In addition, extensive tax revenues flow into the system as federal subsidies.

This system depends, among other things, on how the number of contributors, employment, wages, and the number of pensioners develop.

How the pay-as-you-go system works · 2026

1

Money enters the pension system

Employees and employers pay contributions. The federal government adds money from taxes.

2

The pension insurance system pools the money

The statutory pension insurance system manages the current income.

3

It pays today’s pensions

The money received today mainly finances the pensions being paid today.

Important: your contributions are not fully saved for your own future pension.

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LONG-TERM VIEW 1957–2022 · 2026 MODEL VALUE

How many contributors mathematically correspond to one pensioner?

The historical time series shows the development through 2022. The current BMAS model value for 2026 is highlighted separately; it uses standardized equivalents and is not a measured headcount of actual employees.

Actual values 2004–2024Model calculation 2025–2039

Equivalent contributors per equivalent pensioner

Definition, calculation and rounding

Equivalent contributors: contributions from employees subject to compulsory insurance, marginal employees and unemployment-benefit recipients, divided by the contribution due on average earnings. Equivalent pensioners: total pension volume divided by a standard old-age pension based on 45 earnings points.

Chart calculation: equivalent contributors ÷ equivalent pensioners; this is the inverse of the official pensioner ratio under section 68(4) SGB VI.

Calculated from the published values in thousands and rounded to two decimal places using standard rounding.

Sources and data status

Actual 2004–2024: German Pension Insurance, “Rentenversicherung in Zeitreihen 2025”, p. 268 (pension-adjustment base values; published October 2025). Open primary source

2025–2039: Federal Ministry of Labour and Social Affairs, “Rentenversicherungsbericht 2025”, table B 3.5, p. 61 (medium wage and employment scenario; report dated November 2025). Open primary source

Values from 2025 are model-based advance calculations, not forecasts. The chart marks the transition with a dashed separator.

02 — Data

Why is the system under pressure?

21.49 Mio.

Pensioners

1.87

Contributors per pensioner · 2026 model

Source: BMAS, table B 3.5
18.6 %

Contribution rate (2026)

360.1 Bn €

Pension expenditure (2024)

LONG-TERM VIEW 1957–2022 · 2026 MODEL VALUE

How many contributors mathematically correspond to one pensioner?

The historical time series shows the development through 2022. The current BMAS model value for 2026 is highlighted separately; it uses standardized equivalents and is not a measured headcount of actual employees.

Current model value

1.87

2026 · model calculation

Source: BMAS

Historical actual value 2022: 2.17

Equivalent contributors: contributions from employees subject to compulsory insurance, marginal employees and unemployment-benefit recipients, divided by the contribution due on average earnings. Equivalent pensioners: total pension volume divided by a standard old-age pension based on 45 earnings points.

Source: Destatis
Details and sources in the data lab →

Germany's pension problem is important.

But what matters is yours.

The crucial question is not just how the pension system develops. But how your expected provision fits the life you want to lead in retirement.

!

DESIRED RETIREMENT INCOME − EXPECTED PROVISION

YOUR PENSION STATEMENT

What do the values in your pension statement mean?

The pension statement contains several amounts and technical terms. Click a point to see what it means – and which value matters for the calculator.

Click a value to see the explanation
Anonymized sample pension statement, front page

Anonymized sample pension statement from the supplied PDF. Click the numbered markers in the document.

Selected

4

Future standard old-age pension

The future standard old-age pension is the key planning value for the calculator. It is projected on the assumption that your contributions continue at roughly the average level of the last five calendar years.

For your calculation: Enter this amount from your pension statement as your expected statutory gross pension.

All terms at a glance

These explanations are based on the supplied guide to the German Pension Insurance pension statement. The statement is a projection, not a guarantee.

Calculate my pension gap

03 — Calculator

Pension Gap Calculator

Keep your pension statement nearby. We show you which amount to enter.

Disclaimer

This calculator is for orientation only and intentionally kept simple. Simplified model: retirement at age 67, the personal purchasing-power value from your pension statement and TK contribution rates for 2026 assuming no children (8.645% health insurance and 4.2% long-term care insurance). Income tax and other retirement income are not included. No individual advice.

TK contribution rates for pensioners 2026
Where can I find the correct amount?

Use this amount:
“Künftige Regelaltersrente” – the projected monthly pension assuming continued contributions at the average level of the last five calendar years.

Do not use this amount:
“Bislang erreichte Rentenanwartschaft” – this amount assumes no further contributions before retirement.

The amount in your pension statement is gross. Health and long-term care insurance are deducted in the result.

Under “Kaufkraftverlust”, your pension statement also shows what €100 at retirement would be worth in today’s money. Copy that value into the next field. The examples with 1% and 2% pension adjustments are not guarantees.

Talk to an expert about my pension

From pension problem to personal strategy.

rentenproblem.de helps you understand the problem and assess your personal situation. NEOdirect can support you in analyzing existing provision and comparing different options with each other.

Book a free consultation Learn more about NEOdirect
1

UNDERSTAND SITUATION

2

ASSESS PROVISION

3

IDENTIFY POSSIBLE GAP

4

COMPARE OPTIONS

5

DEVELOP STRATEGY

You now know your possible gap. What can you do with it?

A pension gap does not automatically mean you need a specific product. What matters is what provision is already in place and what combination fits your life, income, and goals.

The next step is therefore not automatically a product – but first a sensible assessment of your personal situation.

04 — Options

What are the options?

STATUTORY PENSION

What claims already exist and how are they developing?

CORPORATE PENSION

What options does your employer offer and what provision results from them?

PRIVATE PENSION

Which long-term provision solutions fit your personal situation?

WEALTH BUILDING / INVESTMENTS

How much flexibility and long-term wealth building do you want in addition?

The right strategy often emerges from a combination – not from a single product.

Calculate my pension gap

FAQ

Frequent questions about the pension problem

The most important questions about the statutory pension, pension gap, and personal retirement provision.

The statutory pension will not simply 'disappear'. However, it faces challenges due to demographic and economic changes. For personal planning, it is therefore primarily decisive what provision you can expect and whether it fits your desired standard of living in retirement.

We refer to official figures from the German Pension Insurance and the federal government. Around 21.5 million pensioners receive benefits, the contribution rate is currently 18.6%, and the system is supported by significant federal subsidies. Details can be found in our data lab.

The age structure of the population is changing. High-birth cohorts are reaching retirement age, while factors such as birth trends, migration, employment rates, and the labor market simultaneously influence financing.

No. Your future pension amount cannot be derived exactly from demographic developments alone. It depends, among other things, on your insurance history, your earning points, the development of the pension value, and future legal frameworks.

Put simply, the pension gap describes the difference between the income you want to achieve in retirement and your expected provision from statutory, corporate, and private retirement provision.

A sensible calculation takes into account your expected statutory pension, existing further retirement provision, and your desired income in retirement. If you already have a pension statement from the German Pension Insurance, it can be an important basis for the calculation.

There is no serious general answer to this. Living situation, family, health insurance, taxes, desired standard of living, travel, and existing wealth can significantly influence personal needs.

Depending on your personal situation, different building blocks are an option – for example, statutory and corporate provision, private retirement provision, and long-term wealth building. Which combination makes sense depends on your individual situation.

rentenproblem.de is an information service from NEOdirect. The goal is to explain developments around the German pension system in an understandable way and to help people better assess the significance for their personal retirement provision.

No. The calculator provides a model calculation or orientation based on your details and the stated assumptions. It does not replace individual financial, insurance, investment, or tax advice.

This depends mainly on your year of birth and the type of pension. The standard retirement age is being raised gradually; for people born in 1964 or later, it is 67. Early retirement may be possible depending on the pension type and eligibility, but it can reduce the pension amount.

Yes. The statutory pension is not paid automatically when you reach retirement age. You should apply several months before the date you want your pension to start. The German Pension Insurance and its advice centres can help with the application.

The amount is based mainly on your earnings points, access factor, current pension value, and pension type factor. Your insurance record, pensionable earnings, and the date you start drawing the pension are important factors.

The pension statement summarises the entitlements you have built up so far and provides a projection of your expected old-age pension. It is generally sent from age 27 onwards after at least five years of contributions. The amounts are gross figures and not a guarantee of the final pension.

Contributions to health and long-term care insurance can be deducted from the gross pension. Whether and how much income tax is due depends on your personal situation and other income. There is therefore no universal net percentage.

In principle, yes. The effects depend among other things on the type of pension, whether you have reached the standard retirement age, your employment income, and your individual tax and insurance situation. For a precise assessment, consult the German Pension Insurance or the tax authorities.

For periods in EU and EEA countries, Switzerland, or countries with a social security agreement, coordination rules may apply. Often, each country pays its own share based on the periods recognised there. The responsible pension institutions can clarify which periods and entitlements count.

The data behind the pension problem

Want to dive deeper? Here you find the verified demographic and financial key figures behind the relationships shown.

IndicatorValueSource / Note
Equivalent contributors per equivalent pensioner1.87BMAS Pension Insurance Report 2025, table B 3.5 (2026 model calculation)
Pensioners excluding orphans’ pensions21.491mDRV key statistics (1 July 2025)
Pensions paid26.208mDRV key statistics (31 December 2025)
Statutory pension insurance contribution rate18.6%DRV contribution-rate reference (2026)
Total pension insurance expenditure€402.77bnDRV Pension Insurance in Figures 2025 (2024 data)
Pension expenditure included€360.14bnDRV Pension Insurance in Figures 2025 (2024 data)
General federal subsidy€56.94bnDRV Pension Insurance in Figures 2025 (2024 data)
Additional federal subsidies to the general pension scheme€30.84bnDRV Pension Insurance in Figures 2025 (2024 data)

Data & Methodology

The data is based on published statistics from official bodies. The illustrative analysis is not individual advice or an investment or insurance offer.

Do you know your pension gap?

Understand what provision you can expect – and how it fits your personal goals in retirement.

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