Option 1: After 5 years of monthly contributions
To fulfill the requirements after 5 years, you have to pay at least €105 into the Basis pension for 60 months to apply for permanent residency. The monthly contribution must be guarantee-based to be eligible for permanent residency. For the exact contribution, please talk to your local public pension/immigration office, we can't assist you with this.
Option 2: The 3 years fast-track option
To fulfill the requirements after 3 years, you must pay enough into your Basis pension each month to ensure that you end up with a guaranteed pension payment of at least €1,504 or a guaranteed capital of €216,500 to be annuitized. You must also have occupational disability insurance so that your working capacity is covered. The monthly contribution must be guarantee-based to be eligible for permanent residency. Within this option, the monthly contributions would probably be higher than in Option 1, but you can apply for permanent residency much faster.
What happens with my Basis pension after getting my permanent residency?
Since you can't cancel your Basis pension, it's worth continuing to save for it after you can get your permanent residency. We recommend switching to the 100% investment strategy instead of the guaranteed strategy to get more out of the Basis pension after getting your permanent residency.
What are the tax benefits of the Basis pension while paying into the plan?
The Basis pension is tax-advantaged while paying in, while the subsequent payout is taxed. 100% of contributions to the Basis pension up to the maximum contribution will be tax-reducing.
The maximum contribution to be taxed in 2023 is around €53,056 for married couples/registered partnerships and around €26,528 for single people.
The following table shows the tax advantage of the Basis pension for different income levels for a 40-year-old self-employed single person who is neither insured by the statutory pension nor by a pension fund. That means that you can turn e.g. around 8.000€ net contributions into 12.000€ contributions (See table below).
Annual gross income | Monthly Basis pension contributions | Annual Basis pension contributions | Monthly tax return | Annual tax return |
30.000€ | 250€ | 3.000€ | 72€ | 864€ |
30.000€ | 500€ | 6.000€ | 141€ | 1.692€ |
50.000€ | 500€ | 6.000€ | 180€ | 2.155€ |
50.000€ | 1.000€ | 12.000€ | 348€ | 4.171€ |
70.000€ | 1.000€ | 12.000€ | 425€ | 5.220€ |
70.000€ | 1.500€ | 18.000€ | 630€ | 7.559€ |
Taxation of the Basis pension in retirement
How much tax refund you can expect depends on the amount of your taxable income and your tax rate. As a general rule, the more you earn, the more you get back from the tax office. However, the following also applies: the higher your income in retirement, the more tax you pay on your Basis payout. This is because the individual tax rate is also decisive here.
In 2024, 84% of the pension will be taxable. The planned full taxation from 2040 will be further postponed according to the federal government's current plans.