---
title: "Calculating the pension gap: what the gesetzliche Rente does not cover"
description: "Calculate the pension gap: how to work out the difference between the gesetzliche Rente and the income you need. With a pension-gap calculator."
canonical: "https://investboard.de/en/wissen/rentenluecke-berechnen"
language: "en"
published: "2026-03-30"
modified: "2026-03-30"
last_verified: "2026-07-27"
author: "David Bartas"
author_url: "https://investboard.de/ueber-uns"
reviewer: "David Bartas"
reviewed: "2026-07-27"
---

# Calculating the pension gap: what the gesetzliche Rente does not cover

Work out your personal provision need realistically

## In short

The pension gap is the difference between your estimated needs in retirement and your expected retirement income; both are estimates. A common anchor for needs is roughly 80% of final net income. The Standardrente (Germany's model state pension) stands at EUR 1,835.55 gross a month (July 2025), a model value. Options for closing it: ETF portfolio, occupational pension, Riester, Rürup.

- Estimate your need first, then set the expected income against it.
- The roughly 80 percent of final net income (for the accustomed standard of living) is a rule of thumb, not a fixed value.
- Inflation over 20 to 30 years lowers purchasing power and belongs in every estimate.

The pension gap is not a number the tax office hands you. It is an estimate you have to make for yourself: the difference between what you will probably need in retirement and what the gesetzliche Rente (Germany state pension) is likely to provide.

Most people meet it late, often only in the final decade before retirement. Yet it is easiest to influence early. This article shows how to put a rough figure on the gap, which assumptions ride along with it, and which building blocks exist to close it.

> The pension gap is rarely a shock. It is a quiet difference, one worth knowing early so as not to feel it late.

## What is the pension gap?

The pension gap describes the distance between two figures: your estimated need in retirement and your expected income in old age. Both are estimates, not fixed values. That is precisely why the gap is not a fate but a planning anchor, one you readjust at regular intervals.

### The basic idea

```text
Pension gap = estimated need − expected retirement income
```

Your expected need covers your ongoing cost of living in retirement: housing, care, insurance, mobility, leisure. Your expected retirement income is made up of the gesetzliche Rente (Germany state pension) and every further building block you put in place, such as a betriebliche Altersvorsorge (Germany occupational pension) or a securities portfolio.

The order matters: first you estimate the need, then you set the expected income against it. What remains is the gap that private provision would have to carry. Both sides shift over the years, with your income, your spending and the statutory framework. The gap is therefore a snapshot, not a final verdict.

## The gesetzliche Rente: what you can expect

For most people the gesetzliche Rente (Germany state pension) forms the base of their retirement income. How high it turns out depends on the pension formula under § 64 SGB VI (the Germany social-security code).

### Pension formula (§ 64 SGB VI)

```text
Monthly pension = Entgeltpunkte × Zugangsfaktor × current Rentenwert × Rentenartfaktor
```

The greatest lever here is your Entgeltpunkte (earnings points): you collect roughly one point per year when your earnings match the average across all insured people. The current Rentenwert (pension value) translates these points into euros. Since 1 July 2025 it has stood at EUR 40.79 per Entgeltpunkt and rises to EUR 42.52 on 1 July 2026. This value is set by policy and changes regularly.

A common reference figure is the so-called Standardrente (standard pension), the pension of a model case with 45 Entgeltpunkte (the Eckrentner, or benchmark pensioner). Since July 2025 it works out arithmetically as 45 × EUR 40.79 = EUR 1,835.55 gross per month (from July 2026: EUR 1,913.40). This is expressly a model value before deductions: health and care insurance, along with tax, reduce the pension actually paid out, and the average pensions actually paid are usually lower. Your personal amount depends on your individual Entgeltpunkte.

A widespread misreading: the Rentenniveau (pension level) of 48 percent (the protection level before tax) is not the share of your final net income that the pension replaces. It is a statistical computation, namely the ratio of the Standardrente to the average wage (each after social contributions, before tax). The Bundesministerium für Arbeit und Soziales (Germany Federal Ministry of Labour and Social Affairs) stresses that it permits no statement about individual entitlements. Your personal value depends on your Entgeltpunkte. Through the Rentenpaket 2025 (in force since January 2026) this minimum protection level of 48 percent is stabilised as a floor until 2031. What applies after that is open.

For your own estimate, the annual Renteninformation (pension statement) from the Deutsche Rentenversicherung (Germany state pension authority) is the more precise starting point: it sets out the Entgeltpunkte you have reached so far and a projection. Treat that projection as an assumption under today's conditions, not as a promise.

## Estimating your need in retirement

The second side of the calculation is your need. Here a widespread rule of thumb from the consumer advocates and from Finanztip helps as an anchor, not as law.

| Aspiration | Rule of thumb (share of final net income) |
| --- | --- |
| Accustomed standard of living | around 80 percent |
| Comfortable base | around 65 percent |
| Basic need | around 50 percent |

The logic behind it: in retirement some outgoings fall away (savings contributions, work costs, often the repayment of the family home), while others remain or rise (health, leisure, travel). Which share is realistic for you depends on your life, not on a table. The values are rules of thumb that you adjust to your own circumstances.

One figure is easily underestimated here: inflation. Over a span of 20 to 30 years, money loses noticeable purchasing power. A need that seems sufficient today can turn out markedly higher in the future. It pays to think of the estimated need in today's purchasing power and to carry the erosion of money as its own item, rather than forgetting it.

## Calculating the pension gap

With both sides in hand, the estimated need and the expected income, the gap can be put into approximate figures. The calculator below brings this difference together for you.

The result is an estimate under today's assumptions, not a forecast. It changes with every year you pay in, with the development of the Rentenwert, and with your spending. It makes sense to repeat the calculation at regular intervals, for instance when the annual Renteninformation arrives or your income changes.

## How to close the gap

Once the gap is in figures, the question turns to the building blocks. There are several, and they differ in flexibility, support and taxation. The overview below orders the common options by their mechanics, not by rank. Which building block suits you depends on your circumstances and is not a recommendation of this article.

| Building block | Mechanics | Support / taxation |
| --- | --- | --- |
| ETF portfolio | Flexible, no cap, market-dependent; available at any time | No support; Abgeltungsteuer (Germany flat capital-gains tax) 26.375 %, Teilfreistellung (partial exemption) 30 %, Sparerpauschbetrag (saver allowance) EUR 1,000 / EUR 2,000 |
| bAV (Entgeltumwandlung, salary conversion) | Through the employer; from gross salary | Tax-free up to 8 % of the BBG-RV (pension-insurance contribution ceiling), free of social contributions up to 4 %; payout taxed in full on the deferred basis + full health and care contributions |
| Riester | Replaced from 1 January 2027 by the new Altersvorsorgedepot (retirement-provision account; reform act approved by the Bundesrat on 8 May 2026); existing contracts grandfathered | Currently: Grundzulage (basic subsidy) EUR 175, Kinderzulage (child subsidy) EUR 300 / EUR 185, maximum special-expenses deduction EUR 2,100 per year |
| Rürup / Basisrente | Mainly for the self-employed; lifelong pension, no lump-sum option, illiquid | Contributions 100 % deductible (2026: up to EUR 30,826 single / EUR 61,652 married); payout taxed on the deferred basis |

The building blocks are not mutually exclusive. Many paths combine several, for instance a supported component through the employer alongside a flexible portfolio. What is decisive are the respective conditions: lock-in period, availability, level of support and the taxation in retirement.

## Private provision: the options in overview

One idea ties almost all of these building blocks together: nachgelagerte Besteuerung (deferred taxation). Contributions that are supported or fed from gross income are relieved during the accumulation phase, and in return the later payout is taxed. The taxable share of the gesetzliche Rente is governed by § 22 Nr. 1 EStG (the Germany income-tax act) and is fixed in the year of retirement. The Wachstumschancengesetz (Growth Opportunities Act) of 2024 slowed the increase: to 0.5 percentage points per year from the 2023 cohort onward, so that full taxation is reached only in 2058 (instead of 2040). Whoever retires in 2025 taxes 83.5 percent of the pension; for the 2026 cohort it is 84 percent.

No building block is the right one for everyone. The choice depends on what you need: flexibility, support, or a plannable lifelong pension. Support usually costs availability; flexibility forgoes support. That trade-off is personal, not universal.

The building blocks can be ordered loosely by their character. The flexible, unsupported portfolio stands for free availability without state help, but in return market-dependent: returns are an assumption, not a promise. The supported routes (betriebliche Altersvorsorge, Riester) trade part of that flexibility for subsidies or tax relief during the accumulation phase. The Basisrente (Rürup) is aimed above all at the self-employed without access to the gesetzliche Rente and delivers a lifelong payment, but is illiquid and offers no lump-sum option.

With supported products, always check the conditions current at the time, since subsidies, maximum amounts and the statutory framework change. The Riester area, for instance, moves to the new Altersvorsorgedepot on 1 January 2027; the reform act passed the Bundesrat on 8 May 2026, and existing contracts are grandfathered.

This article explains general principles and presents the building blocks of retirement provision neutrally, as options. It is not individual investment or tax advice and not a recommendation for any particular product. All pension and return figures are model values under today's assumptions, not a forecast. For an assessment tailored to your situation, consult a qualified adviser.

## Frequently asked questions

### What is the pension gap?

The pension gap is the difference between your estimated need in retirement and your expected retirement income, from the state pension, occupational provision and a portfolio, for instance. Both sides are estimates, not fixed values: the gap is a snapshot you readjust at regular intervals, for example when the annual pension statement arrives or your income changes. What remains is what private provision would have to carry.

### How high is the German standard pension?

The Standardrente, the model case with 45 earnings points, works out since July 2025 as 45 × EUR 40.79 = EUR 1,835.55 gross per month; from July 2026 it rises with the new pension value of EUR 42.52 to EUR 1,913.40. This is a model value before deductions: health and care insurance and tax reduce the payout, and the average pensions actually paid are usually lower.

### What share of your final net income do you need in retirement?

As a rule of thumb from consumer advocates and Finanztip, around 80 percent of final net income sustains the accustomed standard of living, around 65 percent a comfortable base and around 50 percent basic needs. These are anchors, not fixed values: some outgoings fall away in retirement, others rise, and inflation over 20 to 30 years belongs in every estimate.

## Sources

- [SGB VI § 64 Rentenformel für Monatsbetrag der Rente](https://www.gesetze-im-internet.de/sgb_6/__64.html) · Bundesministerium der Justiz
- [Rentenanpassung 2026: Renten steigen im Juli um 4,24 Prozent](https://www.deutsche-rentenversicherung.de/DRV/DE/Ueber-uns-und-Presse/Presse/Meldungen/2026/260305-rentenanpassung-2026) · Deutsche Rentenversicherung
- [Rentenreform 2025: Stabilisierung des Rentenniveaus bis 2031](https://www.bmas.de/DE/Soziales/Rente-und-Altersvorsorge/Rentenreform-2025/rentenreform-2025.html) · Bundesministerium für Arbeit und Soziales
- [EStG § 22 Arten der sonstigen Einkünfte (Besteuerungsanteil der Rente)](https://www.gesetze-im-internet.de/estg/__22.html) · Bundesministerium der Justiz
- [Fragen und Antworten zur Reform der geförderten privaten Altersvorsorge](https://www.bundesfinanzministerium.de/Content/DE/FAQ/reform-der-privaten-altersvorsorge.html) · Bundesministerium der Finanzen
- [Altersvorsorge: der Überblick](https://www.finanztip.de/altersvorsorge/) · Finanztip