Understanding Basisrente: Tax-optimized retirement provision for your financial future
13 May 2025
4
Minutes
Katrin Straub
CEO at nextsure
Looking for a pension plan that is really worth it from a tax perspective? The basic pension, also known as the Rürup pension, offers attractive benefits, especially for the self-employed and high earners. Find out here how you can close your pension gap and reduce your tax burden at the same time.
The topic in brief and concise terms
The basic pension (Rürup pension) allows for significant tax deductions on contributions during the accumulation phase, up to 29,344 euros for individuals in the year 2025.
It is particularly suitable for the self-employed and high earners as it offers a lifelong pension and is secure from Hartz IV.
A termination with capital payout is not possible; survivor protection often needs to be agreed upon additionally.
Overview of Basic Pension: Key Facts for Quick Readers
The basic pension is a capital-funded pension insurance for private retirement provision. It was introduced in 2005 and complements the statutory pension as well as other forms of provision. Its contributions are tax-deductible as special expenses, which can lead to noticeable relief. [``] The payout is made exclusively as a lifelong monthly pension, starting at the earliest from the age of 62 (for contracts concluded after 31.12.2011). [`ü?`] A capital option, meaning a one-time payment of the entire capital, is not provided. [`ü?`] This structure is similar to the statutory pension insurance and is intended to ensure permanent provision in old age. For a more detailed view of the three tiers of retirement provision, read our detailed article. The basic pension is also secure against Hartz IV and protected from seizure during the saving phase. [``]
Maximize tax benefits: How to benefit from the basic pension
The greatest advantage of the basic pension lies in its tax benefits during the accumulation phase. Since 2023, contributions can be claimed as special expenses at a hundred percent. [`üä`] For the year 2025, the maximum deductible amount for single individuals is 29,344 euros and 58,688 euros for married couples. [`üä`] This amount also includes any contributions to the statutory pension insurance or professional pension schemes. [`äü`] The higher your personal tax rate, the greater the tax saving with the basic pension. An example: A self-employed individual with a taxable income of 70,000 euros pays 10,000 euros annually into a basic pension. This 10,000 euros reduces their taxable income in full, which means a tax saving of 4,000 euros with an assumed marginal tax rate of forty percent. Although the future pension will be taxed, the personal tax rate is often lower in retirement. [``] You can find information on the correct declaration in the tax return with us as well.
The tax treatment during the disbursement phase is as follows:
The taxable portion of the pension increases annually.
For pension entries in the year 2025, 83.5 percent of the pension is taxable. [`üä`]
This proportion increases by 0.5 percentage points for each new group of pensioners.
From the year 2058, new pensioners will have to tax their basic pension at a hundred percent. [`äü`]
This deferred taxation is a key feature of the basic pension.
Target Audience in Focus: Who is the basic pension particularly suitable for?
The basic pension is primarily aimed at individuals with a high tax burden and the desire for solid basic retirement provision. Particularly self-employed individuals and freelancers benefit, as they often have little or no entitlements from the statutory pension insurance. [``] For them, the basic pension represents an important pillar of retirement provision for the self-employed. High-earning employees can also close their pension gap with the basic pension and take advantage of tax benefits. [``] The flexibility in contributions is another advantage, as payments can often be adjusted to the respective income situation. [``] Many contracts allow for additional payments or a reduction in contributions. The basic pension can also be of interest to people who are close to retirement and wish to invest a larger sum in a tax-optimized manner for retirement, for example, through an immediate annuity. [`ö`]
Flexibility and Survivor Protection: What Happens in Special Life Situations?
A frequently discussed point about the basic pension is its flexibility. Termination of the contract with a payout of the capital is legally excluded. [`äü`] This serves to protect retirement assets. However, it is possible to make the contract non-contributory. [`äü`] This means that no further contributions are paid, but the existing capital continues to earn interest and is later paid out as a pension. Changing providers is not legally regulated and depends on the contract conditions. [``]
In the event of death, there are provisions for survivor protection, which often need to be agreed upon additionally:
Survivor's pension: Spouses or children eligible for child benefits (up to a maximum age of 25) can receive a pension. [``]
Refund of contributions: If the insured person dies during the accumulation phase, the contributions paid can be disbursed to the survivors. [``]
Pension guarantee period: If the insured person dies during the pension phase within an agreed guarantee period (e.g., ten years), the pension will continue to be paid to the survivors for the remaining time. [``]
Without such additional agreements, the accumulated capital is forfeited in the event of death for the benefit of the insurance community. [``] Therefore, a careful examination of survivor protection options is essential. Compare this with the possibilities of a private pension insurance.
Deepen expert knowledge: Legal foundations and design tips
The fiscal treatment of the basic pension is regulated in paragraph ten of the Income Tax Act (§ 10 EStG). [`ü?`] There, the conditions for tax recognition are established, such as lifelong pension payments and non-transferability without additional agreement. [`10`] Recent rulings, for example by the Federal Fiscal Court (BFH), have clarified aspects of pension taxation and contributed to the adjustment of legal regulations, such as the complete deductibility of contributions from 2023 to avoid double taxation. [`10`]
Our expert tip: When choosing a basic pension contract, pay attention not only to the costs but also to the flexibility of contribution payments and the options offered for survivor protection. A unit-linked pension insurance as a basic pension can offer higher return opportunities but also carries higher risks. [`ü?`] Consider the possibility of integrating an occupational disability supplementary insurance into the basic pension contract, the contributions of which can also be tax-deductible. [`ü?`] This can be a sensible addition to your Rürup pension. Seek comprehensive advice to find the optimal solution for your situation.
Comparison of basic pension: Distinction from Riester and private pension
The basic pension is part of the first tier of retirement provision, similar to the statutory pension insurance. The Riester pension belongs to the second tier and primarily promotes through allowances and secondarily through tax advantages. It is mainly intended for employees and families with children. The private pension insurance (third tier) offers the highest flexibility, for example in capital payout, but less or no state support during the accumulation phase. The basic pension scores with the highest tax deductible options during the accumulation phase, especially for high earners and self-employed individuals. In return, it is more rigid during the payout phase and regarding inheritance. An occupational pension scheme represents another important pillar, often supported by the employer. The choice of the right product largely depends on your individual life and income situation. A thorough analysis of your needs is crucial before making a decision for a particular form of insurance and tax.
Your next steps towards optimised retirement planning
The basic pension offers an attractive way to make government-supported provision for old age while taking advantage of significant tax benefits. Particularly self-employed individuals, freelancers, and employees with high incomes can reduce their tax burden and simultaneously build up a lifelong pension. Careful planning and selecting an appropriate contract that considers your individual needs in terms of flexibility and survivor benefits are important. Compare offers and pay attention to the cost structure and investment form, for instance, in a fund-linked variant. Remember, addressing your retirement provision early helps you effectively close any gaps in supply. Make optimal use of government support. We at nextsure are happy to help you analyse your individual situation and develop a suitable retirement strategy.
Request your individual risk analysis now: Have your insurance situation checked free of charge and receive concrete suggestions for optimisation.
More useful links
Deutsche Rentenversicherung offers an official definition of the Rürup pension in their glossary.
Bundesfinanzministerium provides a glossary entry with explanations on relevant terms for retirement provision.
Wikipedia offers a comprehensive overview of the Rürup pension, how it works, and its tax treatment.
Bundesfinanzministerium provides a detailed brochure on the taxation of retirement income available as a downloadable PDF.
Deutsche Rentenversicherung informs about the current regulations on pension taxation.
Statista provides up-to-date statistics and market data on the topic of retirement provision in Germany.
Bundesministerium für Arbeit und Soziales provides facts and information on retirement income and the necessity for additional provision.
Bundeszentrale für politische Bildung highlights the role of occupational and private pension schemes within pension policy.
Verbraucherzentrale Niedersachsen offers independent information and advice on the Rürup pension (basic pension) from a consumer perspective.
FAQ
What is the maximum tax-deductible amount for the basic pension in 2025?
In the year 2025, up to 29,344 euros (for singles) and 58,688 euros (for married couples) can be claimed as special expenses for the basic pension for tax purposes. [`üä`]
When can I start receiving the pension from my basic pension contract at the earliest?
For contracts concluded after 31 December 2011, a payout is possible at the earliest upon reaching the age of 62. For older contracts, the limit may be 60 years. [`ü-?`]
What happens to my basic pension when I die?
Without an additional survivors' protection agreement, the capital usually reverts to the insured community. Options like a survivor's pension or guaranteed pension period can provide security for spouses or children. [``]
Can I cancel my basic pension contract?
Termination with a lump sum payment is not legally possible with the basic pension. However, you can make the contract paid-up. [`äü`]
Do I need to pay tax on payouts from the basic pension?
Yes, pension payments from the basic pension are taxable. The taxable portion depends on the year the pension begins and increases gradually. [`üä`]
Can I also take out a basic pension as an employee?
Yes, employees can also take out a basic pension. It can be particularly useful as a supplement to the state pension for higher earners, to enhance retirement provision and take advantage of tax benefits. [``]
