How much money can I build with an ETF savings plan?

It depends on three factors: savings rate, investment horizon, and return. With EUR 200 monthly, 7% return, and a 20-year horizon, you end up with approximately EUR 104,000 -- from only EUR 48,000 in contributions. The longer the period, the stronger the compound interest effect. Over 30 years, the same example grows to over EUR 243,000. Use our calculator to compute your individual situation.

What return is realistic for ETFs?

Broadly diversified equity ETFs (e.g., MSCI World) have historically achieved an average return of 7-8% per year, before costs and inflation. After deducting the TER (typically 0.10-0.50%) and inflation (approx. 2%), a real return of about 4-5% remains. However, there are no guarantees: in individual years, returns can range from -40% to +40%. What matters is the long-term average over at least 10-15 years.

What is the advance lump sum tax and how is it calculated?

The advance lump sum (Vorabpauschale) is an annual prepaid tax on unrealized ETF gains that has applied in Germany since 2018. It is calculated as: Base return = Fund value at start of year x base interest rate (2025: 2.29%) x 0.7. The advance lump sum is capped at the actual gain for the year. The partial exemption (30% for equity funds) is deducted, then the tax-free allowance (EUR 1,000 / EUR 2,000). Capital gains tax of 25% plus solidarity surcharge applies to the remaining amount.

How does partial tax exemption work for ETFs?

Partial tax exemption exempts a portion of ETF returns from taxation: 30% for equity funds (at least 51% stock share), 15% for mixed funds (25-50% stock share), 0% for other funds. An equity fund ETF with EUR 1,000 in gains is thus taxed on only EUR 700. At 25% capital gains tax plus 5.5% solidarity surcharge, this results in an effective tax burden of approximately 18.5% instead of 26.4%. The partial exemption applies both to the advance lump sum and upon sale.

How long will my ETF wealth last with monthly withdrawals?

It depends on the ratio between withdrawal rate and return. With EUR 200,000 capital, EUR 1,000 monthly withdrawal, and 4% return (after TER), the wealth lasts approximately 25 years. The classic 4% rule states: If you withdraw a maximum of 4% of your capital annually, you can maintain your wealth with high probability over 30 years. Important: Inflation increases withdrawal needs over time -- our calculator accounts for this.

What is compound interest and why is it so important?

Compound interest means your gains themselves generate gains. At 7% return, your capital roughly doubles every 10 years. But the effect accelerates: in the first 10 years, EUR 200/month grows to about EUR 35,000. In the second 10 years, another EUR 69,000 is added -- even though you contribute the same amount. After 30 years, the total is EUR 243,000, of which EUR 171,000 is pure capital gains. This shows: time is the most important factor in investing.

How do fund costs (TER) affect long-term returns?

The TER (Total Expense Ratio) is deducted annually from fund assets and acts as a return killer through the compound interest effect. With EUR 200/month over 30 years: At 0.2% TER, you reach approximately EUR 234,000, but at 0.5% TER only about EUR 222,000 -- a difference of EUR 12,000. At 1.5% TER (typical for active funds), the result drops to about EUR 190,000. This is why financial experts recommend low-cost index ETFs with a TER below 0.3%.

Should I invest monthly or as a lump sum?

Statistically, a lump sum investment achieves higher returns because the money works in the market longer (in about 66% of cases, lump sum beats regular investing). But: a monthly savings plan offers the cost-averaging effect -- you buy more shares when prices are low and fewer when high. For most investors, the savings plan is the better choice because: a) most people don't have large capital for a lump sum, b) a savings plan is psychologically easier to maintain, c) timing risk is reduced.

How are ETF gains taxed in Germany?

ETF gains in Germany are subject to capital gains tax: 25% Abgeltungssteuer plus 5.5% solidarity surcharge (effectively 26.375%). With church tax obligation, the capital gains tax is slightly reduced (formula: 25% / (1 + church tax rate)), but church tax is added on top. Tax-free allowance: EUR 1,000 per person (EUR 2,000 for married couples). Important: The partial exemption reduces taxable returns (30% for equity funds). Additionally, the annual advance lump sum tax (Vorabpauschale) is levied on unrealized gains.

What is a safe withdrawal rate?

The most well-known rule of thumb is the 4% rule from the Trinity Study (1998): If you withdraw a maximum of 4% of your initial portfolio value (inflation-adjusted) annually, historically you would have had capital remaining after 30 years in 95% of cases. For a portfolio of EUR 500,000, that would be EUR 20,000 per year or EUR 1,667 monthly. However: the study is based on US data. For Europe, many experts recommend a more conservative rate of 3-3.5%. Our calculator shows you exactly how long your capital lasts at different withdrawal rates.

ETF Savings Plan 2026: How to Build Wealth -- and How Long It Lasts | ETF Savings Plan Calculator

<h2>ETF Savings Plans: The Most Efficient Path to Long-Term Wealth</h2>

<p>An ETF savings plan is today's most popular method for private investors to systematically build wealth. Over 4 million Germans already have ETF savings plans -- and the trend is strongly upward. The reason is simple: ETFs combine broad diversification, low costs, and easy management. In this comprehensive guide, we explain everything you need to know about ETF savings plans in 2026 -- from your first monthly contribution to your retirement withdrawal strategy.</p>

<p>Use our <a href="/en/etf-savings-plan-calculator">ETF Savings Plan Calculator</a> to calculate your individual result: How much wealth will you build, how long will it last, and what do fees really cost you?</p>

<h2>What Is an ETF Savings Plan?</h2>

<p>An ETF (Exchange Traded Fund) is an exchange-listed index fund that tracks a specific index -- for example, the MSCI World (1,500+ companies worldwide) or the FTSE All-World (4,000+ companies). A savings plan automatically buys shares of this ETF every month for a fixed amount. The advantage: You don't need to select individual stocks, conduct market analyses, or make complicated investment decisions.</p>

<p>Most brokers offer ETF savings plans starting at EUR 25 per month, many even without order commissions. This makes ETF savings plans the most democratic form of investing: Everyone can participate, regardless of income.</p>

<h2>How Does Compound Interest Work in an ETF Savings Plan?</h2>

<p>The compound interest effect is the real engine of wealth building. It means: Your gains themselves generate gains. With accumulating ETFs, dividends are automatically reinvested so that compound interest can work optimally.</p>

<p>A calculation example illustrates the effect: With EUR 200 monthly savings and 7% average return, after 10 years you have approximately EUR 35,000 (from EUR 24,000 in contributions). After 20 years, it's already EUR 104,000 (EUR 48,000 contributed). And after 30 years, EUR 243,000 -- from only EUR 72,000 in contributions. The remaining EUR 171,000 is pure capital gains from the compound interest effect.</p>

<p>This shows: The most important factor is not the savings amount but time. The earlier you start, the more compound interest works for you.</p>

<h2>What Return Is Realistic?</h2>

<p>The MSCI World has achieved an average return of approximately 7-8% per year since 1970 (including dividends, before costs). However, it's important to note: This return is a long-term average. In individual years, returns can fluctuate strongly -- from -40% (as in 2008) to +30% (as in 2019). That's why an investment horizon of at least 10 to 15 years is crucial.</p>

<p>For conservative planning, many financial experts recommend calculating with 5-6% after costs. Those who plan more optimistically can use 7%. Our calculator offers a three-scenario view where you can compare pessimistic, realistic, and optimistic outcomes.</p>

<h2>Costs: Why the TER Matters So Much</h2>

<p>The TER (Total Expense Ratio) is the annual management fee of the ETF. It's automatically deducted from fund assets -- you won't see it on your statement, but it reduces your return. Typical values for equity ETFs range from 0.10% to 0.50% per year.</p>

<p>The difference sounds minimal but compounds enormously over decades: With EUR 200 monthly and 30 years, the difference between 0.2% and 0.5% TER is approximately EUR 12,000. Between 0.2% and 1.5% (typical for actively managed funds), it's even over EUR 44,000. That's money that should stay in your pocket.</p>

<h2>Taxes on ETFs in Germany 2026</h2>

<p>The German tax system for ETFs comprises three essential components: the advance lump sum tax (annual pre-tax on unrealized gains), the partial exemption (tax benefit for equity funds), and capital gains tax upon sale.</p>

<p><strong>Tax-free allowance:</strong> EUR 1,000 per person (EUR 2,000 for married couples) remains tax-free. Make sure to set up a Freistellungsauftrag (exemption order) with your broker.</p>

<p><strong>Advance lump sum (Vorabpauschale):</strong> Since 2018, an annual advance tax on unrealized gains has been levied. The calculation is based on the base interest rate (2025: 2.29%) multiplied by 0.7. For an ETF holding of EUR 50,000, the advance lump sum is approximately EUR 802. After partial exemption (30% for equity funds) and the tax-free allowance, little to no tax often remains.</p>

<h2>The Withdrawal Phase: How Long Will Your Wealth Last?</h2>

<p>Building wealth is only half the story. Equally important is the question: How do you withdraw your money in retirement without depleting it too quickly?</p>

<p>The most well-known rule of thumb is the 4% rule: If you withdraw a maximum of 4% of your initial portfolio value annually (inflation-adjusted), historically you would have had capital remaining after 30 years in 95% of cases. With EUR 500,000 in wealth, that would be EUR 20,000 per year or EUR 1,667 monthly.</p>

<p>However, this rule comes from a US study. For Europe, many experts recommend a more conservative rate of 3-3.5%. Our calculator shows you exactly how long your capital lasts at different withdrawal rates and return assumptions -- including inflation and taxes.</p>

<h2>Conclusion: Start Now, Not Tomorrow</h2>

<p>The most important tip for ETF savings plans can be summarized in one sentence: Start now. Every month you begin earlier gives compound interest more time to work. Whether EUR 50 or EUR 500 per month -- the main thing is that you start. You can adjust the savings rate at any time.</p>

<p>Calculate your personal result with our <a href="/en/etf-savings-plan-calculator">ETF Savings Plan Calculator</a> and see how different scenarios affect your wealth.</p>