Rürup Pension Plans for Freelancers and Employees

Saving tax on your way to a pension

Freelancers, self-employed and employees looking for a clever way to save for a pension AND save tax may well find the so-called “Rürup Pension“ attractive.

Since the 1st January 2005 the State has made it possible to offset a good part of a Rürup Pension Plan against tax.

Singles can invest up to €20,000 p.a. and married people up to €40,000 p.a. either on a monthly basis or as one-offs or on an irregular basis.

In 2012 74% of the premiums are tax deductible, rising 2% a year to 100% in 2025. (§ 10Abs.Nr.2 EStG of German tax law)

If you invest: €10,000 in a Rürup pension and your tax rate is 40%

Example: €10,000 x 74% x 40% tax rate= € 2,960 tax saving

In other words, the Finanzamt helps you with € 2,960 towards building up an old age pension.

What other advantages are there?
  • It's the only pension plan with tax advantages for freelancers and self-employed
  • Policyholders are protected from insolvency laws
  • Policies cannot be means-tested for Hartz IV applications
  • Additional, irregular payments into the pension can be made at any time
  • Insurance companies offering a Rürup plan must guarantee a life-long pension
  • In case of death of the policyholder, the spouse or children can receive a monthly pension

An important plus point is this is a genuine old age pension plan and not a personal savings plan to buy a new car or things like that! A pension payout cannot begin until at least the 63rd birthday (rule commencing January 2012).

There are different models depending on your personal wishes. We can also calculate the tax savings you would make in the insurance period and what kind of monthly pension you would draw.

Tip: In many cases, an occupational disability insurance (the German Berufsunfähigkeitsversicherung) is not tax deductible but if combined with a Rürup Pension it IS!