• Self-employed individuals and employees can save for retirement with the Rürup pension while benefiting from tax incentives.

• Like the statutory pension insurance and professional pension schemes, the Rürup pension is part of the first pillar of retirement provision.

• Contributions to the Rürup pension of up to €29,344 per year reduce your tax liability. For married couples filing jointly, this amount is up to €58,688.

• For 2025, the taxable portion will be 83.5%. Full taxation will now be reached in 2058 instead of 2040.

• The Rürup pension can be combined with disability insurance, allowing these contributions to be tax-deductible as well.

The Rürup pension has been part of the first pillar of retirement provision since 2005, alongside statutory pension insurance and professional pension schemes (such as those for doctors, lawyers, and notaries). Typically, it is a traditional or unit-linked pension insurance, though the Rürup pension is occasionally available as an investment savings plan.

The unique feature of this retirement provision option is that, like statutory pension insurance contributions, the contributions to the Rürup pension are tax-advantaged.

This allows self-employed individuals, who are not mandatory members of the statutory pension insurance or a professional pension scheme, to build a retirement savings plan with state support, starting from the point they begin receiving pension payments.

Those covered by statutory pension insurance use the Rürup pension to maximize their retirement contributions and generate additional pension income.

It is also possible to combine disability insurance with the basic pension / Rürup pension. Unlike with the Riester pension, the tax advantages extend to contributions for a disability insurance supplementary policy.

Originally, this pension insurance was specifically designed for self-employed individuals who are not mandatorily covered by the statutory pension insurance or a professional pension scheme. However, employees can also benefit from this form of retirement provision under certain circumstances.

In principle, anyone can take out a Rürup pension. However, the tax advantages are lost if you already pay high contributions to the statutory pension insurance or a professional pension scheme. In this case, a private pension insurance or a Riester contract might be a better alternative for retirement savings.

Whether the Rürup pension is a sensible component of your retirement plan depends on your personal situation and income:

• Statutory pensions are financed on a pay-as-you-go basis and must support an increasing number of retirees with fewer contributors. The Rürup pension relies on capital-funded insurance. From the start of retirement, you have access to the contributions you’ve made, along with the returns generated.

• High-earning self-employed individuals can fully utilize the tax benefits of the Rürup pension. You can deduct 100% of contributions up to a maximum of €29,344 annually (as of 2025), which reduces your taxable income. For married couples, this amount is doubled.

• The Rürup pension is also attractive for those covered by statutory pension insurance to take full advantage of the tax benefits through special expenses deductions.

• Young entrepreneurs, however, should consider waiting before taking out additional pension plans. As long as income is still fluctuating, it might be better to invest in the business. However, you shouldn’t delay planning your retirement entirely. It’s best to address this once the company becomes more stable.

The Rürup pension is tax-advantaged on one hand, but the payout in retirement is taxable. The tax consideration occurs gradually in both the savings and payout phases.

During the Savings Phase:

• In 2025, 100% of the contributions to the Rürup pension up to the maximum contribution limit will be deducted from taxable income.

During the Payout Phase:

• In 2025, 83.5% of the pension is subject to taxation. For new retirees, this taxable portion will increase by 0.5%each year, until, starting in 2058, the entire pension will be taxable.

The Rürup pension is tax-advantaged on one hand, but the payout in retirement is taxable. The tax consideration occurs gradually in both the savings and payout phases.

During the Savings Phase:

• In 2025, 100% of the contributions to the Rürup pension up to the maximum contribution limit will be deducted from taxable income.

During the Payout Phase:

• In 2025, 83.5% of the pension is subject to taxation. For new retirees, this taxable portion will increase by 0.5%each year, until, starting in 2058, the entire pension will be taxable.

The Rürup pension cannot be pledged as collateral, does not allow for a lump-sum payout, and is not inheritable. Without additional agreements, the contributions paid into the pension remain with the insurance provider if you pass away during the accumulation phase. However, it is possible to arrange a refund of contributions.

Even during the payout phase, a guaranteed pension period or a survivor’s pension can be included. However, this additional protection in the event of death reduces the amount of the pension payments during retirement.

The Rürup pension is designed to provide secure retirement income, similar to statutory pension insurance or a professional pension scheme. For this reason, the law prohibits policyholders from canceling the contract.

If you can no longer afford the contributions, the policy can be made contribution-free. Alternatively, some providers allow you to continue your retirement savings with a minimum contribution of 25 or 50 euros per month.