Pension & Retirement in Germany
How the German pension system works for Indians — the three pillars, what you pay in, and the big question: do you get your money back when you leave, or keep a pension you can draw in India?
Retirement money, even if you don't retire here
Every payslip sends 9.3% of your gross into the German state pension. Whether you stay or return to India, that money is not lost — here is how to get the most from it.
Disclaimer: This page is for general informational purposes only and does not constitute financial, legal, or professional advice. We are not licensed financial advisors. All figures shown are approximate and may change. Always consult a qualified financial advisor and verify with official sources such as bafin.de, bundesfinanzministerium.de, or your local Finanzamt before making any financial decisions.
Insurance, bank account, tax & onboarding help in 7 languages — free, and we earn nothing for suggesting him.
State pension
Gesetzliche Rentenversicherung
The compulsory public system. 18.6% of your gross salary goes in (half from you, half from your employer) and funds today's retirees. You earn "points" that become a monthly pension for life.
Company pension
Betriebliche Altersvorsorge (bAV)
Optional, set up through your employer. You divert part of your gross salary (Entgeltumwandlung), saving tax and social contributions now; employers must add at least a 15% top-up on new plans.
Private provision
Private Altersvorsorge
Whatever you build yourself — Riester, Rürup/Basisrente, a private pension policy, or a plain ETF portfolio. The most flexible pillar, and the one most in your control if you might leave Germany.
Who pays the 18.6%?
Like health insurance, the state-pension contribution is split evenly with your employer — you only ever see your half on the payslip.
On gross salary up to a ceiling of €8,450/month (2026). Earnings above the ceiling do not add pension.
How it is earned
You collect "points" (Entgeltpunkte). Earning the national average salary for one year = 1 point.
What a point is worth
Each point pays €42.52/month of pension for life (from July 2026). 10 average years ≈ €425/month.
When you can claim
The standard age is rising to 67. You need at least 5 years (60 months) of contributions to qualify at all.
Beitragserstattung — a refund of your own contributions.
- •For non-EU nationals who leave Germany and the EU for good
- •Only your employee half is refunded — never the employer half
- •You must wait 24 months after leaving before applying
- •Generally only if you have under 5 years (60 months) of contributions
- •Taking it wipes out all pension rights for those years
Hold your entitlement and claim a pension from age 67.
- •Once you reach 5 years, you have a lifelong German pension
- •The India–Germany agreement lets it be paid to you in India
- •Your Indian and German periods can be added together (totalisation)
- •No 24-month wait, and you never lose the employer-funded value
- •Usually the better deal the more years you have contributed
🇮🇳 The India–Germany Social Security Agreement
In force since May 2017, the comprehensive agreement is what makes keeping your pension worthwhile. It does three things:
Totalisation
Add your Indian (EPF) and German contribution periods together to meet minimum qualifying times.
Pension export
Receive your German pension while living in India — and vice versa.
Certificate of coverage
Posted workers stay in their home system for up to 48 months, avoiding double contributions.
Option A — Reclaim it (leave for good)
≈ €15,624
A one-off refund of your own contributions (the employer's half is not refunded), payable 24 months after you leave Germany and the EU.
Option B — Keep it (pension for life)
≈ €138/mo
An estimated monthly pension from age 67, for life — payable to you in India under the Social Security Agreement. You need 5 years total to unlock this.
For scale: the refund of €15,624 equals only about 114 months of the pension you would otherwise draw for the rest of your life.
Rough estimates using 2026 figures (18.6% contribution, €42.52/month per pension point, ~€4,329 average monthly income, €8,450/month ceiling). Real amounts depend on your full earnings history and future adjustments. Always confirm with Deutsche Rentenversicherung before deciding.
Which are portable if you leave?
The single most important question for internationally mobile Indians.
Reclaim your half if you leave with under 5 years — or keep it and draw a pension in India (agreement).
Yours once vested; payout and transfer rules vary by scheme and provider.
State subsidies must be repaid if you move permanently outside the EU. Rarely worth it if you may leave.
Locked until 62+, no lump-sum withdrawal, cannot be surrendered for cash. Very illiquid.
Fully yours and fully portable — you keep it wherever you live. Often the best third pillar for the mobile.
Company pension (bAV)
Worth taking if your employer contributes meaningfully — you divert gross salary (saving tax + social contributions now) and it is taxed later on payout. Ask HR whether a plan and top-up are offered before opting in.
The portable alternative
If your future is uncertain, a plain low-cost ETF Sparplan is often the most sensible third pillar: fully yours, fully portable, and flexible. See the stock & ETF guide.