If you’re a U.S. citizen living or working in Germany, you’ve probably wondered: Does Germany have Social Security? The short answer is yes. Germany’s version is the statutory pension administered by Deutsche Rentenversicherung (DRV).
This guide explains how pensions work in Germany, what the pension age is, how much you might receive, and how U.S.–Germany coordination works.
Research tip: It pairs with our broader guide covering the financial considerations of moving to Germany.
<iframe width="560" height="315" src="https://www.youtube.com/embed/1-QVfQv5m2M?si=g3Kcoid31T_lYFP4" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>Germany’s “Social Security” Is the Statutory Pension (DRV)
Germany organizes retirement income into three pillars:
- Pillar 1: Statutory pension (Deutsche Rentenversicherung, DRV): Mandatory for most employees; benefits are calculated with a points system and an annually updated point value (“aktueller Rentenwert”). This is the closest analogue to U.S. Social Security.
- Pillar 2: Occupational pension (bAV): Includes voluntary and state-subsidized personal and occupational pension schemes, such as the Riester pension and company pension schemes (betriebliche Altersvorsorge). These are designed to supplement the first tier.
- Pillar 3: Private/individual pensions: Consists of all other non-state-subsidized individual savings and pension plans
How Does Pension Work in Germany? (Points, Contributions, Taxes)
Employees generally pay into DRV automatically through payroll; employers contribute too. Self-employed people may have different participation routes depending on their profession and elections.
The points system, simply explained
Germany’s statutory pension system (“gesetzliche Rentenversicherung”) is based on a points model. Each year, you earn pension points based on how your covered income compares to the average German income for that year.
If you earn exactly the average income, you receive one pension point. Earning half the average income gives you 0.5 points, while earning twice the average income grants you 2 points,up to a legal maximum.
Your future pension is calculated using the following formula:
Total lifetime points × Current point value (“aktueller Rentenwert”)
As of 1 July 2025, each point is worth €40.79 per month (before taxes and statutory deductions).
To put this into perspective, the average income in 2025 was €50,493, while the contribution assessment ceiling, the maximum income counted toward statutory pension contributions, was €96,600 per year.
That means high earners can only accumulate pension points on a portion of their income. Even those earning well above the ceiling can earn a maximum of about 1.913 points per year, which currently corresponds to roughly €78 per month in future pension benefits.
In other words, for many U.S. expats or internationally mobile professionals earning above-average salaries, the statutory pension may only replace 20–25% of their actual income, underscoring the importance of private retirement savings and investment strategies.
Retirement timing
The standard pension age is moving to 67. You can usually retire early from 63, but there’s a permanent reduction of 0.3% per month you claim early (up to 14.4%). Delaying past the standard age increases benefits.
Tax note for Americans
DRV benefits are generally taxable in Germany when paid. Keep records for U.S. filing and FBAR/FATCA where applicable (this is not tax advice).
What Is the Pension Age in Germany?
For most people researching “what is the pension age in Germany,” the short answer is 67. However, the full picture depends on your year of birth and when you choose to start receiving benefits.
Germany is gradually increasing the regular retirement age to 67 for anyone born in 1964 or later. At this age, you can retire without any deductions and without continuing to pay contributions into the statutory pension system.
Those born before 1964 fall under transition rules
This means their official retirement age may be slightly earlier, depending on their exact birth year.
You can also claim early retirement, as early as age 63 in many cases, but your monthly benefit will be permanently reduced for each month you retire before your regular pension age. Conversely, deferring retirement beyond 67 can increase your pension amount.
The German Pension Insurance (Deutsche Rentenversicherung, DRV) publishes official age tables detailing the retirement age, early retirement deductions, and deferral supplements for each birth year. These tables are updated regularly and serve as the authoritative source for determining your individual retirement timeline.
How Much Is the State Pension in Germany? (And Why There’s No Flat “Basic” Pension)
If you’ve Googled “how much is state pension in Germany” or “how much is the basic state pension in Germany,” the key is that Germany doesn’t pay a single flat amount. Your result depends on points.
A simple, hypothetical example:
- 20 points × €40.79 = about €816/month (before taxes/health insurance contributions and any family-related supplements). Values are updated periodically, so check DRV’s current point value when planning.
Because benefits track your earnings history and contribution years, two people with different careers will receive very different pensions.
U.S.–Germany Social Security Coordination (Totalization)
The U.S.–Germany Totalization Agreement prevents double Social Security taxation and helps you qualify for benefits across both systems if your career spans the two countries.
Coverage rules – at a high level
Short U.S. assignments in Germany may remain under U.S. FICA with a Certificate of Coverage; direct German employment typically pays into DRV.
Combining credits
If you don’t meet the minimum coverage period in one country, combined U.S.–German credits can help you qualify in that system (benefit amounts are still based on each country’s own rules). The SSA explains certificates and claims procedures.
Company Pensions (bAV): Free Money—With Caveats
The betriebliche Altersversorgung (bAV) is an employer-sponsored pension on top of DRV. Common advantages include employer top-ups (“matching”) and potential payroll tax efficiencies.
What to evaluate before enrolling:
- Vesting and portability (what happens if you change employers – note that even if it’s technically possible to transfer an account, you may find doing so in practice extremely challenging).
- Costs and guarantees (some plans offer guarantees; many are investment-linked).
- Payout options and taxation at retirement.
For long-tenure employees, bAV can be a valuable second pillar—but read the plan documents carefully. When it comes to navigating foreign employer-sponsored retirement plans, Americans frequently run into the PFIC trap.
Private Pensions (Schicht 3): Privatrente, Basisrente (Rürup) & Riester
Privatrente / private Rentenversicherung (Schicht 3)
Flexible, after-tax contracts (including fondsgebunden/fund-linked policies). You typically have broader investment choices, beneficiary flexibility, and access options earlier than statutory retirement ages.
In Germany, taxation focuses on gains, with treatment depending on the holding period and payout form.
U.S. compliance considerations
If a policy holds non-U.S. funds/ETFs, U.S. persons may face PFIC issues—get cross-border tax advice to avoid unpleasant surprises.
Basisrente (Rürup)
Contributions can be tax-favored under German rules; assets are generally locked until age 62 and typically paid as a life annuity. Beneficiary options are narrower than Privatrente. Designed for long-term retirement income and often attractive for people with stable, high taxable income in Germany.
Riester
A state-subsidized product offering a basic allowance and child allowances when eligibility and minimum own contributions are met. Payout and residence conditions apply, so be sure to review details carefully.
Overview of what to review
- Access
- Tax incentive
- Beneficiaries
- U.S. tax considerations (e.g., PFIC risk for non-U.S. pooled funds in fund-linked policies).
Leaving Germany Early: Can You Get DRV Contributions Back?
Some people leave Germany after just a few years and ask about refunds. Under specific conditions, former contributors may apply to refund their employee DRV contributions—for example, after 24 months without German coverage and no right to voluntary insurance, plus nationality/residence rules. Note that even if you are eligible, processing can take time.
Alternatively, if you meet minimum coverage later (including via totalization), you can claim a German pension from abroad; keep your address and bank details updated with DRV.
U.S. Accounts You Already Have (401(k), IRA) & German Tax Reality
If you take 401(k) or IRA distributions while tax-resident in Germany, those withdrawals are generally taxable in Germany under treaty/residence rules.
The U.S.–Germany treaty and foreign tax credits help prevent double taxation, but there is a strategy to getting their application right.
In some cases, it may be appropriate to collaborate with a cross-border financial planner on how to build your drawdown plan. Conversations with these professionals can help you get clear on where you expect to retire and when you’ll need cash flows, among other important details. This is ideally done in coordination with cross-border tax and financial professionals.
Quick FAQs for Americans
Does Germany have Social Security?
Yes, the DRV is Germany’s state pension system.
What is the pension age in Germany?
Moving to 67, early from 63 with a 0.3% per month reduction (max 14.4%); delaying boosts benefits.
How much is one DRV point worth?
€40.79/month per point (from 1 July 2025), check DRV for updates.
Can I qualify with a short German career?
The Totalization Agreement can help combine U.S. and German credits to qualify.
Do employers have to offer bAV?
Not automatically. Employers in Germany are not required to offer a company pension scheme (betriebliche Altersvorsorge, bAV) on their own. However, employees have a legal right to request participation through salary conversion (Entgeltumwandlung). In that case, the employer must offer at least one implementation option, typically a direct insurance plan.
If the employer saves social security contributions as a result of the salary conversion, they must pass on at least 15% of those savings as an employer contribution to the employee’s pension plan.Qualifying Period (“Wartezeit”) and International Coordination
To receive benefits from the German statutory pension system, you must generally meet a minimum qualifying period of five years (Wartezeit). This includes both contribution periods and certain credited periods (such as child-rearing or unemployment periods).
For those who have lived or worked internationally, the good news is that insurance periods from other countries may count toward this requirement:
Within the EU/EEA and Switzerland
Under European social security coordination rules, periods of insurance, employment, or residence completed in other EU/EEA countries or Switzerland are aggregated toward your German qualifying period, even if you did not pay contributions directly into the German system.
Within the United States
The U.S.–Germany Social Security (Totalization) Agreement allows for aggregation of insurance periods in both countries. This prevents workers who have divided their careers between the U.S. and Germany from losing pension rights due to short contribution histories in either system.
Each country still calculates and pays its own pension based solely on contributions made under its respective system, but eligibility can be established through combined coverage. The agreement also simplifies the process: you can submit a single pension application in either country, and it will be recognized by both the DRV and the U.S. Social Security Administration. Each country will process the claim under its own laws and notify you separately.
Where This Fits in Your Move
Germany’s system is straightforward once you see the layers: the DRV as your base, workplace pensions (bAV) as a helpful add-on, and private options to fine-tune flexibility. If your career spans both countries, the U.S.–Germany agreement ensures years aren’t lost—so keep your DRV record, SSA earnings history, and any Certificates of Coverage up to date. Thoughtful planning around where you’ll retire and when you’ll draw income can make a real difference.
If you’d like a calm walkthrough of your situation—what to log, what to ignore, and how to line up benefits on both sides—consider booking a brief call with a cross-border planner. Sometimes a steady guide is all it takes to turn a complex set of rules into a plan you can trust.
References
- Deutsche Rentenversicherung (DRV) — Pension calculation basics and current point value (aktueller Rentenwert, €40.79 from 1.7.2025).
- DRV official guidance — Retirement ages, early/late retirement adjustments, and consumer pages on Riester allowances and eligibility.
- DRV official guidance — Refund of contributions for persons leaving Germany (conditions, timelines, and application process).
- BaFin — Overview of occupational retirement provision (bAV) and key features/plan types in Germany.
- Bundesministerium der Finanzen (BMF) — Basisrente (Rürup): tax treatment and policy characteristics for private old-age provision.
- U.S. Social Security Administration (SSA) — U.S.–Germany Totalization Agreement (coverage rules, Certificates of Coverage, and claims process).
Meet the Author
Arielle Tucker is a Certified Financial Planner™ and IRS Enrolled Agent with Connected Financial Planning. She's spent over a decade working with U.S. expats on U.S. tax and financial planning issues. She is passionate about working with U.S. expats and their families to help secure a financial future that is reflective of their core values. Arielle grew up in New York and has lived throughout the U.S., Germany, and Switzerland. Connected Financial Planning offers a complimentary introduction call for individuals and families seeking ongoing, comprehensive planning. You can schedule a call here.