Retiring in Germany

Germany has long been an attractive country for working expats. The country boasts a reasonable cost of living, an excellent healthcare system, high quality of life, and an efficient transport system. That said, retiring there is still a fairly new idea. So to help you get better acquainted, this article provides advice on the following:

Retiring in Germany

When you think of the most common places to retire in Europe, Germany might not immediately spring to mind. Indeed, Spain, Portugal, and France are more popular choices with retirees. However, Germany is well worthy of consideration. After all, the country fares well on the OECD Better Life Index, gaining above-average scores in all categories. And its impressive rankings for safety, life satisfaction, and health will be of particular interest to prospective retirees looking for the full package.

Germany also outranks most of its neighbors for overall quality of life in retirement, finishing 8th out of 44 countries in the 2021 Natixis Global Retirement Index; up from 10th in 2020 and 13th in 2019. Germany also scored highly for health (87%) and mental wellbeing (83%) but ranked a lowly 31st for finances in retirement.

Who can retire in Germany?

Fortunately, it’s easy to retire to Germany if you are from a European Union (EU) or Schengen member state. This is because EU and Schengen nationals don’t require a visa to live in Germany. However, if you plan to stay for longer than 90 days, you must register with the local Residence Registration Office (Einwohnermeldeamt) within 14 days of arrival. Swiss citizens must also obtain a residence permit from their local immigration office (Ausländerbehörde).

Notably, EU, Schengen, and Swiss nationals will need to provide a valid passport, proof of address, healthcare insurance, and evidence of having adequate finances to retire in Germany. Some local authorities may also request additional documentation such as birth and marriage certificates. However, rules vary from region to region, so make sure to check in advance.

Citizens of Australia, Japan, Israel, Canada, New Zealand, and South Korea can enter Germany for up to 90 days without a visa and apply for German residency while living in the country. However, if you are from a different country, you must apply for a retirement visa before entering Germany. You can start this process at the German embassy in your home country.

Third-country nationals are usually issued with a temporary German residence permit (Aufenthaltserlaubnis) which lasts for one year and can be renewed. After five years, you can gain a settlement permit (Niederlassungserlaubnis). However, depending on your circumstances, you may need to live in Germany for eight years before claiming full German citizenship.

Retirement age in Germany

The German retirement age is 65 years and 10 months, but this is set to rise over the next few years. From 2024, the retirement age will increase by two months each year until it reaches 67. A report by the Economic Ministry’s advisory council in June 2021 proposed increasing the age at which one can retire in Germany to 68 due to the financial difficulties likely to be caused by an aging population.

Pensions in Germany

There are three pillars to the German pension system: the mandatory state pension, occupational pensions, and private pensions. German citizens can draw their state pension when they reach retirement age. If you have made contributions to the social security system for 45 years, you may also be eligible to retire early, from the age of 63.

Company or occupational pensions are commonly available in Germany, and employees are legally entitled to request a company pension plan from the employer. They must then divert some of your gross salary into your designated private pension plan.

Freelancers can get a large amount of tax relief by investing in a basic pension. If you’re struggling to find out what your options are, you can reach out to various companies specializing in pensions, such as the fintech Horizon65.

Transferring an international pension to Germany

Transferring your pension to Germany can be a good way to keep your finances in one place and avoid fluctuations in exchange rates. However, the ease of doing this will depend on whether Germany has a social security agreement with your home country.

If you are an EU or EEA citizen, you’ll be able to benefit from a bilateral agreement that allows you to claim your state pension payments when living in a different member country. Germany has additional social security agreements with 21 non-EU/EEA countries and a special agreement with China. You can find out which countries are included on the German pension service’s website.

If you move to Germany from the UK, you can transfer your pensions into a Qualified Recognized Overseas Pension Scheme (QROPS).

Meanwhile, if you leave the EU and have made less than five years’ worth of contributions, you may be entitled to a pension refund. Services such as German Pension Refund can assist you with the process.

Taxes on retirement in Germany

In Germany, pension income is taxed at the same level as income from employment. Ultimately, this means that pensioners benefit from the same tax-free allowances as workers. Rates range from 0% to 45% depending on your income, but no tax is payable on the first €9,744 (€19,488 for a married couple). You can learn how to calculate your tax burden in our article on taxes in Germany.

The best places for expats to retire in Germany

Five German cities feature in the top 20 in Mercer’s 2019 Quality of Life rankings. These include Munich (3rd), Düsseldorf (6th), Frankfurt (7th), Berlin (13th), and Hamburg (19th). Furthermore, no German cities featured in the top 50 most expensive places to live in Mercer’s 2021 Cost of Living rankings. Indeed, Berlin, which was Germany’s highest entrant, only ranked in 52nd place.

If you are thinking of buying a home in Germany, then you will find that house prices vary significantly from region to region. Furthermore, prices rose by around 10% in 2021, but a poll of property experts by Reuters predicted lower increases of 6% in 2022 and 4% in 2023.

Below are some of the most popular German cities to retire in. You can find out more in our article on the best cities in Germany to live in.

• Munich: Munich is safe, clean, and boasts top healthcare facilities and a blend of new and old infrastructure. However, house prices are high in the most popular areas.
• Berlin: Germany’s capital is also its most expensive city, but Berlin boasts a greater choice of areas to live and outlying suburbs than other German cities.
• Heidelberg: This beautiful medieval town in Baden-Wurttemberg offers a pleasant climate for enjoying the history, culture, and romantic charm.
• Leipzig: The lower living costs for rent, utilities, and food, a slower pace of life, and abundance of attractions make Leipzig an attractive prospect for retirees.

Services, organizations, and clubs for expats retiring in Germany

Joining a local club can be a great way of settling into life in your new home country. And Germany boasts an abundance of English-speaking organizations to cover all interests, especially in the biggest cities.

As a starting point, you can check out our directory of expat groups and clubs in Germany or explore the local groups on Facebook or Meetup.

Wills and inheritance in Germany

Setting up a will when moving to Germany will ensure that your estate is settled in line with your wishes. EU rules state that citizens living abroad can choose whether they want the inheritance laws of their home country or country of residence to apply. However, if you pass away without leaving a will, the law of the country you have lived in for the last five years will apply instead.

Regardless of their home country, German residents may need to pay inheritance tax on their worldwide assets. Inheritance tax rules vary depending on the value of the estate and who is inheriting it. For example, the spouse of the deceased has a tax-free allowance of €500,000, while a child of the deceased has a lower allowance of €400,000. Inheritance tax rates range from 7% to 50%.

Healthcare for pensioners in Germany

Having suitable health insurance is a key requirement for retiring in Germany. German residents who have paid into the social security system have their healthcare costs covered in old age, but new residents must seek alternative cover.

EU and EEA nationals with an S1 health form from their home country can access medical treatment free or at reduced rates. Notably, S1 forms must be issued by your home country and need to be registered with German authorities.

If you are not covered, you will need to take out private health insurance coverage. For some nationalities, this will be part of their residency requirements. Importantly, private healthcare can give you access to specialist treatments that may not be available through the state healthcare system. In some cases, you can also benefit from shorter waiting times.

Fortunately, there are a number of private health insurance companies operating in Germany. These include large multinational insurers as well as local German providers which offer full and supplementary policies. Naturally, the amount you will need to pay will depend on your age, the plan you take out, and any pre-existing medical conditions.

Some of the main health insurance providers in Germany include:

• Allianz Care
• Cigna Global
• Embea – provides supplementary insurance for critical health diagnoses
• Ottonova

You can also compare private health insurance providers in Germany and get free quotes on our special health insurance page, and with the GKV and PVK tools (in German).

Finding a doctor in Germany

Many German residents search for medical practitioners and book appointments online by using the doctor rating site Jameda. They can also connect with medical health professionals by using online primary health platforms such as ZAVA and Doctena.

You can find more information about finding a doctor in Germany and navigating the healthcare system in our guides.

Useful resources

• Deutsche Rentenversicherung – provides the most important information on pensions and rehabilitation in Germany
• Handbook Germany – lists helpful FAQs about retiring in the country
• Siemens-Betriebskrankenkasse – offers more information about health insurance funds in Germany