Rürup Pension Germany: Deduct Your Base Pension

If you’re self-employed in Germany, no employer is building a company pension for you. The Riester subsidy is usually off-limits. And you pay into the statutory pension only if you choose to. So how do you save for retirement without handing the tax office (Finanzamt) more than you have to every year? For many, the answer is the Rürup pension — officially the Basisrente (“base pension”). Its biggest lever is a tax one, and a surprising number of people leave it on the table.

In short: Contributions to a Rürup pension (Basisrente) have been 100% deductible as special expenses (Sonderausgaben) since 2023, under § 10 EStG (the German Income Tax Act). The 2026 ceiling is around €29,000 (single) and around €58,000 (married, joint assessment). The trade-off: deferred taxation in retirement and no lump-sum option — only a lifelong monthly annuity. It’s especially attractive for the self-employed, who typically lack both the Riester subsidy and a company pension.

What is the Rürup pension (Basisrente)?

The Rürup pension is a private, funded retirement product that the German tax system treats like the statutory pension. It’s named after economist Bert Rürup; the official term is Basisrente. The deal is simple: you give up flexibility, and in exchange you get a substantial tax break while paying in.

In practice that means three things:

• Payout starts from age 62 at the earliest (contracts from 2012 on) and only as a lifelong annuity.
• The capital is not inheritable (except via an add-on rider for a spouse and children who qualify for child benefit), not transferable, not pledgeable, and not cancellable.
• In return, the contributions are deductible as special expenses — which is what makes it a tax-saving tool.

Unlike a savings account or an ETF portfolio, this isn’t only about returns. It’s about the immediate tax effect today.

Why it matters most for the self-employed

Employees usually have several subsidized retirement paths: the statutory pension (with an employer contribution), a company pension (bAV) via salary conversion, and — if they’re compulsorily insured — the Riester subsidy. The self-employed often have none of these:

• No Riester subsidy: Riester’s base and child allowances almost always require compulsory membership in the statutory pension. Purely self-employed people don’t meet that condition.
• No company pension: without an employer, there’s no salary conversion and no employer top-up.
• Often no statutory pension: many self-employed people aren’t compulsorily insured and would have to pay in voluntarily.

For them, the Basisrente is frequently the only state-supported retirement vehicle, where the special-expenses deduction stands in for the missing subsidies. If you freelance, see our overview for freelancers — the Rürup pension is one of the few levers employees don’t have over you.

Deducting the Rürup pension: how the special-expenses deduction works

Basisrente contributions count as retirement-provision expenses (Altersvorsorgeaufwendungen) and are deducted as special expenses under § 10 (1) no. 2 EStG. Until 2022 the deduction was only partial and rose a couple of percentage points each year. Since 2023, the rule is: 100% of contributions are deductible (up to the ceiling). The full deductibility originally planned for 2025 was brought forward.

So every euro you pay into the Rürup pension lowers your taxable income by that euro — up to the cap.

The 2026 ceiling

The deductible ceiling is tied to the maximum contribution to the miners’ statutory pension insurance (knappschaftliche Rentenversicherung) and rises each year. For 2026 it is:

• around €29,000 for single filers
• around €58,000 for jointly assessed married couples (double the amount)

For the self-employed, the full Basisrente contribution goes into this ceiling. One caveat: if you also pay into the statutory pension or a professional pension fund (Versorgungswerk), those count too — the ceiling applies to all retirement-provision expenses combined. But for most self-employed people without parallel contributions, the limit is so high it’s rarely reached in practice.

A worked example

Take Lena, a self-employed graphic designer with an annual profit of €65,000. She pays €1,000 a month — €12,000 a year — into her Basisrente.

• Paid in: €12,000
• Deductible (100%, below the ~€29,000 ceiling): €12,000
• Her marginal tax rate is roughly 40%
• Tax saved: about €4,800 a year

Lena isn’t just building retirement savings — she’s also clawing back nearly €5,000 in tax that would otherwise have gone straight to the Finanzamt. Over ten years, that compounds into a five-figure sum.

Where you enter it

Contributions go in the Anlage Vorsorgeaufwand (pension-provision annex), under Altersvorsorgeaufwendungen (Basisrente). Your basis is the annual certificate from your provider listing what you paid in. In ELSTER, Germany’s official online tax-filing portal, you’ll find it under Vorsorgeaufwendungen.

Deferred taxation: the catch in retirement

Today’s tax break isn’t a gift — it’s a tax deferral. The Basisrente uses deferred taxation under § 22 no. 1 EStG: you save while paying in, and you pay while it pays out.

The taxable share of your future pension depends on your retirement start year and rises gradually; the plan is for pensions starting in 2058 or later to be fully taxed. For most people this is still a good deal, because:

• In retirement, taxable income is often lower than during working life, so a lower rate applies.
• The tax break during the saving phase works immediately and can be reinvested for years.

Still, factor the payout phase into your math. The Rürup pension shifts your tax burden; it doesn’t erase it.

No lump-sum option: what you give up

The Basisrente is deliberately inflexible — that’s the price of the full special-expenses deduction:

• No lump sum. There’s no capital option; it pays out only as a lifelong monthly annuity.
• Not cancellable. You can pause contributions, but you can’t close it and take the money back.
• Not inheritable — unless you add a rider for a spouse and children who qualify for child benefit (which costs return).
• Not transferable, not pledgeable.

If you need maximum flexibility, a plain ETF savings plan serves you better. But if you’re saving long-term for retirement anyway and face a high tax rate today, that same rigidity is exactly what unlocks the tax break.

Rürup vs. Riester vs. company pension

Broadly: employees with children often look at Riester; employees generally at the company pension (bAV). For the self-employed and high earners, the Rürup pension is usually the strongest tax lever. Employees who want to top up their retirement provision can find more paths in our overview for employees.

Common mistakes

1. Contributions not entered at all. Without the Anlage Vorsorgeaufwand, the Finanzamt doesn’t know about your Basisrente — the deduction vanishes.
2. Not waiting for the annual certificate. Enter what you actually paid, not an estimate.
3. Blowing the ceiling with other contributions. Paying into a Versorgungswerk or the statutory pension too? Add it all up.
4. Ignoring the payout phase. Deferred taxation belongs in every honest calculation.
5. Expecting a lump sum. If you’re hoping for a one-off payout, you picked the wrong product.
6. Starting too late. The tax break recurs every year — the earlier you start, the more years you benefit.

How Restio helps

The Rürup pension is a classic form-filling task: enter the contribution correctly once, and the tax break runs every year. Restio takes the tedious steps off your plate:

• Scan documents — photograph your annual certificate, and Restio reads the contributions and assigns them to retirement-provision expenses.
• Tax questions with the paragraph and the number — ask “How much Rürup can I deduct in 2026?” or “Does my Versorgungswerk count?” and get an answer with the § and a concrete figure, in English or German.
• Deadline watcher — Restio reminds you of your filing deadline in good time, so the deduction doesn’t lapse.

More on the Restio homepage.

Get Restio and claim every deductible euro of your retirement provision.

Bottom line

The Rürup pension is no return miracle — but it’s a powerful tax tool. Since 2023 your contributions are 100% deductible, and the 2026 ceiling sits at around €29,000 (single) or €58,000 (married). The price is flexibility: deferred taxation in retirement and no lump-sum payout. For the self-employed, who lack both Riester and a company pension, it’s often the best subsidized route to retirement. Enter the contributions and you save immediately; forget them and you leave four figures on the table every year.

Further reading

• § 10 EStG — special expenses (retirement-provision expenses)
• Federal Ministry of Finance: income tax and retirement provision
• ELSTER: entering pension-provision expenses