How the app calculates
Transparent, not a black box: this page shows the formulas, assumptions and colours behind every number in the app, using the same charts as the app itself. It is not a calculator of the Deutsche Rentenversicherung and does not replace a Renteninformation, for your actually accrued pension your own Renteninformation is authoritative.
Statutory pension
The German statutory pension follows a fixed, legally defined formula:
Entgeltpunkte (pension points) are earned for each year you pay contributions: 1 point corresponds to a year's salary equal to the average earnings of all insured persons. If you earn twice the average, you get 2 points that year; if you earn half, 0.5 points.
42.52 € per point (since July 2026, uniform nationwide)
51,944 € (reference amount for 1 Entgeltpunkt)
1.0 at retirement age 67 (no deduction); lower for retirement from 63 with deductions
1.0 (old-age pension)
From gross to net
The app also shows the net pension: from the gross pension, health and long-term care insurance contributions for pensioners are deducted (roughly 12%, depending on your health fund, the additional contribution and whether you have children), then individual income tax at your own rate. The chart below shows an example with approximate amounts.
Values are illustrative examples to show the order of magnitude, not a forecast for your case.
Your needs in retirement
The gap is needs minus net pension. Your needs, that is how much you require per month in retirement, are a personal figure, not a fixed number. The app offers two ways to set them, instead of just a flat percentage rule:
- Simple: a percentage of your current net income (the common rule of thumb of around 80%). Quick, but rough.
- Detailed: you start from your actual monthly expenses and subtract what falls away in retirement (for example a paid-off loan, the savings rate you no longer set aside, or children who are independent), plus a safety buffer. This gives a more realistic figure than a flat percentage.
That way you see not just a rough ratio, but concretely how much you really need per month.
The pension gap over time
Needs and the statutory pension develop differently: needs in retirement grow with the inflation rate you assume, the statutory pension grows with the annual Rentenanpassung (pension adjustment). If inflation is higher than the pension adjustment, the gap widens year after year.
How long the pension needs to last is up to you, set via the assumed life expectancy (up to age 87 in the example); this defines the period shown in the chart.
Illustrative example. The slopes depend on your assumed inflation and pension adjustment.
The gap matrix
Instead of a single number, the app shows a matrix: each row is a return scenario for your savings plans, each column a possible annual Rentenanpassung (pension adjustment). Each cell shows how much surplus you have left at the end of the month or how much is missing, in today's purchasing power.
The star ★ marks the reference scenario: a realistic return combined with +2% pension adjustment per year, close to the historical average.
− = shortfall · + = surplus (€/month, today's value)
Today vs. nominal
A euro in 30 years buys less than a euro today. By default the app therefore converts all future amounts back to today's purchasing power: 4,000 € nominal in 30 years corresponds, under the assumed inflation, to only about 2,200 € in today's purchasing power. This makes amounts across different time horizons comparable and is more realistic for planning, anyone who prefers to look at the actually paid-out amount can switch to "Nominal" at any time.
Three tax regimes
Savings vehicles for retirement are taxed differently in Germany. The app distinguishes three regimes:
- ETF savings plan: Abgeltungssteuer (flat capital gains tax) of 26.375% (including solidarity surcharge) on the gains, after deducting the 30% Teilfreistellung (partial exemption) for equity funds. Only the value gain is taxed, not the invested capital.
- Private pension insurance: when paid out as a pension, only the so-called Ertragsanteil (an age-dependent percentage of the payout) is taxed at your personal marginal tax rate, not the full pension.
- Riester/retirement savings account: deferred taxation, meaning the payout is fully taxed in retirement at your then-applicable income tax rate (or the Ertragsanteil above the state subsidy).
Buy-to-let property
The app treats a rental property as its own income source for retirement: the net rent after taxes and running costs feeds into the pension gap.
- Tax: rental income counts as income and is taxed at your marginal rate. Deductible items include building depreciation (AfA) and loan interest, which lowers the tax.
- Purchase: one-off purchase costs (real-estate transfer tax by federal state, notary, land registry, optionally an agent). With a loan, leverage also plays a role, interest is deductible, principal repayment is not.
- Sale: a gain is tax-free after a 10-year holding period (speculation period, §23 EStG).
- For the pension gap what counts is the rent you have in retirement, not today's: if the loan is still running it is lower at first and higher later. The app averages this over your retirement years.
- Running costs: a maintenance reserve, management costs and a vacancy allowance (empty periods or missed payments) are deducted from the rent.
A real property purchase is more complex than any model can capture. Only simplified or not covered are, for example, large irregular renovations, tenant and legal risk, low liquidity, concentration risk (much of your wealth in a single asset), interest-rate risk when refinancing after the fixed-rate period, regional rent trends and selling costs. Use this part for scenarios, not as an exact return forecast.
Example values. If the loan runs into retirement the rent is lower at first, the app shows the average.
Assumptions & limits
The statutory part of the calculation follows the official formula and is reliable as long as your inputs (Entgeltpunkte, retirement age, contribution years) are correct. The projection over 20 to 40 years, however, depends on assumptions you set yourself: salary growth, the return of your savings plans, your tax rate in retirement, and inflation. Small changes to these assumptions can shift the result significantly over such long time horizons, which is why the app deliberately shows several scenarios instead of a single forecast figure.
The app compares categories of retirement provision (statutory pension, ETF savings plan, private pension, Riester, buy-to-let property), not specific products or providers. It does not constitute financial, tax or legal advice.
Note
All results are non-binding projections based on your own inputs and simplified, general assumptions. They can differ substantially from the actual development. No guarantee is given for accuracy, completeness or timeliness. See Legal notice for details.