What is the difference between Riester, Rürup, bAV and an ETF savings plan?

Riester is a state-subsidized German private pension with allowances (€175/year base + €300 per child) and tax deduction up to €2,100/year — designed for low- to middle-income employees with children. Rürup (Basisrente) is the equivalent for the self-employed and high earners: 100 % tax deductible up to €27,566/year (2025), but no allowances and no lump-sum payout. Betriebliche Altersvorsorge (bAV) works through salary deferral at the employer: contributions are deducted before income tax and social insurance, but in retirement they are fully taxed and subject to health insurance. An ETF savings plan, in contrast, is paid from net income and only the capital gains are taxed at 26.375 % — no state subsidy, but full flexibility and inheritability.

When does Rürup beat an ETF savings plan?

Rürup wins when your current marginal tax rate is high (>40 %) and your retirement tax rate is low ( 30 years), the ETF is usually net better because only gains are taxed at 26 % rather than the entire payout at full income tax.

Why is an ETF savings plan often better than Riester?

Riester contracts have high admin and acquisition costs (often 5–15 % of contributions), rigid guaranteed interest rates and a payout obligation as annuity. A globally diversified ETF costs 0.1–0.2 % p.a. and historically delivers 5–7 % p.a. Riester only pays off for families with multiple children (3+ kids × €300 allowance = €900/year extra) and low income — otherwise inflation and costs eat the subsidy advantage. Stiftung Warentest repeatedly shows that most Riester contracts deliver real negative returns.

What return can I realistically assume?

The calculator uses 5 % p.a. nominal return — a conservative midpoint for global equity ETFs (MSCI World since 1990: ~7.5 % p.a. nominal). Riester and Rürup contracts in practice deliver 1–3 % p.a. after fees — for simplicity the tool uses 5 % for all options to isolate the pure tax and subsidy effect. In reality, the ETF advantage is even larger than the calculator shows.

Can I reinvest tax savings in an ETF?

Yes — and this is an important strategy. If Rürup or bAV save you roughly €1,000 per year in taxes, you can invest that €1,000 into an ETF. This significantly increases total capital but also halves the apparent advantage of tax deferral. The calculator does not model this reinvestment — you should mentally add it back if you do not consume the tax savings.

PENSION VS. ETF CALCULATOR

Riester, Rürup, bAV or ETF — which suits you?

Q: What is the catch with bAV?

The "double contribution problem": in retirement you pay full statutory health and care insurance (~14.6 % + 3.6 % ≈ 18 %) on bAV pensions and lump sums, while ETF gains are only taxed at 26.375 %. You also reduce your future state pension entitlement because salary deferral reduces your social-insurance assessment base. Rule of thumb: bAV only beats an ETF if your employer adds at least 20 % on top — otherwise the ETF savings plan, after all taxes and health insurance, is usually superior.

Q: How is Rürup taxed in retirement?

Since 2023, Rürup contributions are 100 % deductible as Sonderausgaben. In return the payout is (now) also 100 % taxable in retirement — for retirement start from 2058, 100 % of the annuity counts as income, lower percentages before. Advantage: in retirement most people have a lower marginal tax rate than during their career, so the tariff difference creates a net benefit. The calculator applies the retirement tax rate you enter directly to the full gross annuity.

Q: Are the calculations binding?

No. The calculator is a simplified model with constant 5 % return, fixed tax/SI rates and 20 years payout duration. Real contracts incur costs, guaranteed-interest regimes, tax reforms and individual factors (marital status, children, contribution ceiling). The calculator is not tax or insurance advice. For a binding recommendation, consult an independent fee-based adviser.

Live comparison of the four main retirement options in Germany: monthly contribution, current and retirement tax rate — and you see which option leaves you the most net income.

BEST OPTION FOR YOU

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highest net pension for your inputs

Net pension / month € 0

Advantage over worst option € 0

Your inputs

Monthly gross contribution

Amount flowing into the savings vehicle per month

€

Years until retirement

How many years do you save?

years

Tax rate today

Your marginal tax rate in working life

Tax rate in retirement

Estimated marginal tax rate after retirement

Children (for Riester subsidy)

Number of children born from 2008 — €300/year subsidy per child

Comparison of all four options

Option	Real cost / month	End capital	Gross pension / month	Net pension / month	Total net payout

Net monthly pension comparison

Recommendation for your investor type

How the four options work

Riester-Rente

State-subsidized German private pension. You pay monthly contributions, the state adds €175/year base subsidy + €300 per child (born from 2008). Up to €2,100/year are tax-deductible as Sonderausgaben. Payout as lifetime annuity, fully taxed in retirement. Worth it for families with multiple children and low income.

Rürup-Rente (Basisrente)

Tax-subsidized private pension without allowances. 100 % of contributions up to €27,566/year (2025) deductible as Sonderausgaben. Payout only as lifetime annuity, fully taxed (for retirement starting from 2058: 100 %). No inheritability beyond survivor protection, no lump sum. Ideal for self-employed and high earners with high current tax rate.

Betriebliche Altersvorsorge (bAV)

Employer-organized retirement scheme via salary deferral. Contributions up to 4 % of social-insurance ceiling (2025: €302/Mo West) are exempt from income tax and social insurance. In retirement, fully subject to income tax and statutory health insurance — the "double contribution problem" is the biggest drawback. Worth it primarily with employer match of ≥20 %.

ETF savings plan in a brokerage account

Contributions from net income, no state subsidy — but full flexibility: cancellable any time, freely accessible, inheritable. Only gains are taxed at 26.375 % capital gains tax + solidarity surcharge (church tax optional). The annual saver allowance of €1,000 (single) or €2,000 (married) is tax-free. Retirement payout: you sell shares yourself — no annuity obligation. Ideal for those who value flexibility and want to use the lower flat tax.

Related tools & academy articles

→ Retirement Gap Calculator — how big is your gap? → DCA Simulator — savings plan vs. lump sum → Real Return Calculator — account for inflation → Tax Optimizer — KESt & saver allowance → ETF Tax Guide 2026 — complete walkthrough → Savings Plan Broker Comparison — cheapest providers

Frequently asked questions on pension taxes & ETF

What is the difference between the four options?

Riester: state subsidy + tax deduction up to €2,100/year. Rürup: 100 % tax deduction up to €27,566/year, no subsidy. bAV: contributions before tax + SI, retirement payouts fully taxed + health insurance. ETF: from net income, only gains taxed at 26.375 %.

When does Rürup beat ETF?

At very high current tax rate (>40 %) and low retirement rate (<25 %). Self-employed earners benefit — employees with normal tax rates and long horizons usually do better with an ETF net of all taxes.

Why does ETF often beat Riester?

Riester contracts have high costs (5–15 % of contributions) and deliver 1–3 % p.a. in practice. A global ETF costs 0.15 % p.a. and delivers 5–7 % real. Riester pays off only with many children (3+ × €300 subsidy) and low income.

What is the catch with bAV?

The "double contribution problem" — in retirement you pay ~18 % health/care insurance on top of full income tax on bAV payouts. You also reduce your future state pension. bAV pays off only with employer match ≥20 %.

What return is realistic?

5 % p.a. nominal — historical midpoint for global equity ETFs (MSCI World 7.5 %). Riester/Rürup deliver 1–3 % real. The calculator uses 5 % for all options to isolate the tax effect — the ETF advantage is even larger in reality.

How is Rürup taxed in retirement?

Retirement start 2058+: 100 % of gross payout taxable (lower percentages before). Advantage: lower marginal tax rate in retirement. The calculator applies your entered retirement tax rate to the full gross pension.

Are tax savings already included?

Yes, in "Real cost / month": for Rürup, Riester and bAV the tax and SI savings are deducted from the gross contribution. The ETF savings plan costs you the full gross contribution from net income.

Are the calculations binding?

No. Simplified model with constant return, fixed rates and 20-year payout. Real contracts have costs, guaranteed rates and individual factors. Not tax or investment advice.

Important notice. This calculator provides a simplified model with constant 5 % p.a. return, fixed tax and social insurance rates and a 20-year payout phase. Real contracts have individual costs, guaranteed interest rates, tax regimes and personal factors (family, children, contribution ceiling). This is not tax, investment or insurance advice. A binding recommendation can only be provided by an independent fee-based adviser or tax adviser.

Pension vs ETF Calculator – Riester, Rürup, bAV or ETF? Live tool