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Two systems, one agreement, no more WEP
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Janine El-Saghir
Janine El Saghir is an editor at How-to-Germany.com, where she specializes in the practical aspects of daily life and integration for expatriates. With years of...
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- Same age, different maths: both systems pay a full pension from 67 for younger workers. Germany needs five years to qualify, the US 40 credits, about ten years.
- The agreement links them: since 1979 you pay into only one system at a time, and years in both countries can be added up to qualify.
- No double hit any more: the US no longer cuts Social Security because of a German pension, and the tax treaty lets only your country of residence tax these benefits.
Americans who work in Germany pay into the German statutory pension from the first payslip and usually stop earning US credits for that time. Neither is lost. The agreement between the two countries makes sure the years count. If you also want to invest privately while you are here, note that many German brokers do not accept US tax persons. The broker comparison covers what works, and the private pension guide explains the German options.
Germany and the US side by side
| Germany | United States | |
|---|---|---|
| Minimum to qualify | 5 years of insurance | 40 credits, at most 4 a year (one credit per $1,890 of covered earnings in 2026, $1,970 in 2027) |
| Contribution | 18.6% of gross pay, half each from employee and employer | 6.2% each from employee and employer, plus 1.45% each for Medicare. Self-employed: 12.4% plus 2.9% |
| Earnings cap | €101,400 a year (2026) | $184,500 (2026), $192,300 (2027) |
| Full retirement age | 67 for everyone born in 1964 or later | 67 for everyone born in 1960 or later |
| Earliest pension | 63 with 35 years, with a deduction of up to 14.4% | 62, with a reduction of 30% |
| Yearly increase | Every 1 July, in line with wages | Cost-of-living adjustment by consumer prices: 2.8% for 2026, 3.6% for 2027 |
| OECD net replacement rate, average earner | 53.3% | 51.3% |
| Sources: Deutsche Rentenversicherung, Social Security Administration and IRS (2027 figures as published in October 2026), OECD Pensions at a Glance 2025 (future replacement rates for someone starting work in 2024), retrieved 8 November 2026. | ||
In Germany the earnings cap is lower and the contribution higher, but the contribution also buys disability and survivors’ cover, as US Social Security does. Delaying your pension past the full retirement age raises it in both countries. In the US you can wait until 70.
The US–German Social Security agreement
The agreement has been in force since 1 December 1979 and deals with pensions. It does two things.
One system at a time. If a US employer sends you to Germany for five years or less, you stay in US Social Security and are exempt from German pension contributions, and the same works the other way round. Self-employed people moving temporarily for up to five years are treated the same. The exemption needs a certificate of coverage. Whether a posting also keeps you out of German health and long-term care insurance contributions, ask the health insurer before you go. For a posting from the US, the Social Security Administration issues it on request. For a posting from Germany, the German employer requests form D/USA 101 from the health insurer that collects the contributions.
Adding up years. If you do not have enough credits in one country, your periods in the other can be counted. For a partial US benefit you need at least six US credits, about a year and a half of work. To have US credits counted for a German pension, you need at least 18 months of German coverage. Each country then pays only for the time you were insured there.
You apply once. Living in the US, you file with any Social Security office using form SSA-2490-BK. Living in Germany, you can go through the Federal Benefits Unit at the US Consulate General in Frankfurt or any German pension office. You can ask for your application to count as a claim in both countries.
No more cuts for a German pension
Until recently the US reduced Social Security for many people who also drew a foreign pension, through the Windfall Elimination Provision and the Government Pension Offset. The Social Security Fairness Act, signed on 5 January 2025, repealed both, for benefits payable for months after December 2023. A German pension no longer lowers your US benefit.
Which country taxes the pension
The US–German tax treaty, as changed by the protocol of 2006, says that social security benefits paid by one country to a resident of the other are taxable only in the country where the recipient lives. Retire in the US, and your German statutory pension is taxed only there. Retire in Germany, and your US Social Security is taxed only in Germany, as if it were a German pension. The treaty’s saving clause, which normally lets the US tax its citizens wherever they live, expressly leaves this rule untouched.
Tax rules depend on your whole situation. Have your own case checked by a tax adviser who knows both systems.
If you go back to the US
With fewer than 60 months of German contributions you can have your own share refunded after 24 months out of German insurance. From 60 months on you keep the right to pay voluntarily, which rules out a refund, and the German pension follows you to the US. The leaving Germany guide compares both routes.
Bottom line
Keep your German years: with five of them, or with US credits added, they become a lifelong pension that the US no longer offsets. Check whether a posting keeps you in US Social Security before you start, and get tax advice before you retire in either country.
Part of the German pension system. Related: Germany vs. the UK · social security agreements · pension taxes.
Frequently Asked Questions
Yes, if you qualify in each country on your own. Credits stay in the country where you earned them, and each country pays for its own periods. Adding up periods under the agreement only matters if you are short of the minimum in one of them.
With at least six US credits, the agreement can add your German periods to qualify you for a partial US benefit. It is reduced: the fewer US credits you have, the larger the reduction.
Yes. The Deutsche Rentenversicherung transfers pensions to accounts abroad and uses a special payment declaration for the USA. It pays the transfer to the first bank, while currency conversion and bank fees are yours.
Sources (as of 8 November 2026)
Sources (as of 8 November 2026)
- Social Security Administration, U.S.–German Social Security agreement, totalization agreements, list of agreements, retirement age and benefit reduction, how you earn credits, 2027 cost-of-living fact sheet and Social Security Fairness Act.
- Federal Register, SSA notices on the cost-of-living increase and other determinations for 2026 and for 2027; Social Security Fairness Act, Public Law 118-273.
- Internal Revenue Service, Topic 751 and Topic 554: Social Security and Medicare tax rates; US–Germany income tax treaty and protocol of 1 June 2006, Article 1 paragraphs 4 and 5, Article 18 paragraph 5.
- Deutsche Rentenversicherung, Work and pension in Germany and the United States; refunds under the agreement (in German); International: payments abroad.
- OECD, Pensions at a Glance 2025: replacement rates (Tables 4.1 and 4.4), retirement ages (Tables 3.5 and 3.6), contribution rates (Table 8.1).
Several SSA pages block automated downloads; we saved their content through a browser on 8 November 2026.