Tax-Free Pension: Navigating the Maze
What is the potential pension amount exempt from tax payments? - What's the potential pension amount without tax deductions?
Want to know how much pension you can earn without hitting the tax bracket? Let's decipher the numbers!
Lead the Way for New Retirees
In 2025, retirees receive a tax-free pension of up to €16,243 (annual gross) if they retired that year. For couples, this doubles. Just a heads up, this figure decreases annually, as the taxable portion increases. For instance, in 2024, 83.5% of the pension was taxable, leaving a mere 16.5% untouched.
Get Your Papers in Order
Retirees earning over €11,604 in pension income from 2024 must submit a tax return. In 2025, this limit has risen to €12,084. Why, you ask? The tax-free allowance for retirees serves as a baseline, with taxation kicking off after that mark. But remember, potential deductions or extraordinary burdens can impact your overall income tax.
Rürup Pension Taxation Through the Ages
Rürup pensions, popular among self-employed individuals, have a unique taxation evolution. As of 2025, 83.5% of the Rürup pension is taxable, while the rest remains tax-free. By 2058, the entire Rürup pension will be taxed.
General Pension Taxation
Statutory pensions face a different tax treatment, with tax rates dependent on overall income and tax brackets.
Like a Breeze: Tax-Free Allowances
The tax-free allowance for retirees in 2025 is €12,096 for singles and €24,192 for couples. Any income above this threshold triggers taxation.
Invest in Your Future, Worry Less About Taxes
With the gradual shift in tax policies, it's essential to contribute towards retirement savings more effectively to minimize tax burdens. Keep in mind that the regulations aim to foster equity in retirement savings for younger generations.
- Taxation
- Pension
- Rürup Pension
- New Retirees
- BMF
[1] Enrichment Data: Rürup Pension Taxation Evolution[2] Enrichment Data: Tax-Free Allowances[3] Enrichment Data: Tax Rates
- By the year 2058, the entire Rürup pension, a popular choice among self-employed individuals, will be subject to taxation.
- In 2040, the cost of employment policy may significantly decrease for singles, resulting in a more equitable retirement savings landscape.
- As per the community policy, a comprehensive employment policy should be in place to support retirees with their pension needs, ensuring they can continue to live comfortably.
