The Young European Pension Gap: What the State Won't Cover and the First €25 Fix
Most young people in Austria and Germany think the state pension will not be enough. You cannot fix the system. But you can free up the first €25 this month and put it in a plain ETF Sparplan.
Most young people in Austria and Germany think their state pension will not be enough to live on. The gap between what the state pays and what you really need has a name. It is the Rentenlücke. It is real. You cannot out-earn it overnight. You cannot fix the whole system. But you can do one thing this month. Free up the first €25 and put it in a plain ETF Sparplan.
I moved to Vienna at 17 with €50 and no pension plan. Why would I? You do not think about pensions when you are counting the price of pasta at Billa. So I get why this feels far away. But that distance is the very thing that makes the gap grow.
Will the state pension actually be enough?
For most young people in Austria and Germany, no, not on its own. The state pension is a pay-as-you-go floor. It is built to keep you off the street, not to pay for the life you want at 70. Many young people expect to fall short and retire near the poverty line if they lean on the state alone.
If you searched "will the state pension be enough" or "Rentenlücke erklärt," you already feel the answer in your gut. Polls across the DACH region keep finding the same thing. Many young people do not trust that the state alone will keep them out of poverty when they are old. Many expect to retire close to the poverty line.
One 2026 survey put real numbers on this feeling. Around 82 percent of working-age people in Germany said they expect the state pension will not be enough to keep their standard of living in old age, and only about 11 percent trusted that it would (Source: SoVD / Civey, 2026). That is not a fringe worry. That is most people.
This is not doom for the sake of it. The state pension in Austria and Germany is a pay-as-you-go system. The people working today pay for the people who are retired today. Over time there will be fewer workers for each retired person. So the maths gets tighter. The share of your old salary that the pension pays back keeps drifting down for young people.
You can see it in the official numbers too. In Germany the pension level before tax (the Rentenniveau) sat at 48 percent in 2024, held there by a legal floor. The government's own projection shows that without new measures it would drift down to about 45 percent by 2038, with even lower paths after that (Source: Rentenversicherungsbericht 2024, BMAS, 2024). For a young worker with decades still to go, the floor you plan around keeps getting lower.
The state pension is the floor, not the plan
Here is a better way to see it. The state pension was never meant to be your whole old age. It is the floor. It keeps you off the street. It is not built to pay for the life you actually want at 70. Treating it as your full plan is like treating your gross salary as your spending money. The number you picture and the number you get are two very different things.
How big is the gap, really?
Nobody can hand you your exact number. It depends on your past salary, your years of paying in, and where you retire. DACH money writers often put the average Rentenlücke at a few hundred euros a month. The bigger danger is the gap you have never looked at.
The honest answer is that nobody can hand you your exact number. It depends on your past salary, your years of paying in, and where you retire. What we do have are ranges that keep showing up.
The Rentenlücke in round numbers
The Rentenlücke is the monthly gap between what the state will pay you and what you will need. Most DACH money writers put the average gap at a few hundred euros a month.
Here is one way to feel the size of it. Money guides like Finanztip work on a simple rule. To keep your standard of living, you need about 80 percent of your last net pay in old age (Source: Finanztip, 2026). But the state pension is built around a much lower level. So for a normal earner the gap is not small change. It is often a few hundred euros a month or more, and it grows the more you earned before.
Worse, a lot of people cannot even guess their own gap. The system is confusing. The yearly letter is hard to read.
One 2024 survey found that around 36 percent of people do not even know how much money they can expect to live on in old age (Source: Allianz, 2024). You cannot plan for a gap you have never measured.
That second part matters more than the first. You can plan for a gap you can see. The danger is the gap you have never looked at. Most people learn the size of their Rentenlücke at the one moment it is too late to do much about it.
Time is the part you actually control
You have one edge a 50-year-old does not. Time. A euro you put in during your twenties has decades to grow. A euro you put in during your fifties has only a few years. This is the one place where being young and broke is a real strength. Small amounts, started early, do most of the heavy lifting. Big amounts, started late, are always playing catch-up. This is why "free up €25 now" beats "wait until you can afford €300 later."
The sharper question for expats: will I even qualify?
If you moved here, you have a second problem on top of the gap. In both countries you need a set number of years of paying in before you have any claim. EU rules often let you add up years from other member states. So check your real status, and build a private layer that travels with you.
If you moved here, like I did, you have a second problem on top of the gap. Will you even earn an Austrian or German pension? And what happens if you leave?
In both countries, you need a set number of years of paying in before you have any claim to a state pension. In Germany you need at least five years of paying in. This is the general waiting period (allgemeine Wartezeit) for the standard old-age pension (Source: Deutsche Rentenversicherung, 2026). Austria asks for more. You generally need 180 insurance months, which is 15 years, to earn the old-age pension (Alterspension) (Source: Austrian Social Ministry, 2025).
There is some good news here for people who move around the EU. Under the EU's social security coordination rules, the years you paid in across member states are added up (aggregated) when they decide if you have earned a pension. So years you worked in another EU country are not lost for good (Source: EU Regulation 883/2004, 2004).
But "added up to qualify" is not the same as "you keep the full amount." The details depend on where you paid in and where you end up. If you plan to move countries every few years, this is a question to answer on purpose, not by accident.
The lesson for people who move is simple. Do not assume you are covered. And do not assume you are not. Find out your real status. Then build a private layer that travels with you, no matter which country you land in next.
Why Riester and Rürup are usually the wrong first answer
When young people in Germany finally get scared about the gap, many rush to sign a Riester or Rürup contract. Often a paid sales agent pushes it. I want to be careful here. These products are not scams, and they can fit some people. But as a first move for a young earner, they are often the wrong answer.
The reasons come up again and again in DACH money writing. Many contracts carry high fees. Your money gets locked up and is hard to move. And the returns often let you down after costs. With many Riester insurance contracts the setup and admin costs can run into four-figure euro sums before your money even starts to grow. By contrast, the new state-backed pension depot (Altersvorsorgedepot) is capped at no more than 1 percent a year, and a plain ETF you pick yourself can cost as little as 0.1 to 0.2 percent a year (Source: Finanztip, 2026). The fees can quietly eat a big slice of the very growth you were trying to build.
A plain, low-cost ETF Sparplan has no sales agent. That is exactly why nobody is selling it to you. You set up a monthly auto-buy into a broad index fund like a VWCE or an MSCI World tracker. You use a platform such as Trade Republic or Scalable Capital, and you let it run. Low cost. Flexible. Spread wide. Yours to pause or move. For most young people, that is the base. The fancy contracts are a tweak to think about later, with open eyes, not the panic move you make first.
This is the same belief I keep coming back to. Local reality over imported hype. Boring systems over clever products. A Sparplan you actually keep beats a fancy contract you signed once because someone in a suit was good at talking.
The part you can actually control: the first €25
You cannot out-earn the pension gap. And you cannot fix the system from your sofa. But you do not need to. You need to start the private layer, and you need to start it now, even if it is small. Here is the order that works.
Find the first €25
Read one bank statement for leaks. One or two cancelled charges frees the money.
Set up a Sparplan
A monthly auto-buy into a broad ETF like VWCE. It runs on its own.
Raise it with your pay
When your salary goes up, send part of the raise in first, before spending grows.
- Find the first €25. You almost surely do not need a raise to find €25 a month. You need to find a leak. Export one month of your bank statement as a PDF or CSV. Read it for charges that repeat, forgotten subscriptions, and the Subscription Graveyard that is quietly draining you. One or two cancelled charges usually frees the first €25.
- Set up a Sparplan. Open a Trade Republic or Scalable Capital account. Pick a broad ETF like VWCE. Set up a monthly Sparplan for that freed-up money. It runs on its own, so it does not lean on you to remember.
- Raise it when your pay goes up, not your spending. Every time your salary goes up, send part of the raise to the Sparplan first, before the extra spending creeps in and eats it. That is how a €25 start turns into a real second pension over time.
Notice the move. You did not wait until you could "afford" old age. You found a leak, moved that money, and let time do the work. That is the whole plan. Defence before offence. Plug the leak first. Then invest what it frees up.
Where DolFin fits
I used to try to find these leaks by hand on a Sunday. I would scroll a messy statement, lose my place, and give up before I found a single euro to move. That is exactly why I built DolFin. You upload one bank statement as a PDF or CSV. There is no bank login. In under a minute it shows where your money is quietly leaking. It works out which bank the statement is from. It reads the German date and number style. It lays out the charges that repeat and the forgotten subscriptions in one view. Then you decide what to cancel, cut, or keep. You turn that first cancelled charge into the €25 that starts your Sparplan. You can even look at a sample audit before you upload anything of your own. The finance lessons inside walk you through the Austrian and German basics, including pensions, in plain words.
Free up your first €25 in under a minute
Upload one bank statement. No bank login. DolFin shows where your money is leaking and what to cancel first, so you can start your Sparplan today.
Download DolFin on the App StoreFAQ
Will the state pension be enough to live on in Austria and Germany?
For most young people, no, not on its own. The state pension is a pay-as-you-go floor. It is built to keep you out of poverty, not to pay for the life you want. Polls keep finding that many young people expect to fall short. That gap is the Rentenlücke. Many plan to retire near the poverty line if they lean on the state alone.
What is the Rentenlücke and how big is it?
The Rentenlücke is the monthly gap between what the state pension will pay you and what you really need. DACH writers often put the average at a few hundred euros a month. Your real number depends on your pay, your years of paying in, and where you retire. A lot of people cannot even guess their own gap, which is the bigger danger.
Will I qualify for a pension as an expat, and what if I leave?
You need a set number of years of paying in before you have any claim. In Germany that is often around five years. EU rules often let you add up the years from other member states, so they are not lost for good. But earning it is not the same as keeping the full amount. So check your real status and build a private layer that travels with you.
Are Riester and Rürup worth it for a young earner?
Usually not as a first move. Many contracts carry high fees, lock your money up, and let you down after costs. They can fit some people. But for most young people a plain, low-cost ETF Sparplan is the better base. It is cheap, flexible, and yours to pause or move. Think about the contracts later, with open eyes, not as a panic buy.
How do I start closing the gap with only €25 a month?
Find the €25. Read one bank statement for leaks, and cancel one or two forgotten subscriptions. Set up a monthly Sparplan into a broad ETF like VWCE on Trade Republic or Scalable Capital. Then raise the amount when your pay goes up, not your spending. Starting small and early beats waiting until you can afford a big amount, because time does most of the work.