How Much Can a Working Couple Save in Germany?
Germany, known for its strong economy and high living standards, is an attractive destination for many professionals. But how much can a couple, both working in Germany, realistically save? Let's delve into the details.
Income in Germany
The average annual wage in Germany was €45,457 per year in 2022⁶. Assuming both individuals in a couple are earning this average wage, their combined gross annual income would be €90,914.
Taxation in Germany
Germany has progressive tax rates ranging from 14% to 42%, with a top rate of 45% for very high earnings⁷. For our hypothetical couple, assuming they fall within the 42% tax bracket, their combined after-tax income would be approximately €52,730.
Cost of Living in Germany
The cost of living in Germany varies depending on the city and lifestyle. However, on average, a single person's estimated monthly costs are €954.3, excluding rent¹. For a couple, this would amount to €1,908.6 per month or €22,903.2 per year.
Rent is a significant part of living expenses. Monthly rent for a furnished 85 m2 accommodation in a normal area averages around €1,577². So, yearly rent for such an accommodation would be €18,924.
Savings Potential
Subtracting the total yearly living expenses (€22,903.2 for living costs and €18,924 for rent) from the after-tax income (€52,730), the couple could potentially save around €10,902.8 per year.
However, this is a rough estimate. Actual savings can vary based on factors like lifestyle choices, city of residence, unexpected expenses, and personal financial goals. Moreover, the couple could potentially increase their savings by investing in high-interest savings accounts, which offer interest rates ranging from 0.31% to 4.02%[^10^].
In conclusion, a working couple in Germany can save a substantial amount annually, making Germany an attractive place for professionals seeking a balance between a comfortable lifestyle and the ability to save for the future.
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