Retirement Planning for Freelancers in Germany: Complete Guide 2026

As a freelancer in Germany, retirement planning takes on a different dimension than for employees. While employees automatically contribute to the state pension system and often have employer-sponsored retirement plans, freelancers must take full responsibility for their own retirement savings. This can be both a challenge and an opportunity.

The challenge is that there’s no automatic system saving for your retirement. The opportunity is that you have more control and flexibility in how you save and invest. But without proper planning, many freelancers risk reaching retirement age with insufficient savings.

This comprehensive guide will help you understand the German retirement system, your options as a freelancer, and how to build a secure financial future.

Why Retirement Planning Matters for Freelancers

Unlike employees, freelancers don’t automatically contribute to the German state pension system (Gesetzliche Rentenversicherung). This means:

• No automatic pension contributions: You must actively save for retirement
• No employer matching: You don’t benefit from employer contributions
• Variable income: Irregular income makes consistent saving more challenging
• Full responsibility: The burden of retirement planning falls entirely on you

However, this also means you have more flexibility:

• Control over investments: You choose where and how to invest
• Tax advantages: Many retirement savings options offer tax benefits
• Flexibility: You can adjust your strategy as your income changes

The key is starting early and being consistent. Even small, regular contributions can grow significantly over time thanks to compound interest.

Understanding the German Pension System

Before planning your retirement, it’s important to understand how the German pension system works and where you fit in.

The State Pension System (Gesetzliche Rentenversicherung)

The German state pension system is a pay-as-you-go system where current workers’ contributions fund current retirees’ pensions. As a freelancer, you’re generally not required to contribute, but you can choose to do so voluntarily.

How It Works:

• Employees pay 9.3% of their income (up to a cap) into the system
• Employers match this with another 9.3%
• Contributions are capped at the “Beitragsbemessungsgrenze” (currently 87,600 EUR/year in 2025)
• Pensions are calculated based on your total contributions over your working life

For Freelancers:

• You’re not automatically enrolled
• You can make voluntary contributions (freiwillige Beiträge)
• Voluntary contributions can be beneficial if you expect to receive a pension from previous employment
• The minimum voluntary contribution is around 85 EUR/month

Should You Contribute?

• Yes, if: You have previous contributions from employment and want to maintain continuity
• Yes, if: You want a guaranteed base pension in retirement
• No, if: You’re starting fresh and prefer private investments with potentially higher returns
• No, if: You’re close to retirement (the benefits may not justify the costs)

The Three-Pillar System

Germany’s retirement system is often described as having three pillars:

First Pillar: State Pension (Gesetzliche Rente)

• Mandatory for employees, optional for freelancers
• Provides a base level of retirement income
• Funded by current workers’ contributions

Second Pillar: Employer-Sponsored Plans (Betriebliche Altersvorsorge)

• Not available to most freelancers
• Includes company pension plans and occupational pension schemes

Third Pillar: Private Retirement Savings (Private Altersvorsorge)

• This is where freelancers focus most of their efforts
• Includes Riester, Rürup, private pensions, and other investment vehicles
• Offers tax advantages and flexibility

Private Retirement Options for Freelancers

As a freelancer, your retirement planning will focus primarily on the third pillar - private retirement savings. Here are your main options:

1. Riester Pension (Riester-Rente)

The Riester pension is a state-subsidized private pension plan available to anyone who pays into the state pension system (including voluntary contributors).

How It Works:

• You contribute to a private pension plan
• The government provides subsidies and tax benefits
• Maximum annual contribution: 2,100 EUR (or 4% of your previous year’s income, whichever is lower)
• Government subsidy: Up to 175 EUR per year, plus 300 EUR per child
• Contributions are tax-deductible up to certain limits

For Freelancers:

• You must make voluntary contributions to the state pension to be eligible
• The combination of subsidies and tax benefits can make it attractive
• However, the requirement to contribute to the state pension may not be worth it for all freelancers

Pros:

• Government subsidies
• Tax benefits
• Guaranteed minimum return
• Protected from creditors

Cons:

• Must contribute to state pension to be eligible
• Limited flexibility
• Often high fees
• Payouts are taxed in retirement

2. Rürup Pension (Basisrente)

The Rürup pension (also called Basisrente) is specifically designed for self-employed individuals and offers significant tax advantages.

How It Works:

• Private pension plan for self-employed people
• Contributions are fully tax-deductible (up to certain limits)
• Maximum deductible: 25,639 EUR per year (2025)
• Payouts are taxed in retirement, but typically at a lower rate

For Freelancers:

• No requirement to contribute to state pension
• High tax deduction limits make it attractive for high earners
• Contributions reduce your taxable income immediately

Pros:

• High tax deductions (up to 25,639 EUR/year)
• No state pension contribution required
• Protected from creditors
• Can significantly reduce current tax burden

Cons:

• Payouts are taxed in retirement
• Limited flexibility (can’t access funds before retirement)
• Often high fees
• Complex product with many variations

Who Should Consider Rürup:

• High-earning freelancers (above 60,000 EUR/year)
• Those in high tax brackets
• People who want to reduce current tax burden
• Those who don’t need access to funds before retirement

3. Private Pension Insurance (Private Rentenversicherung)

Private pension insurance is a flexible option that doesn’t require state pension contributions or offer government subsidies.

How It Works:

• You pay regular premiums to an insurance company
• The company invests your money and pays out a pension in retirement
• You can choose between guaranteed returns and investment-linked products
• Payouts can be lump sum or regular payments

For Freelancers:

• No special requirements
• Flexible contribution amounts
• Can be combined with other retirement savings

Pros:

• Flexibility in contributions
• No special requirements
• Can choose investment strategy
• Protected from creditors

Cons:

• No government subsidies
• Limited tax benefits
• Often high fees
• Returns may be lower than direct investments

4. ETF-Based Retirement Savings (ETF-Sparplan)

Many freelancers choose to invest directly in ETFs (Exchange-Traded Funds) for retirement, bypassing traditional pension products.

How It Works:

• You invest regularly in low-cost index funds (ETFs)
• Typically through a brokerage account (Depot)
• You control the investment strategy
• Funds can be accessed before retirement (though this defeats the purpose)

For Freelancers:

• Maximum flexibility
• Low fees
• Potentially higher returns
• Full control over investments

Pros:

• Very low fees (often 0.1-0.5% per year)
• High flexibility
• Potentially higher returns
• Transparent and easy to understand
• Can be tax-efficient with proper planning

Cons:

• No government subsidies
• No tax deductions (except through special accounts)
• Requires discipline and financial knowledge
• Market risk
• Not protected from creditors

Who Should Consider ETF Savings:

• Financially literate freelancers
• Those comfortable with investment risk
• People who want low fees and high flexibility
• Long-term investors (10+ years)

5. Real Estate Investment

Many freelancers in Germany invest in real estate as a retirement strategy.

How It Works:

• Purchase property (residential or commercial)
• Rent it out for income
• Property value may appreciate over time
• Can provide rental income in retirement

For Freelancers:

• Can be combined with other retirement strategies
• Provides diversification
• Can offer tax benefits (depreciation, etc.)

Pros:

• Tangible asset
• Potential for rental income
• Property appreciation
• Tax benefits (depreciation, etc.)
• Inflation hedge

Cons:

• Requires significant capital
• Illiquid investment
• Management responsibilities
• Market risk
• Maintenance costs

Creating Your Retirement Strategy

Building an effective retirement strategy requires considering multiple factors:

1. Calculate Your Retirement Needs

First, estimate how much you’ll need in retirement:

Basic Calculation:

• Estimate your desired monthly income in retirement
• Multiply by 12 for annual needs
• Multiply by 25-30 for total needed (using the 4% rule)
• Adjust for inflation

Example:

• Desired monthly income: 3,000 EUR
• Annual needs: 36,000 EUR
• Total needed: 36,000 × 25 = 900,000 EUR
• With 3% inflation over 30 years: ~2.2 million EUR

2. Determine Your Savings Rate

Based on your retirement needs, calculate how much you need to save:

Factors to Consider:

• Current age and retirement age
• Expected investment returns
• Inflation
• Other income sources (state pension, rental income, etc.)

General Guidelines:

• Save 15-20% of income for retirement
• Start as early as possible
• Increase savings rate as income grows

3. Choose Your Mix

Most freelancers benefit from a diversified approach:

Recommended Mix:

• Rürup pension: 30-50% (for tax benefits, if high earner)
• ETF savings: 30-50% (for growth and flexibility)
• Real estate: 0-20% (if you have capital and interest)
• Cash reserves: 6-12 months expenses (for emergencies)

4. Start Early and Be Consistent

The most important factor in retirement planning is time. Starting early gives compound interest time to work:

Example of Starting Early:

• Starting at 25: 200 EUR/month for 40 years at 6% = ~460,000 EUR
• Starting at 35: 200 EUR/month for 30 years at 6% = ~200,000 EUR
• Starting at 45: 200 EUR/month for 20 years at 6% = ~92,000 EUR

Tax Considerations

Understanding the tax implications of different retirement savings options is crucial:

Tax-Deductible Contributions

Rürup Pension:

• Fully deductible up to 25,639 EUR/year (2025)
• Reduces current taxable income
• Payouts taxed in retirement (typically at lower rate)

Riester Pension:

• Partially deductible
• Government subsidies
• Payouts taxed in retirement

ETF Savings:

• Not deductible (unless in special accounts)
• Capital gains tax on profits
• 801 EUR/year tax-free (for single filers)

Retirement Tax Planning

In retirement, your tax situation changes:

• State pension: Fully taxable
• Private pensions: Taxed as income
• Investment income: Subject to capital gains tax
• Lower overall income may mean lower tax bracket

Common Mistakes to Avoid

Many freelancers make these retirement planning mistakes:

1. Not Starting Early

• The biggest mistake is waiting
• Even small amounts add up over time
• Start with whatever you can afford

2. Not Saving Consistently

• Irregular income makes this challenging
• Set up automatic transfers
• Treat retirement savings as a fixed expense

3. Relying Only on State Pension

• As a freelancer, you may not qualify
• Even if you do, it may not be enough
• Diversify your retirement savings

4. Ignoring Tax Benefits

• Rürup can significantly reduce current taxes
• Don’t leave tax benefits on the table
• Consult a tax advisor

5. Not Reviewing Regularly

• Review your strategy annually
• Adjust as income changes
• Rebalance investments as needed

Getting Professional Help

Retirement planning can be complex. Consider professional help:

Financial Advisors:

• Can help create a comprehensive plan
• Understand tax implications
• Can recommend specific products
• Look for fee-only advisors (not commission-based)

Tax Advisors:

• Understand tax benefits of different options
• Can help optimize your strategy
• Important for Rürup and other tax-advantaged plans

Online Resources:

• Comparison websites for pension products
• Investment calculators
• Retirement planning tools

Action Steps

Here’s a practical action plan to get started:

1. This Week:

• Calculate your retirement needs
• Determine your current savings rate
• Research Rürup pension if you’re a high earner

2. This Month:

• Open a brokerage account for ETF savings
• Set up automatic monthly transfers
• Consult a tax advisor about Rürup

3. This Year:

• Start contributing to your chosen retirement vehicles
• Review and adjust your strategy
• Increase contributions as income allows

4. Ongoing:

• Review annually
• Increase savings rate with income growth
• Stay informed about changes in pension laws

Conclusion

Retirement planning as a freelancer in Germany requires more active involvement than for employees, but it also offers more flexibility and control. The key is to start early, save consistently, and take advantage of tax-advantaged options like Rürup pensions.

A diversified approach combining tax-advantaged products (like Rürup) with flexible investments (like ETFs) typically works best for most freelancers. The exact mix depends on your income, age, risk tolerance, and retirement goals.

Remember: The best retirement plan is the one you actually implement. Start with whatever you can afford, even if it’s just 50 EUR per month. The important thing is to start and to be consistent. Your future self will thank you.

Need Help?

If you have questions about retirement planning or need help understanding your options, we’re here to help. Contact us by email at support@solobooks.de, chat with us in the app, or visit our Help Center for more guides.

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Last updated: January 20, 2026