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Social Security

What is Pension Insurance?

Pension insurance is your most important building block for old age – it costs you 9.3% of your gross salary, but secures you a lifelong pension. On €4,000 gross, you accumulate about 1 pension point per year, worth around €42.52 per month later (pension value from July 2026).

Pension insurance takes the largest share of your social contributions: 9.3% of your gross salary, with your employer contributing another 9.3%. On a €4,000 gross salary, that's €372 per month from your pay. In return, you build up entitlements to a lifelong pension.

How much pension will you get? That depends on the earnings points you've accumulated. For an average income (2026: €51,944), you earn one earnings point per year. On €4,000 gross per month (€48,000 annually), you earn around 0.92 points. Each point is currently (as of July 2026) worth around €42.52 in monthly pension. Work 45 years at an average income, and you'll reach the so-called standard pension (Standardrente) of around €1,913 per month (45 earnings points).

Reality check: the pension level is only around 48% of average income. From a €4,000 gross salary, you can expect roughly €1,500-1,700 in pension in old age (after 40 contribution years). You need to close the gap to your accustomed standard of living privately. Rule of thumb: save an additional 10-15% of your net income for retirement.

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Keywords: pension insurance germany, german state pension, retirement savings germany, earnings points germany, pension contribution germany