What Is a Private Retirement Withdrawal Plan (Entnahmeplan)?
A retirement withdrawal plan (Entnahmeplan) describes the process of systematically drawing down money from your accumulated savings (such as an ETF portfolio) to supplement your statutory pension in Germany. Instead of selling all assets at once, you withdraw a fixed monthly or annual amount, letting the rest compound.
For detailed calculations, you can use our free withdrawal plan calculator.
Capital Consumption vs. Perpetual Annuity
- Capital Consumption (Kapitalverzehr): You plan to fully spend your assets over a set period (e.g., 30 years). This yields higher monthly payouts but runs the risk of running out of money if you live longer than expected.
- Perpetual Annuity (Ewige Rente): You only withdraw the returns (dividends and capital gains), leaving the principal untouched. Payouts are lower, but the wealth lasts indefinitely and can be passed on to heirs.
The 4% Rule and Its Application in Germany
The famous **4% rule** states that if you withdraw **4% of your starting portfolio value** in the first year and adjust this amount annually for inflation, your portfolio has a 95% probability of lasting at least **30 years** (based on historical US market data).
However, German investors should be more cautious due to capital gains taxes (Abgeltungsteuer) and lower historical local returns. A safer target is **3.0% to 3.5%**.
Monthly Payout Estimates at a 4% Annual Real Return (Capital Consumption to 0)
| Starting Capital | 20-Year Payout/Month | 30-Year Payout/Month | Perpetual Annuity (4%) |
|---|---|---|---|
| 200,000 € | approx. 1,212 € | approx. 955 € | approx. 667 € |
| 500,000 € | approx. 3,030 € | approx. 2,387 € | approx. 1,667 € |
| 1,000,000 € | approx. 6,060 € | approx. 4,774 € | approx. 3,333 € |
Taxation of Portfolio Withdrawals in Germany
Withdrawals are subject to the **flat-rate withholding tax (Abgeltungsteuer)** of 25% plus solidarity surcharge (totaling **26.375%**). However:
- Partial Tax Exemption (Teilfreistellung): For equity ETFs (Aktien-ETFs with >51% stocks), **30% of the gains are tax-free**, reducing the effective tax rate to approx. **18.46%**.
- FIFO Principle: Shares bought first are sold first (First-In, First-Out), which influences the ratio of capital to taxable gains.
Sources: Trinity Study (1998), German Investment Tax Act (InvStG), § 20 EStG, as of 2026.