The statutory pension (gesetzliche Rente) is the main retirement income for most people in Germany, yet few know how it is calculated. It is simpler than it looks.
Pension points
Earn exactly the average of all insured people in a year and you get one pension point (Entgeltpunkt). In 2026 that average income is €51,944 gross (provisional, Social Insurance Reference Values Ordinance 2026). Above the contribution ceiling (€101,400) no further points accrue – just under two a year is the maximum. Child-raising, caring and illness also earn points.
What a point is worth
Since 1 July 2026 one point pays €42.52 a month (from 1 July 2025: €40.79) – a 4.24 % increase, identical in East and West. Formula (§ 64 SGB VI): points × access factor × pension value × pension-type factor. At the regular retirement age both factors are 1.0, so 45 years at average pay = 45 points = €1,913.40 gross – the “standard pensioner”.
Contribution rate and pension level
- Contribution rate: 18.6 % of gross pay in 2026, split equally; 2027 not yet fixed.
- Pension level: standard pensioner versus today’s average earner, before tax: 48.0 % in 2026, with a 48 % floor until 1 July 2031 (BGBl. 2025 I No. 362). A model figure, not your personal ratio.
When can you retire?
| Born | Regular age | No deductions with 45 years |
|---|---|---|
| 1960 | 66 + 4 months | 64 + 4 months |
| 1963 | 66 + 10 months | 64 + 10 months |
| 1964 or later | 67 | 65 |
With 35 insurance years you may retire from 63 with a 0.3 % deduction per month (§ 77 SGB VI) – for the 1964 cohort 48 months, 14.4 % less for life. Working beyond the regular age without drawing the pension earns 0.5 % per month.
Reading your annual statement
From age 27 you receive the Renteninformation every year (§ 109 SGB VI). Three lines matter: pension on full disability, old-age pension earned so far, and the projection if you keep earning as before. Two variants assume 1 % or 2 % annual increases – assumptions, not promises. All figures are gross: health and care contributions and tax (84 % taxable for 2026 retirees) still come off.
Your pension gap in 4 steps
- Set your need as a percentage of today’s net income.
- Estimate your net pension: projection line minus health, care and tax, as a percentage of today’s net.
- Form the gap: need minus pension ratio – e.g. 80 % needed, 50 % covered, 30 points missing.
- Check purchasing power: Deutsche Rentenversicherung shows that €1,000 in 20 years at 1.5 % inflation buys about €740 of today’s goods.
Closing the gap is the next step – see The three layers; which investment suits you is a matter for a licensed adviser.
General information, not legal, tax or investment advice. Sources: Social Code VI (§§ 35, 38, 64, 77, 109, 235, 236, 236b SGB VI), Social Insurance Reference Values Ordinance 2026, Pension Value Ordinance 2026, Contribution Rate Notice 2026, Act on Stabilising the Pension Level (BGBl. 2025 I No. 362), Deutsche Rentenversicherung, Federal Government, consumer advice centres – as of October 2026. Want to go through your statement together? Get in touch.
