Calculating Your Pension Gap as a Career Starter

Those who start their first job in their early twenties rarely think about pensions. Yet the gap between the statutory pension and the standard of living you want in retirement is the decisive figure for every retirement provision decision. This guide shows you the calculation method with open assumptions, so you can check the numbers yourself and adjust them to your situation.

The key points at a glance

• The pension gap is the difference between your target pension and the statutory pension. It is not a fixed figure, but depends on your assumptions.
• The pension level of 48 percent applies until 2031 under the Pension Package 2025 (Rentenpaket 2025). Beyond that period, it is not fixed by law.
• For the calculation, a rough estimate is enough. Your personal figure is in the pension statement (Renteninformation) from the German Pension Insurance.
• The time factor has a strong effect: a savings amount that starts early grows much more over decades than a higher amount saved later.
• A pension gap does not have to be closed through investments alone. Statutory pension, occupational pension schemes and private provision work together.

What the pension gap actually is

The pension gap is the difference between the amount you need each month in retirement and what comes in from statutory pension insurance and other sources. The statutory pension does not automatically replace your last standard of living. How large the gap is for you depends on your income, your employment history and the lifestyle you envision in retirement.

The standard pension level describes how high the pension of a standard pensioner is in relation to average earnings, before tax and contributions. The Pension Package 2025 fixed the level at 48 percent until 2031. After that, it is not set by law. That is why your calculation should also include a variant with a lower level.

Step by step: calculating your pension gap

The calculation has four steps. The figures below are example values that you can replace with your own.

1. Set your target pension: how much gross income do you want in retirement? Assumption: 70 percent of your current gross income.
2. Estimate the statutory pension roughly: assumption: over your working life you earn the average income. The statutory pension before tax is then about 48 percent of your income.
3. Form the gap: target pension minus statutory pension, each per month.
4. Estimate the capital requirement: gap times twelve times 25. The rule of thumb of 25 corresponds to a withdrawal of four percent per year from the capital saved (assumption).

The calculation is deliberately rough. It does not take inflation, taxes in retirement or health insurance into account. You can add these items if you want to refine the calculation. What matters is that you state your assumptions openly and review them every year.

Why the time factor makes the difference

An early start works through compound interest. Assumption for the following example: you pay in 25 euros a month, which is 300 euros a year, and earn an annual return of five percent before costs and taxes. The figures are simplified, because the payments are calculated annually.

The difference is clear, even though the amount stays the same in both cases. The figures are not a forecast. A return can be higher or lower, and costs reduce the result. The comparison does show, however, why the time factor matters so much for career starters. How to start with small amounts is explained in the guide Retirement Provision for Students: Starting Early With Small Amounts.

How to get your data

The German Pension Insurance informs you about the pension entitlements you have acquired so far. The pension statement is usually sent every year from age 27. It contains the pension points acquired so far and a projection up to retirement age. This projection is the best basis for your estimate of the statutory pension.

Study periods are credited differently depending on the phase. Which periods count and which do not is explained in the guide Pension Points During Studies: How Study Periods Are Credited. If you already have contribution periods from a mini-job or a working student position, these also feed into the projection.

Common mistakes in the calculation

• Calculating with today’s salary and ignoring salary growth. This distorts the comparison, because the target pension and the statutory pension are then based on different figures.
• Forgetting inflation: you either calculate in today’s purchasing power or with inflation. Doing both at once leads to distortions.
• Mixing gross and net: the statutory pension is stated before tax, so your target amount should follow the same logic.
• Overly optimistic return assumptions: a high return over decades is not a guarantee. Calculate with several scenarios.

Frequently asked questions

What is the average statutory pension?

The actual pension depends on your earnings points, which means your income and insurance periods. The 48 percent pension level describes a standard pensioner, not every individual case. Your personal figure is in the pension statement that the German Pension Insurance sends you.

Is the pension gap bigger for academics?

Not necessarily. Academics often have higher incomes and therefore higher pension entitlements, but their career often starts later. What matters is the ratio of target pension to statutory pension. An example specifically for academics is in the guide Rentenlücke berechnen als Akademiker.

Is the statutory pension enough if I start early?

An early start mainly changes the effect of compound interest on your own capital. The statutory pension still depends on income and contribution periods. Your own provision supplements this part and does not replace it.

How do I account for a phase of part-time work?

Part-time work reduces the earnings points for that phase. Calculate those years with your actual income, not your target salary. This shows how much a phase of part-time work widens the gap, and whether you want to make additional provision for it.

Do I have to close the gap completely?

No. The gap is a guiding figure. Many people combine statutory pension, occupational pension schemes, private provision and, if applicable, a home they live in themselves. What matters is that the total fits your plan and that you review the plan regularly.

What to do now

1. Get your pension statement or a pension estimate from the German Pension Insurance.
2. Set your target pension and your withdrawal assumption, then calculate the gap using the figures from this guide.
3. Check which monthly amount is realistic for reducing the gap.
4. Update the calculation every year if your income, family or housing situation changes.

Related reading

• Rentenlücke berechnen als Akademiker
• Retirement Provision for Students: Starting Early With Small Amounts
• Retirement Planning for Academics: The Right Order
• Pension Points During Studies: How Study Periods Are Credited
• Betriebliche Altersvorsorge beim ersten Job: Arbeitgeberzuschuss nutzen

Sources: Social Code Book VI, section 154 (pension level), status October 2026; German Pension Insurance, Pension Package 2025: What it contains, status October 2026.

Stand: October 2026. This guide is general information and not individual advice.