What Is Rürup / Basisrente?
The Rürup-Rente (officially *Basisrente*) is Germany's tax-deductible private pension for people who don't (fully) benefit from the statutory pension system, mainly freelancers, founders, and self-employed expats.
Contributions are deductible as *Sonderausgaben* up to a high annual cap. In return, the money is locked until age 62+, can only be paid out as a monthly pension (no lump sum), and is not inheritable in the classic sense.
For expats considering a company like a GmbH or working as a Freiberufler, Rürup is often the single biggest tax lever available today.
Tax Deduction Limits in 2026
In 2026, contributions to Rürup and the statutory pension combined are 100% deductible up to:
- ~€29,344/year for singles
- ~€58,688/year for jointly-assessed couples
> Example: A self-employed expat with €120,000 taxable income pays €20,000 into Rürup. At a marginal tax rate of ~42%, the state effectively refunds around €8,400 via the tax return, the net cost of the €20,000 pension contribution is roughly €11,600.
This is why Rürup is often called the *last real tax lever* for high-earning self-employed expats.
The Trade-Offs
Rürup's tax power comes at a real cost:
- No lump-sum payout, only monthly annuity from age 62+
- Not assignable, not pledgeable, not cashable
- Limited inheritability, only spouse and eligible children under specific product designs
- Payout fully taxable as income (with rising taxable share depending on year of retirement)
- Contract quality varies wildly, cost differences of 30%+ between providers are normal
For an expat who might leave Germany, the annuity-only payout is a serious constraint: you commit today to a stream of euros paid to you in Germany decades from now.
Rürup vs. Altersvorsorgedepot: How They Compare
| Feature | Rürup (Basisrente) | Altersvorsorgedepot (2027) |
|---|---|---|
| Tax deduction upfront | Very high (up to ~€29k) | Small (state top-up) |
| Payout form | Annuity only | Lump sum or annuity |
| Flexibility | Very low | High |
| Best for | High-income self-employed | Employees & middle earners |
| Combinable | Yes | Yes |
Most of our self-employed clients end up using both: Rürup for the tax deduction on high income, plus the Altersvorsorgedepot and a plain ETF savings plan for flexibility.
When Rürup Makes Sense for Expats
Rürup is usually a strong fit if you can answer yes to most of these:
- Marginal tax rate above ~35%
- Planning to remain tax-resident in Germany (or a favorable DTA country) in retirement
- Already have a liquid emergency fund and separate flexible investments
- Want to reduce this year's tax bill significantly
- Comfortable with a locked, annuity-only payout
It is usually a poor fit if you're on a temporary contract, planning to leave Germany within 5 years, or don't yet have basic insurance and liquidity in place.
Common Mistakes
- Signing a Rürup for the tax deduction alone without checking contract costs. A cost-heavy Rürup can wipe out the tax gain over 20+ years.
- Overloading Rürup in a single high-income year, then regretting the rigidity for decades.
- Ignoring the annuity provider, the *Rentenfaktor* (how much monthly pension you get per €10,000 of capital) can differ dramatically between insurers.
- Skipping insurance. Rürup makes no sense if disability insurance or liability cover isn't in place.
What to Do Now
- Do your Rürup planning before year-end, the tax deduction is per calendar year.
- Request offers with the Effektivkosten and guaranteed Rentenfaktor, not just the illustrated value.
- Combine Rürup with the Altersvorsorgedepot and a normal ETF depot for flexibility.
- Coordinate with your Steuerberater, a Rürup decision affects the whole tax return.
Start a no-obligation conversation with us to see whether Rürup fits your situation, and if yes, which providers currently offer the best cost + Rentenfaktor combination.
> Disclaimer: Educational content. Rürup rules, deductibility limits and taxation are subject to legislative change. Not individual tax advice.