In short
When you are old, you get your saved money back bit by bit. You have to hand over part of what you then receive to the state as tax.
Last checked: 11 October 2026 · 5 min read · RenteKannMehr editorial team
Now in more detail
At the end of the saving phase, the capital you have built up is turned into a regular income. For subsidised contracts, the law lays down how this may be done.
When the payout begins
For contracts taken out from 2027, the following applies: the payout begins at the age of 65 at the earliest – or sooner if you are already drawing an old-age pension from a statutory system – and at the age of 70 at the latest.
The forms of payout
| Form | How it works | Points to consider |
|---|---|---|
| Lifelong annuity (Leibrente) | All of the capital is converted into a pension that is paid until the end of your life | Also covers a very long life; the amount of the pension depends on the provider's calculation |
| Pension plus variable part | 80% is converted into a pension; the rest stays invested and is paid out in varying amounts | Slightly more opportunity, slightly less predictability |
| Payout plan (Auszahlungsplan) | The capital stays invested and is paid out in instalments; the plan ends at the age of 85 at the earliest | The amount varies with investment performance; once the plan has ended, nothing more is paid from it |
In addition, up to 30% of the capital can be paid out in one go at the start. Very small pensions may be settled in a single amount.
Longevity
A payout plan can end while you are still alive. If you have no further income from the contract at the age of 85, you will then need other sources. That is the essential difference from a lifelong pension.
Deferred taxation
Subsidised retirement saving is taxed on a deferred basis (nachgelagerte Besteuerung): in the saving phase, allowances and the special expenses deduction (Sonderausgabenabzug) ease your burden; in return, the later payouts are taxable at your personal tax rate, in so far as they are based on subsidised contributions and allowances. In retirement, the tax rate is often lower than during working life – but that is not certain.
Early withdrawal
If subsidised capital is not used for retirement provision, the law calls this harmful use (schädliche Verwendung). Allowances and tax advantages then have to be paid back as a rule.
What our calculator cannot do here
Alongside the modelled final capital, the calculator shows only a rough monthly payout: it spreads the final capital evenly over the months up to age 85 – without further growth. It calculates neither a lifelong pension nor taxes or social security contributions on the payouts, because that depends on your contract and your personal situation in retirement.
More questions?
If you have more questions, talk to a personal adviser near you. They can look at your situation in detail. Asking is free and without obligation.