Rürup-Rente (Basisrente)
Rürup-Rente (Basisrente — basic pension) is a private pension program with state tax deductions up to €27,566 per year for self-employed. Money is locked until age 62, payouts are annuity only, but when leaving the EU there is no subsidy clawback (unlike Riester). Beneficial for self-employed with high income and those who will definitely stay in Germany until retirement.
How It Works
You pay contributions to a private pension fund or insurance company. Contributions reduce taxable income — the state returns part of the money through tax deduction. From 2025, 100% of contributions are deductible from taxable income (up to the limit) [1].
After retirement (not before age 62), you receive a monthly annuity. The annuity is subject to income tax at the rate applicable at retirement [2].
Tax Deductions
From 2025, the state recognizes 100% of contributions as a deduction from taxable income (in 2024 — 100%, in 2023 — 96%) [3].
Contribution limits for 2025 [4]:
- For singles: €29,344/year
- For married couples (joint filing): €58,688/year
Savings calculation: if you pay €10,000 contribution at 42% tax rate, the state returns €4,200 through tax deduction.
Who Benefits
Rürup can be opened by any German tax resident. Mathematically beneficial for [5]:
- Self-employed and freelancers — they have no access to Riester and no employer contributions in bAV (betriebliche Altersvorsorge — company pension)
- People with income above €60,000/year — tax rate reaches 42%, deduction returns €4,200 per €10,000 contribution
- Those paying Spitzensteuersatz (maximum tax rate 45%) — at income above €277,826, refund is €4,500 per €10,000 contribution [6]
Pros
| Pro | Description |
|---|---|
| Tax deductions | 100% of contributions deductible |
| Creditor protection | Protected in bankruptcy |
| Suits self-employed | Unlike Riester |
Cons
| Con | Description |
|---|---|
| No flexibility | Money locked until 62 |
| Annuity only | Can't take lump sum |
| No inheritance | Usually can't pass to heirs |
| Tax on payouts | Pension is taxed |
Key Advantage for Immigrants: No "Harmful Termination"
Unlike Riester, Rürup does not suffer from clawback rules when leaving the EU.
| Scenario | Riester | Rürup |
|---|---|---|
| Move to USA | Repay all subsidies + tax benefits | Keep full entitlement |
| Move to UK | Repay all subsidies + tax benefits | Keep full entitlement |
| Move to Switzerland | Repay all subsidies + tax benefits | Keep full entitlement |
Taxation of the annuity in retirement depends on the Double Taxation Agreement (DTA) with your country of residence.
Savings Example
Self-employed with €80,000 income:
- Contribution €10,000/year
- Tax savings ~€4,200/year (at 42% rate)
Who Benefits
| Beneficial | Not Beneficial |
|---|---|
| Self-employed with high income | Employees (have Riester) |
| People closer to retirement | Young with low income |
| Those needing bankruptcy protection | Those valuing flexibility |
Alternative Approach: ETF
ETFs as alternative to Rürup have a different set of characteristics:
| Criterion | Rürup | ETF |
|---|---|---|
| Tax deduction now | Yes, up to €27,566/year | No |
| Flexibility | Locked until 62 | Withdraw anytime |
| Inheritance | No (usually) | Yes |
| Tax on payouts | Full annuity | Only profit, 26.4% |
| Creditor protection | Yes | No |
The choice depends on your tax rate, age, need for flexibility, and migration plans.
FAQ
Not legal or financial advice.
I'm a freelancer earning €40,000 — is Rürup worthwhile below the 42% bracket?
At €40,000 taxable income (2025), the marginal tax rate is approximately 37%. A €5,000 Rürup contribution generates a tax saving of ~€1,850. The question is whether this tax benefit plus the protection from creditors outweighs the loss of flexibility (money locked until 62, no lump-sum withdrawal, no inheritance). Comparison: investing €5,000 in a free ETF portfolio at 7% over 25 years yields ~€27,000 — accessible anytime, inheritable, taxed at 26.375% on gains only. Rürup's €5,000 grows similarly but is taxed as full income at the marginal rate during retirement (potentially 25-35%). The crossover point where Rürup clearly wins: marginal tax rate now above 40% AND expected retirement tax rate below 30%. At €40,000 income, the math is close — individual factors (retirement plans, country of residence at retirement, creditor risk) determine the outcome.
Can I pause or reduce Rürup contributions?
Yes, with limitations. Rürup is flexible regarding contribution amounts — there is no mandatory minimum contribution, unlike some insurance-based products. You can reduce contributions to as low as €0 in a given year (Beitragsfreistellung — contribution exemption). However: the specific terms depend on the product type. Fondsgebundene Rürup (fund-linked Basisrente) typically allows full flexibility. Klassische Rentenversicherung (classic pension insurance) may have contractual minimum contributions — check the Versicherungsschein (policy document). The tax benefit is proportional to the contribution: €0 contribution = €0 deduction. Restarting or increasing contributions later is possible within the annual maximum (€27,566 for singles in 2025).
What happens to my Rürup if I die before retirement?
Standard Rürup: the accumulated capital is lost — it does not pass to heirs. This is a fundamental design feature: Rürup follows the Basisversorgung (basic provision) principle, structured like the state pension. However, most modern Rürup products offer optional Hinterbliebenenschutz (survivor protection): a Rentengarantiezeit (guaranteed pension period) of 5-10 years — if you die within this period after retirement, the pension continues to be paid to the surviving spouse or children. A separate Hinterbliebenenrente (survivor's pension) can be added for the spouse. These options reduce your own pension amount by 5-15%. Without these add-ons, the money goes to the insurance collective (Versichertengemeinschaft — insured community). Compare this to ETF investing: 100% inheritable, no additional cost.
I plan to leave Germany in 10 years — does Rürup make sense?
Unlike Riester, Rürup does NOT require repayment of tax benefits upon leaving Germany or even the EU. The pension is paid out at retirement age regardless of your country of residence. Tax treatment depends on the DBA (Doppelbesteuerungsabkommen — double taxation agreement) between Germany and your new country. In many DBAs, pension income is taxed in the country of residence, not Germany — potentially at a lower rate. The risk factor: if you leave after only 10 years of contributions, the accumulated capital may be modest, and the inflexibility (no withdrawal until 62, only as monthly pension) reduces the utility. The tax deduction benefit of €27,566/year is immediate and certain. The question: do 10 years of tax savings (potentially €40,000-80,000 total, depending on contribution level and tax rate) justify locking that capital until age 62.
Can I invest Rürup contributions in ETFs within the contract?
Yes, fondsgebundene Rürup (fund-linked Rürup / Basisrente) products allow investing in ETFs and mutual funds. Providers like fairr (by Raisin), ETF Rürup from myPension, and several insurance companies offer ETF-based options with TER (total expense ratio) often under 1% total (including product wrapper fees). The key cost comparison: (1) product wrapper fee (Mantelkosten) — typically 0.3-0.7%/year, (2) underlying ETF TER — 0.1-0.3%, (3) total ongoing costs: 0.5-1.0%/year. Compare to a free ETF Depot (brokerage account): 0.1-0.3% total. The extra 0.3-0.7% is the price of the Rürup tax benefit. Whether this is worthwhile depends on your marginal tax rate (higher rate = larger tax benefit = faster break-even on the extra costs). Klassische Rentenversicherung (classic pension insurance) Rürup with Garantiezins (guaranteed interest rate) offers certainty but typically returns under 2% — below inflation in most years.
Sources
- Bundesministerium der Finanzen — Alterseinkünftegesetz: Steuerpflicht von Renten und Beiträge zur Basisversorgung, https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Steuern/Weitere_Steuerthemen/Altersvorsorge/alterseinkunftegesetz.html
- Deutsche Rentenversicherung — Besteuerung von Renten, https://www.deutsche-rentenversicherung.de/DRV/DE/Rente/Allgemeine-Informationen/Wissenswertes-zur-Rente/FAQs/Besteuerung/besteuerung_node.html
- Bundesministerium der Finanzen — Höchstbeiträge zur Altersvorsorge 2025, https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Steuerarten/Einkommensteuer/2024-11-08-hB-altersvorsorge-2025.html
- § 10 Abs. 3 EStG — Sonderausgaben: Vorsorgeaufwendungen, https://www.gesetze-im-internet.de/estg/__10.html
- Stiftung Warentest — Rürup-Rente: Für wen sie sich lohnt, https://www.test.de/Ruerup-Rente-Basis-Rente-Test-1176050-0/
- Bundesministerium der Finanzen — Einkommensteuertarif 2025, https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Steuern/Steuerarten/Einkommensteuer/einkommensteuertarif.html