Worked example
€500 a month for 30 years
Thirty years of €500 a month at an assumed 7 % a year. The total below is before tax; the cards under it show what the same plan is worth after inflation, and after estimated tax if it is sold in full.
The answer
Value after 30 years
€558,838
From €180,000 of your own money paid in over the same period.
- Portfolio at year 30 · inflation-adjusted · before estimated tax
- €266,422
- Full-sale value at year 30 · inflation-adjusted · after estimated tax
- €243,512
- 10th-percentile portfolio at year 30 · inflation-adjusted · before estimated tax
- €139,707
- Assumed yearly return
- 7 %
- Assumed inflation
- 2.5 %
- Assumed tax rate
- 18.4625 %
Tax basis: 18.4625 % on realised gains, which is the German 26.375 % less the 30 percent Teilfreistellung an equity fund receives. The standard rate applies to individual shares and bonds; a fund holding at least 51 percent equities receives the exemption. The yearly Sparer-Pauschbetrag of €1,000 is applied as well.
Stress basis: percentile 10 of 1,000 simulated paths whose median compounds at the same long-run return of 7 %, with 15 % annual volatility.
Open this plan and change the assumptions
Opens with these numbers, ready to change. Nothing you enter there is saved.
Where the growth comes from
You pay in €180,000. Everything above that is return compounding on return, and much of it arrives late: the last decade contributes more growth than either earlier decade, because it is working on a much larger balance. This is why starting earlier beats saving harder later - and why someone who stops paying in after ten years, with a third of the contributions, still ends with more than half of the result.
What tax does to it
For a qualifying equity fund, 30 % of fund income is exempt first. The yearly €1,000 Sparer-Pauschbetrag then reduces the taxable part, and the remaining amount is taxed at 26.375 %. Even so the after-tax figure is a full-sale estimate rather than a forecast of the tax you will pay, because it assumes the whole balance is sold in one year. Selling across several years instead uses a fresh allowance each time, which the full simulator models.
Changing the amount
The before-tax balance scales linearly with the contribution, so €250 a month gives exactly half and €1,000 exactly double. The after-tax value does not scale exactly because the allowance is a fixed euro amount. The horizon does not scale either: the same €500 for 20 years rather than 30 produces less than half, because the years you remove are the most productive ones.
What this page is not
It is an illustration under stated assumptions, not advice and not a forecast. The return is an assumption you can disagree with, the tax is an estimate of one common German case, and no page on this site knows anything about your circumstances. How it works sets out the arithmetic and the full list of what the model leaves out.