Calculate Your Pension Gap: What Your Renteninformation Really Says
Key takeaways
- Pension gap = desired income − statutory pension, per month, before tax.
- The only reliable figure for it is in your Renteninformation — not in a model.
- The gap grows with inflation; the capital that closes it is gap × 12 ÷ withdrawal rate.
- Time is the biggest lever: starting five years later costs more than five years of payments.
- German pensions are taxable — calculate gross and with a buffer.
The pension gap is the one number almost everyone should know and almost nobody has calculated. Yet the hardest part already lands in your letterbox once a year. This article shows how to read the figure in the Renteninformation, what it means — and which savings rate closes the gap. It belongs to Level 6 (Financial independence) of our guide.
What the pension gap is
Pension gap = the income you want in retirement, minus what the statutory pension is expected to deliver. Per month, gross, in the same purchasing power.
Two things about it matter more than they seem. First: both figures must have the same purchasing power. If you think of your desired income in today’s money, you must also take the pension in today’s money — otherwise you compare apples with pears. Second: the gap is only the start. From it follows the capital that closes it, and from the capital the savings rate.
Reading the figure in your Renteninformation
If you are at least 27 and have five years of contributions, the Deutsche Rentenversicherung sends you a Renteninformation every year (§ 109 SGB VI). It is the only source that knows your actual contribution years — any model that calculates without it is guessing.
The letter states several amounts. For the pension gap you need the future standard pension (Regelaltersrente) — the amount that results if you keep paying in as before until retirement. It appears in two versions:
| Version | What it means | What you use it for |
|---|---|---|
| Without pension adjustment | Today’s money — this is what the pension would be if it started today | For the gap in today’s purchasing power. This is the figure for the calculator. |
| With annual adjustment | Projections of how high the amount could be in nominal terms at retirement | For context — do not compare it with a desired income in today’s money |
Three footnotes in the letter that are easy to overlook: the amount is gross. It assumes constant contributions until retirement — part-time work, a break or self-employment change it. And it is a forecast, not a promise.
Calculate your gap directly — with the figure from your letter:
If you have worked outside Germany
The Renteninformation only reflects periods recorded with the German pension insurance. Pension rights you built up in other countries are paid separately by those countries — within the EU and under many social security agreements, periods abroad can also help you qualify for a German pension, but they do not show up as euros in this letter. For the calculation that means: enter pensions you expect from abroad as existing provision if you know their value, or subtract the expected monthly amount from your desired income.
What closes the gap
The gap per month is a number in today’s purchasing power. Until retirement it grows with inflation — at 2% over 30 years to almost twice as much. This gap at retirement is the one your capital has to carry.
The same logic applies as for the 4% rule: the capital must be large enough that an annual withdrawal covers the gap without being used up.
Capital = gap at retirement × 12 ÷ withdrawal rate
At a withdrawal rate of 3.5%, a nominal gap of €1,500 a month needs roughly €514,000. Whatever your existing provision covers by then you subtract — the rest is what your savings rate has to build.
Time is the biggest lever
Between “start at 30” and “start at 35” lie not five years of saving, but the five years that would have compounded the longest. That is why the required rate after a five-year delay is clearly higher than five more years of payments — the calculator shows the difference as a figure of its own. It is the most honest motivation there is in retirement saving: not saving more, but earlier.
What people tend to forget
- Inflation. Calculate the gap in today’s money and then save capital in today’s money, and you have not planned for 30 years of lost purchasing power. That is why the calculator projects the gap.
- The pension is gross. Pensions are taxed on payout, and health and long-term care insurance come on top. How much remains net depends on your case — calculate with a buffer, not with percentages from the internet.
- Existing provision belongs on the plus side. Company pension, Riester, Rürup, a portfolio intended for retirement — everything already there keeps growing and reduces the rate.
- The pension adjustment. The calculator assumes the pension keeps pace with inflation. That is an assumption, not a forecast; a cautious planner assumes a little less.
- Starting too late — see above. It is the most expensive point on this list.
The gap closes with a rate — and the rate belongs in the budget. In sum a goal is a rate with a forecast: you set what you put aside each month and see when you will get there at this pace; the rate comes straight off your available budget. sum does not calculate a pension gap itself — that is what this calculator is for. Today your transactions come in via CSV import; the automatic bank connection (PSD2) is in the works.
Frequently asked questions
How do I calculate my pension gap?
Desired income in retirement minus expected statutory pension, both per month and gross. You take the pension from your Renteninformation. You project the gap to your retirement date with inflation — and from that the capital that closes it: gap × 12 ÷ withdrawal rate.
Where do I find the figure in my Renteninformation?
The Renteninformation states your future standard pension on the assumption that you keep paying in as before — once without pension adjustment, in today’s money, and additionally as projections with annual adjustment. For the gap in today’s purchasing power, you take the value without adjustment.
Is the German state pension paid net?
No. The Renteninformation shows gross amounts. Pensions are taxed on payout, and health and long-term care contributions come on top. Calculate gross and with a buffer.
How much do I need to save each month?
That depends on gap, time and return — the calculator gives you the rate. As a direction: the earlier you start, the smaller the rate, because the first years compound the longest.
What if I only start at 45?
Then the rate is noticeably higher than at 30 — not because fewer years remain, but because the capital misses the years that compound the longest. The calculator shows exactly that difference with “five years later”.
Read on
- Financial freedom: the complete guide in 7 levels
- The 4% rule — calculated with German tax
- Build passive income
- Savings goals app: when a goal becomes a plan
- Savings goal calculator
Sources
- Deutsche Rentenversicherung: Renteninformation (§ 109 SGB VI) — annually from age 27 with five years of contributions.
- § 22 no. 1 EStG — deferred taxation of pensions.
- Grant Sabatier: Financial Freedom (Level 6, financial independence).
This article is for information only and does not constitute investment, pension or tax advice. The information on the Renteninformation describes the standard letter of the Deutsche Rentenversicherung; what counts is your own copy. Investments in securities carry risks up to total loss.
sum is in early access.
The first step toward your financial goals is the overview — that's exactly what we're building sum for. Secure your access early.