RürupModelle

RürupModelle refer to a class of private pension products in Germany designed to provide retirement income and named after the economist Bert Rürup. Introduced as the Basisrente, they form part of the German pension system to supplement the state pension, with particular relevance for self-employed persons, freelancers, and others for whom the state pension offers limited protection.

The core idea is a contract with a life insurance company or pension fund that yields a lifelong pension in retirement. Contributions to RürupModelle are funded with the aim of tax advantages: they can be deducted as special expenses (Sonderausgaben) for tax purposes up to statutory limits, with the proportion of deduction increasing over time. At retirement, the payments from the contract are treated as pension income, and the tax treatment depends on the year of retirement and current tax law. In most cases, a lump-sum withdrawal is not available, and the contract emphasizes a steady lifetime payout. Some plans offer optional survivor provisions or increased benefits for designated dependents, depending on the product.

RürupModelle can be based on different product designs, including traditional life-insurance-based models and fund- or investment-based models. They are typically funded by the policyholder and bear the investment or guarantee risk with the provider. Compared with other private pension options such as Riester, RürupModelle do not come with government subsidies or allowances and are often favored by higher earners and those without substantial state pension entitlements.

The suitability of RürupModelle depends on long-term tax planning, desired lifelong income, and the willingness to lock in funds for retirement, given the limited liquidity and the dependence on contract-specific terms.

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