What your savings could become

From 1 January 2027 the state subsidises the new retirement savings account with allowances. For every euro you pay in yourself, it adds 50 cents up to an own contribution of €360 a year. For every further euro up to €1,800 a year it adds 25 cents. If you save €30 a month, you therefore get €180 a year. At €150 a month it is €540, and there is no higher basic allowance.

For each child, up to €300 a year is added. The full child allowance is already available from a contribution of €25 a month. If you sign the contract before your 25th birthday, you also get a one-off €200 career starter bonus.

You can pay in up to €6,840 a year. Anything above €1,800 grows just the same but receives no allowance. Those who earn more can also declare the contributions in their tax return. The tax office then checks whether this gives a tax advantage beyond the allowance. The calculator does not include this tax advantage because it depends on income and plays no role for most young people.

The basis is the Retirement Savings Reform Act (Altersvorsorgereformgesetz). The Bundestag passed it on 27 March 2026, and the Bundesrat approved it on 8 May 2026.

The allowance goes to people who are compulsorily insured in the statutory pension insurance, plus civil servants and, from 2027, the self-employed. For young people it currently looks like this:

If you are not entitled today, you can become entitled later. The allowance is paid for every year in which the conditions are met, for example from the start of an apprenticeship.

The return states by how many percent your money grows on average per year. For shares and equity funds it fluctuates strongly. There are years with gains of 20% or more and years with losses of 30% or more. Over long periods many fluctuations even out, but that is not guaranteed.

The calculator therefore starts from an average that you choose yourself and shows two further scenarios: an unfavourable one with 3 percentage points less and a favourable one with 2 percentage points more. The default is 7%. Broadly diversified equity funds, for example on a world index, have earned around 7% per year on average over the long term, nominal and before costs. In individual periods it was much more or much less. This is not guaranteed.

Accounts and funds charge fees every year. They are stated as a percentage of the money invested. One percent sounds small. Over 40 or 50 years, however, a lot adds up, because the fees also shrink the returns that would otherwise have kept growing.

Try it out: set the costs once to 0.2% and once to 1.5% and compare the building block “Of which lost to costs”. For the standard account the law sets an upper limit of 1% per year. For accounts you put together yourself there is no upper limit. Low-cost ETF accounts are often well below 1%.

If prices rise by 2% every year, a purchase that costs €100 today will cost around €270 in 50 years. An amount in the distant future is therefore worth less than it sounds. The calculator converts the result to today’s prices so that you can compare it with your money of today. If you switch “In today’s purchasing power” off, you see the amount that would actually be in the account.

Nobody knows how high inflation will be in the future. The European Central Bank aims for 2%, which is why this value is preset. More about inflation is in module 2.

Payout starts at 65 at the earliest. You can choose between a payout plan, which pays the money out in instalments at least until your 85th birthday, and a lifelong pension from an insurer. At the start of the payout, a lump sum of up to 30% is also possible.

The calculator shows a payout plan from 67 to 85 with equal monthly instalments. The remaining money stays invested and earns 2% per year. You pay tax only in old age. The payouts are taxed at your personal tax rate, which in retirement is usually lower than during working life. The amounts in the calculator are therefore shown before tax.

The money is meant for old age. You can withdraw it earlier but then have to repay the allowances and tax advantages. As things stand, an exception applies to a home you live in yourself, for example when buying or building.

For children, the federal government also plans the early start pension (Frühstart-Rente). Under it, the state pays €10 a month into an account for children from their 6th to their 18th birthday, starting with the 2020 birth cohort. The entitlement can later be transferred to your own retirement savings account, but this does not happen automatically. The law has not yet come into force (as of October 2026). Anyone who is already at secondary school today does not receive the early start pension.

The calculator is a simplified model calculation. It starts from these assumptions:

• You pay in the same amount every month. The money earns the chosen return minus costs every month.
• The allowance is credited at the end of each saving year. In reality it only arrives in the following year.
• The child allowance is paid for 18 years, the career starter bonus once in the first year if you are under 25.
• Return, costs and inflation stay the same over the whole period. In reality they fluctuate from year to year.
• The payout runs from 67 to 85, and the remaining capital earns 2% per year.
• Taxes and a possible tax advantage from the tax return are not included.
• Your entries are not saved and not transmitted.