You pay into a retirement fund as long as you work (Rentenversicherung). When you retire you then get a monthly payment from there. By now, due to more old peop

You pay into a retirement fund as long as you work (Rentenversicherung). When you retire you then get a monthly payment from there. By now, due to more old people and fewer young people, the amount you'd get is getting lower. To combat that there are various ways people invest money for retirement. Betriebliche Altersvorsorge is one, where a part of your income is deducted before taxes. There is Riester-Rente, which is state-sponsored to some degree. Of course, some people choose to invest into property, but there are lots of other options with varying flexibility and payoffs. In general, even if you don't do anything towards your retirement (apart from working your working life), you still have some security as you age. But such provisions are probably one very major difference between the US and Germany.