A tax deduction isn't the same as a good investment. So before signing, it's worth knowing the payout rules, the fees, the investment options and what happens if you stop paying in or move abroad.
The short answer
- Basisrente / Rürup is designed to pay a lifelong pension.
- Qualifying contributions are tax-deductible as retirement expenses, up to a yearly overall maximum that also counts your other basic-pension contributions.
- In 2026, the cited maximum is €30,826 for single taxpayers and €61,652 for eligible jointly assessed married couples; this is not necessarily extra room on top of your statutory pension contributions. 3
- Contributions cannot normally be cashed out as a flexible lump sum.
- Benefits received later are subject to applicable pension taxation. For pension commencements in 2026, the statutory taxable share is generally 84%, which is not an 84% income-tax rate. 2
- Fees and the lack of flexibility can eat into the value of the tax relief. 1
What you're actually signing
A Rürup contract is a form of qualified private basic retirement provision. Insurers may offer traditional guaranteed versions or fund-linked investment versions. In fund-linked versions, your contributions may be invested in selected funds, potentially including ETFs, but the product is still a pension contract, not a normal brokerage Depot. 12
The core promise is a lifelong pension later, on the contract's terms. Taking the money out before retirement is generally not possible. 1
The tax break, with the 2026 limits
Contributions to qualifying basic retirement arrangements are deductible as Sonderausgaben within the statutory maximum. The same overall deduction framework includes relevant statutory pension-insurance contributions and other qualifying basic old-age provision contributions. 3
Maximum deduction amount for 2026:
| Tax assessment situation | Annual upper limit for relevant basic retirement contributions |
|---|---|
| Single taxpayer | €30,826 |
| Eligible joint assessment of spouses | €61,652 |
Here's the catch: these are overall ceilings, not an amount everyone can deduct for a Rürup contract on top. If your statutory pension and other qualifying contributions already use part of the limit, the remaining available scope may be smaller. 3
A simplified example
Say €3,000 of a hypothetical person's Basisrente contributions qualify for deduction within the available ceiling, and the illustration uses a 35% marginal income-tax rate across the relevant deduction interval.
€3,000 × 35% = €1,050 in hypothetical income-tax reduction.
This is only a teaching example. Your real saving depends on the progressive tariff, all your deductions, your filing status and your other income. Multiplying by a marginal rate isn't a tax calculation. And remember: the contribution still costs you money, and the pension is taxed later.
How the pension is taxed later
Germany applies deferred taxation to qualifying basic pensions. Contributions can receive tax relief during the savings phase while a legally defined share of pension payouts is included in taxable income during retirement. For those starting qualifying retirement benefits in 2026, the taxable share is generally 84%, subject to detailed tax rules. 1
That doesn't mean "the state takes 84% of your pension". An included taxable share enters the income-tax calculation; the actual tax depends on total taxable retirement income, allowances, residency and applicable rates.
The biggest downside: your money is locked in
Lack of liquidity. If you later need money for a home, a period without work, a move or an emergency, you can't use the saved value like a regular ETF Depot. The law and contract restrict access, borrowing against it and transferability. 12
Depending on the contract, you may be able to suspend further contributions (beitragsfrei stellen), but administrative costs can continue. 1
Want the nerdy details?The rules, the exact numbers and the edge cases. Open it whenever you're curious.- What happens to it when you die?
- Self-employed? Read this before signing
- Questions to ask about costs and investments
What happens to it when you die?
Don't assume the remaining 'balance' turns into ordinary cash your heirs inherit. A Basisrente is fundamentally built around the policyholder's lifetime pension. Eligible survivor benefits may exist if they are specifically built into a qualifying contract, often at a cost. The suitability of survivor protection depends on family circumstances. 14
Self-employed? Read this before signing
People without standard compulsory employee pension contributions may find the Basisrente deduction framework relevant. That doesn't make Rürup the right answer for every freelancer. Consider income fluctuations, liquidity needs, existing retirement provision, family protection and contract fees.
A long-term pension contract is difficult to unwind when business income falls. Ask how payments can be paused, what the guaranteed and projected retirement outcomes mean, and how annual fees are charged.
Questions to ask about costs and investments
Before you compare providers, ask for clear answers on:
- Upfront costs and commissions where charged.
- Ongoing administration and insurance costs.
- Fund expense ratios and available ETF/fund selection.
- Investment guarantees and how much market participation they restrict.
- Pension conversion and annuity calculation terms.
- Availability and cost of survivor benefits.
- Rules for pausing contributions and contract changes.
A headline 'tax saving' that leaves out decades of product costs is only half the picture. Germany's consumer centres explicitly warn that high costs and limited flexibility often impair the appeal of Basisrente products. 1
Rürup or a regular ETF Depot?
| Topic | Rürup / Basisrente | Ordinary ETF Depot |
|---|---|---|
| Purpose | Lifetime retirement pension | Flexible securities ownership |
| Income tax on contributions | Potential qualified deductions within limits | No general Rürup-type deduction for purchasing ETFs |
| Access to capital | Generally restricted; no ordinary cash withdrawal | Generally possible to sell holdings, subject to market and tax consequences |
| Retirement payouts | Lifetime pension under contract | You choose withdrawals; no automatic lifetime pension guarantee |
| Investment selection | Contract-dependent | Depends on broker and market access |
| Fees | Insurance, administration, investments, potentially commissions | Broker, trading, fund and other applicable costs |
| Estate planning | Contract/legal survivor rules | Securities normally form part of the estate subject to applicable law |
This compares how the two work. It isn't advice to buy or avoid a specific product.
And if you leave Germany?
Moving abroad doesn't turn a Basisrente contract into a cash account. The contract and pension rules remain relevant, while tax residence, applicable treaty provisions and provider administration can complicate payments abroad. If you think you might retire outside Germany, check this before you sign.
Rürup questions people ask
Can I withdraw my Rürup savings to buy a house?
As a rule, no. Basisrente isn't meant to be a savings account you can dip into. 1
Does Rürup have a guaranteed 35% tax benefit?
No. Tax relief depends on deductible amounts and individual income-tax circumstances.
Can a Rürup policy invest in ETFs?
Some fund-linked policies permit selected ETFs, depending on the insurer and contract. Holding ETFs inside doesn't remove the pension contract's restrictions.
Does the maximum contribution deduction mean everyone should contribute €30,826?
No. It's a legal ceiling, not a recommendation or a savings target. 3
Check yourself
Can you take your Rürup savings out early as a lump sum?
Video lesson · In the makingRürup pension: the trade-offs
Official sources
- Verbraucherzentrale, Rürup pitfalls and restrictions
- Deutsche Rentenversicherung, Rürup glossary
- Deutsche Rentenversicherung, 2026 deduction upper limits
- Deutsche Rentenversicherung, basis pension and survivor protection
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We explain how the German rules work in general. This isn't personal tax, legal or financial advice, and your bank, employer or tax office may treat your own case differently.