Retiring in Germany has plenty of perks for expats, with great healthcare and a high standard of living. This guide explains what to arrange for retirement in Germany.
While Germany has long been an attractive country for working expats, retiring in Germany is still a fairly new idea unlike in nearby countries such as France, Spain, and Portugal. The popularity of retirement in Germany, however, is increasing and it’s not hard to see why.
German consistently scores well for quality of life and healthcare, which are important factors for those planning on retiring to Germany, securing a place in the top 10 in the 2016 Natixis Global Retirement Index (GRI). But before you start your preparations for German retirement, it’s important to have a clear view of what’s involved and their implications. Is retiring in Germany for you?
This guide explains who can retire to Germany, the retirement age in Germany and other important things to consider with regards to the German retirement system, such as healthcare insurance, inheritance tax, and German residency.
Retiring in Germany: who can retire?
Like a lot of European countries, Germans are happy to welcome foreign nationals to retire in Germany, particularly as retirees aren’t looking for working or relying on a salary for financial support.
Retiring in Germany for citizens of the European Union (EU) and Schengen member states, which includes Norway, Switzerland, and Iceland, the process is more straightforward than for third-country nationals. EU and Schengen nationals are not required by law to have a visa in order to enter and stay in Germany. However, all visitors must register with the local Einwohnermeldeamt or resident registration office within 14 days of arrival in Germany if they intend to stay more than 90 days. The registration office is usually located in the town or city hall.
Upon registration, individuals are required to provide a valid passport, proof of address, healthcare insurance, and proof of adequate finances to retire in Germany. You may also be asked to supply additional documentation, such as birth and marriage/divorce certificates, depending on the individual circumstances and the local authority regulations. Read a guide for EU citizens moving to Germany.
For Americans retiring in Germany, or citizens from other certain third countries such as Australia, South Africa, Japan, Israel, Canada, New Zealand, and Switzerland, it is possible to enter Germany for up to 90 days without a visa and apply for German residency while living there. It is, however, advisable to apply with your German consulate before you travel to avoid any complications.
Outside of these countries, all foreign nationals must apply for a retirement visa in Germany before entering the country, which can be done at the local or nearby German consulate embassy in your home country. Getting a retirement German visa is not guaranteed and is subject to the discretion of immigration authorities, although it may be easier in certain cases, for example, if you are joining a family member living in Germany. Read more on German residence permits.
For all third-country nationals, the initial visa issued is a temporary residence permit (Aufenthaltserlaubnis), which is typically valid for one year, but can be longer depending on your circumstances. Unless your circumstances have changed, the renewal process is generally a formality. After a five-year period, both third-country and EU nationals can receive a settlement permit (Niederlassungserlaubnis).
To apply for permanent residency or settlement additional requirements must be met, which include sufficient knowledge of the German language and basic knowledge of the German legal, political, and social system. Read more in Expatica’s guide to German visas.
Retirement age in Germany
The German old-age pension can be drawn when you reach the legal retirement age in Germany, which varies depending on the year you were born and how many years worked, with the minimum period set at 60 months or five years.
People born before 1947 can receive their pension at 65 years old, while the retirement age in Germany for those born between 1947 and 1963 will be gradually increased to 67 years. The retirement age in Germany for those born in 1964 or after stands at 67 years but there have been discussions of increasing it to 69 years by 2060.
An employee who has had an exceptionally long contribution period of at least 45 years is eligible for early German retirement at 63 years old if they were born prior to 1953.
Visit the government’s German pension insurance website for information on German pensions and retirement in Germany.
Funding your retirement in Germany
A significant part of getting approval for retiring in Germany rests on your pension income and demonstrating you have sufficient funds to reside there.
If you have been living and working in Germany, paying contributions to German social security for a minimum of five years, you may be entitled to draw a German state pension, as well as any occupational pension schemes and private pension funds you may have accrued.
However, foreign nationals who aren’t eligible for German pensions must rely on other pension entitlements to prove they have financial support for retiring to Germany. In some cases, foreigners can transfer an international pension to Germany.
Find more information in Expatica’s guide to the German pensions.
Transferring an international pension to Germany
For foreign nationals retiring to Germany it is possible to transfer international pensions, including state pensions from other countries and private pension funds. However, foreign pensions may be subject to certain tax implications, depending on whether Germany has a social security agreement with your country of origin. You can read more about taxes in Germany.
On the whole, the process for transferring an international state pension, as well as occupational pensions, to Germany is a relatively straightforward, but it’s prudent to plan well in advance and notify the pension office in your current country of residence several months before retiring to Germany.
Transferring an international pension to be withdrawn in Germany, however, can have different tax implications depending on where you are a citizen. Germany has a number of bilateral agreements on taxation, which also apply to pensions. In most cases, taxation occurs in the country of residence, but this isn’t always the case and for some nationals double taxes will apply, which means you may have to pay tax in both countries, something that can apply to retirement in Germany for US citizens.
It is also possible to transfer private pension funds to Germany. For example, if you are an EU citizen or American retiring in Germany and you have occupational or personal pension funds, in many circumstances these can be deposited into a German bank account, providing you notify the pension provider.
For EU citizens it is also possible to draw a pension from more than one country. For example, if you have contributed to several EU pension schemes in different EU countries, this will be calculated centrally and paid to you in Germany.
UK citizens have additional options with HMRC-approved Qualifying Recognized Overseas Pension Schemes (QROPS) that are offshore pension funds, which unfreeze UK assets and can attract favorable tax benefits, such as exemption from double taxation, reduced inheritance tax, less fluctuation with currency exchange, and more flexibility to access your asset capital during your retirement in Germany.
Taxes implications of retiring to Germany
Your finances are the cornerstone of retirement in Germany, so understanding how they will be taxed is vital in a country with a complex tax system and relatively high costs of living.
In Germany, all pensions are considered taxable income and subject to German income tax rates, which can be as high as 45 percent. Therefore, even if your foreign pension is coming from a country with a bilateral double tax agreement, you will still be obligated to pay tax in Germany. Read our guide for more information on taxes in Germany.
Inheritance options for German retirement
German retirement can also affect the inheritance you leave behind. To make sure your family are taken care of, you should draw up a will. In some cases it may be advisable to draw up a will in Germany and your country of citizenship and have them reviewed by a German solicitor, especially in cases where you have assets in other countries.
Generally, Germany defers to the inheritance law of the country of citizenship for the deceased, including worldwide assets. However, there can be exceptions where real estate and other assets are reviewed under German inheritance law.
Regardless of your nationality, in all circumstances as a resident in Germany, you will be subject to pay German inheritance tax on German and worldwide assets.
Inheritance and estate tax, which can range from 7% up to 50% should also be a consideration. Inherited wealth and foreign pension funds aren’t treated any differently in Germany, and will be taxed at the current market rate. Furthermore, in some cases, such as the UK, lump-sum payments can be subject to inheritance tax rates from the originating country, which in the UK is 55 percent. Read more in our guide to inheritance tax in Germany.
In all cases, it’s worthwhile seeking professional advice from an international tax expert familiar with the German retirement system and your country of residence’s social security and taxation systems. Expatica provides a listing of international tax lawyers and experts here.
Healthcare under the German retirement system
Having appropriate health insurance cover is a key requirement for German retirement and with a reputation for world-class medical care, it is a key attraction to retirees. Read more in our guide to the German healthcare system.
Germany offers a great deal of healthcare options for expats looking at German retirement. If you have been paying into the German state pension fund for the minimum qualification period, you will have also been paying towards your Pensioner’s Health Insurance (Krankenversicherung der Rentner), which covers healthcare costs for German residents in old age. However, new residents should seek alternative health insurance cover.
For EU, EEA and Swiss nationals, there is an agreement in place whereby a retiree with an S1 health card (formerly the E121) issued by the Department for Work and Pensions in the originating country can give pensioners access to medical treatment for free or at reduced rates. This card must be issued by the originating country and registered with the German authorities. EU, EEA, and Swiss retirees might also receive temporary healthcare coverage through their European Health Insurance Card (EHIC) but must first check with their home country’s state healthcare system.
To ensure appropriate cover and meet residency requirements for certain nationalities, some form of private health insurance cover will be required. In Germany, there is an abundance of private insurance companies offering many services for healthcare, including specialist treatments that may not be available through state healthcare and the ability to tailor your insurance coverage. Read Expatica’s guide on German health insurance.
Another implication is dying in Germany, which as a foreigner can be complicated and expensive. Germany has stringent burial laws whereby all bodies must be buried in a closed casket even if the body is cremated. For foreigners who wish to be buried on home soil, this can make flying a casket or cremated urn home expensive, as many airlines have restrictions on carrying closed caskets as well as crematory urns due to terrorist threats. Therefore a funeral home or crematory should be employed to take care of the logistics of shipping the deceased out of Germany.
Tips for retiring in Germany
The key to successful retirement in Germany is to plan ahead and make sure you cover as many eventualities as possible. Germany is a highly developed country with a rich history and robust infrastructure, but this can also result in challenging laws and regulations that, if not accounted for, can become a huge obstacle. Read about the implications for relocating to Germany and the first things to do in Germany after your move.
Beyond the practicalities, a few tips can go a long way in helping you integrate into German retirement and culture.
Beyond getting the legal and logistical matters right, it’s also important to integrate into society to enjoy a successful German retirement. Engaging with a mix of locals and expat communities can make assimilation much easier and enjoyable, whether you head to the local cafe, join a local German Vereine (club) or take a language class. Clubs, outdoor activities and sports are all common hobbies in Germany; you can fund a list of interesting groups and clubs in Germany.
Learn the language
You don’t have to be fluent in German to retire in Germany, but learning some basics will help you adjust better in Germany; even if a large portion of the population speak English or another foreign language, they will always appreciate the effort. You can find a list of language schools in Germany, including in the main cities around the country.
German retirement homes
Germany has one of the world’s highest percentages of residents aged 65 and older, expected to require costly long-term care by 2050. Rising costs and falling standards in German retirement homes have influenced a growing number of elderly Germans being sent to nursing care in eastern Europe and Asia, a move severely criticized by social welfare organizations. However, as German retirees are increasingly unable to afford the growing costs of German retirement homes, it is expected more residents will be sent abroad.
However, entering a German retirement home or nursing care is not a popular trend in Germany, with more than three-quarters of the population reportedly preferring to stay independent. This has led to creative solutions, such as retirement communities where groups of retirees live in separate apartments in the same building or even rent out rooms in large accommodation, with a focus on group activities, communal spaces, and shared services, such as 24-hour nursing care.
In response, the government implemented a law in 2013 that provided seniors with the possibility to get a grant of up to €10,000 to establish a community apartment, plus a monthly subsidy (around €200) for every tenant. Another project in 2015 aimed for similar goals, known as ‘Gemeinschaftlich wohnen, selbstbestimmt leben’ (Communal housing, independent living), which provided financial support to some 30 senior community living projects across Germany. Construction companies are also responding with private senior housing projects in the pipeline, with even the publicly owned housing company, Howoge, jumping on board with several senior housing projects in Berlin.
Best places to retire in Germany
If Germany still sounds like a great prospect for retiring abroad, there are German retirement homes and German cities to choose from. The best places to retire in Germany offer pensioners high quality of life, culture, living expenses, and infrastructure.
Below is a list of some of the best places to retire in Germany for expats.
This beautiful medieval town in Baden-Wurttemberg, one of Germany’s warmer regions, offers a pleasant climate for enjoying the history, culture, and romantic charm. With a thriving population of young students, professionals and a growing population of expats, Heidelberg has lots to offer.
If you want a bustling city with lower costs than Berlin, Leipzig is becoming an increasingly popular alternative as one of the best places to retire in Germany. With lower living costs for rent, utilities, and food, the slower pace of life and abundance of attractions make it an attractive prospect.
If you like the buzz of the big city, then Berlin can offer good value for pensioners and a variety of shared senior accommodation for independent retirees. Although real estate is more expensive in the German capital, the healthcare costs are relatively low and there is a greater choice of areas to live and outlying suburbs, meaning Berlin can still be an affordable German retirement choice. Berlin is the best place to retire in Germany for retirees looking for an active calendar of events, numerous sites to visit, and a bigger variety of amenities, shops, and restaurants.
Tipped as Germany’s most liveable city in the Mercer Quality of Living Index, some would argue that Munich is the best places to retire in Germany. It’s safe, clean, and has everything you could possibly need for retirement, including top healthcare facilities, low unemployment, and a wonderful blend of old and new dotted throughout the city.
Useful links for German retirement
- German Federal Ministry of Interior website
- German Ministry of Health and Social Security website
- German Pension Authority website
- German Pensioner Health Insurance website
Terms for retiring in Germany
- Retire in German: in Pension gehen, in den Ruhestand gehen, pensionieren
- Retirement in German: die Pensionierung, der Ruhestand
- Retired in German: im Ruhestand, pensioniert