What assumptions are behind our calculations?

A model calculation is only as good as its assumptions are transparent. This page sets out how our calculator works. You will also find the short technical version under Sources and methodology.

Month-by-month projection

• The savings contribution is paid in at the start of the month.
• The yearly return is converted into a monthly return: monthly factor = (1 + yearly return) to the power of 1/12.
• The assets are carried forward month by month with this factor.

Costs

Ongoing costs are applied as a yearly share of the assets and deducted pro rata each month at the end of the month: factor = (1 − costs) to the power of 1/12. We take the return to be before costs; costs are deducted at this one point only. Acquisition, switching and payout costs are not included.

The effect of costs is the difference between the final capital and the same calculation without costs. It therefore also includes the compound growth you miss out on.

Yearly increase and inflation

• A yearly increase raises the savings contribution after every twelve months.
• Purchasing power = nominal capital ÷ (1 + inflation) to the power of the number of years.

Return scenarios

The three values are hypothetical calculation assumptions that we have set centrally and can adjust. They are not forecasts and are not derived from any particular investment. Actual results can be higher or lower; losses are possible.

Allowances

• The basis is the Retirement Provision Reform Act (Altersvorsorgereformgesetz) in its promulgated version; it applies from the contribution year 2027.
• As a simplification, allowances are credited at the end of the respective contribution year. In reality they are only paid after an application and a check.
• The rules are assumed to remain unchanged over the whole term.
• The child allowance (Kinderzulage) is applied for the stated number of years and equally for all children.
• Planned children count for 18 years from the year in which you reach the age you entered. Child benefit is paid at least until 18, often longer – we calculate cautiously.
• The career starter bonus (Berufseinsteigerbonus) is taken into account once, in the first year, if the age entered is under 25.
• Not calculated: special expenses deduction (Sonderausgabenabzug), indirect eligibility, taxation of the payouts.

Tested, not just claimed

The calculation logic is safeguarded by automated tests. Among other things, they compare the results with the closed-form formula for the future value of an annuity due and check special cases such as a 0% return and very short and very long terms.