Inflation and purchasing power: what your securities account will really be worth in 30 years
Inflation decides what your account balance will really be worth in retirement. Two percent a year sounds harmless and halves purchasing power in about 35 years. Every model calculation for the Altersvorsorgedepotthat does not show this looks better than it is.
Table of contents
Nominal and real
Nominal is the number in your securities account. Real is what you can buy with it. Inflation lies in between. Over the term of a retirement plan, that difference turns into a chasm.
The European Central Bank aims for around two percent over the medium term. For planning over thirty or forty years that is a usable starting value. No more than that. In recent decades there have been phases with considerably less and years with considerably more.
How quickly does purchasing power halve?
Divide 70 by the inflation rate. At 2% it takes around 35 years, at 3% only 23.
What the numbers actually mean
| Period | €100,000 at 2% inflation | at 3% inflation |
|---|---|---|
| 20 years | around €67,300 | around €55,400 |
| 30 years | around €55,200 | around €41,200 |
| 40 years | around €45,300 | around €30,700 |
Purchasing power in today’s euros, rounded.
A typical model calculation makes it clear. Anyone paying in €100 a month for 40 years and achieving 6 percent ends up with around €199,000 in their securities account. In today’s purchasing power, at two percent inflation, that is about €90,000. Still twice the €48,000 paid in, but not the four times the nominal figure suggests.
Why guarantees are dangerous in real terms
A contribution guarantee of 100 percent promises that at the end at least the money paid in will be there. In nominal terms that is true. In real terms it is a losing proposition, because anyone who gets back exactly their contributions in nominal terms over thirty years has lost about 45 percent of their purchasing power.
That is why the legislator abolished the guarantee requirement that broke the Riester pension’s neck. Security in the nominal sense and security in the sense of preserving purchasing power are two different things, and over long periods they almost rule each other out.
Letting the contribution grow along
Anyone who starts in 2027 with €150 a month and never adjusts that amount is saving only around €100 in real terms in 2047. The contribution quietly shrinks.
Two routes help against this. Either an escalation clause in the contract that raises the contribution by a fixed percentage each year, or a rule of your own: raise the contribution in the same proportion with every pay rise. The second route is more flexible, costs nothing and can be suspended again in bad years without asking the provider.
Two examples
Timo, 30, is planning on €1,200 in supplementary pension from 67. In 37 years, at two percent inflation, that corresponds to today’s purchasing power of around €575. He doubles his target because he wants to think in today’s euros.
Claudia, 52, has an offer with a 100% contribution guarantee on the table. With 15 years remaining and a low equity allocation, she ends up just above her contributions in nominal terms. In real terms that would be around 25 percent less purchasing power. She opts for a variant without a full guarantee.
Frequently asked questions about inflation and purchasing power
What inflation rate should I use in my calculations?
Two percent is a common planning value. If you want to be more cautious, use two and a half.
Does an equity ETF protect against inflation?
Over the long term usually yes, because companies adjust their prices. In the short term it can still slump, especially in inflationary phases.
Does the statutory pension rise with inflation?
It follows wage developments, not prices directly. In years with high inflation it therefore lags behind.
Does the AVD calculator factor in inflation?
Yes, but not on its own. In the Altersvorsorgedepot calculator Plus inflation is shown under “Individual assumptions” and is preset to 2%. You only see purchasing power in today’s euros once you switch on “Also show real values”. The pension gap calculator by contrast shows purchasing power automatically.
Is the payout adjusted for inflation?
With a life annuity generally not; it stays nominally constant. That is an often overlooked disadvantage compared with the drawdown plan.
Why does inflation appear in hardly any advertising?
Because nominal figures look more impressive. Ask about the real value with every offer.
What should you take away?
Think in today’s euros. And treat a nominal guarantee not as security, but as what it is over thirty years: a guaranteed real loss.
Last updated: July 2026. Sources: BMF, German federal government, Bundestag printed paper 21/4088, Deutsche Rentenversicherung.
Keep calculating and reading
pension gap calculator — estimate the gap between your final net income and the statutory pension.
All terms at a glance: Glossary from A to Z.
Official sources and further information
- Federal Ministry of Finance, FAQ on the reform of private retirement provision
- German federal government, private retirement provision reform
- German Bundestag, resolution on the Altersvorsorgedepot (calendar week 13/2026)
- Bundestag printed paper 21/4088 (PDF)
- Deutsche Rentenversicherung, reform announcement
- Stiftung Warentest, Altersvorsorgedepot
- Verbraucherzentrale, the new Altersvorsorgedepot: opportunity or sales trap?