In Germany, people can retire earlier after 35 years of contributions.
A step that should be carefully considered.
Because mostly it doesn't work without deductions.
Update from February 20, 2023:
The tax return is always a bunch of annoying paperwork that one would like to do without.
This is no different for pensioners than for other people.
But pensioners can avoid the hassle of filling it out: the tax return is always a heap of annoying paperwork that one would like to do without.
24hamburg.de reveals which pensioners do not have to submit a tax return.
Update from February 18, 2023:
Useful knowledge: Pensioners in particular are faced with the question of whether the health insurance company will pay for a second medical opinion before major operations.
We clarify.
First registration:
Hamburg – In Germany, people in the statutory pension insurance have two options for retiring earlier: anyone who has paid into the pension fund for 45 years can, in principle, retire earlier without deductions.
The second option is the "old-age pension for long-term insured persons".
But with the second variant, there are conditions that must be met for the step into retirement.
Because: Anyone who decides on the second option, early retirement, must be at least 63 years old (exceptions in the case of severe disabilities) and have 35 years of contributions.
According to the German Pension Insurance (DRV), the
following are taken into account
:
Contributions from employment or self-employment.
Voluntary contributions that you paid alone.
Child-rearing times for the first 2.5 or 3 years of life.
Months of non-profit home care.
Months from a pension equalization in the event of a divorce.
Contributions for mini-jobs that you paid together with your employer.
Months from a pension split between spouses or registered civil partners.
Replacement times: for example, months of political persecution in the GDR.
Credited periods: periods in which you are unable to pay pension insurance contributions for personal reasons, for example due to illness, pregnancy, unemployment, school education and studies.
Consideration periods: for example, periods of raising a child who is less than ten years old.
Pension after 35 years of contributions: Those born after 1964 have the highest losses
While you can retire after 45 years of work without deductions, this can be quite expensive for people who want to stop after 35 years, writes Stiftung
Warentest
.
Only people who were born between 1949 and 1963 can retire without a deduction before their 67th birthday.
Meanwhile, those who were born after 1964 have to accept financial losses, which is due to the fact that the retirement age in Germany is gradually being raised.
Depending on when you stop working early and retire, this can be up to 14.4 percent lower – for the rest of your life.
Because for every month that you retire before the standard retirement age, 0.3 percentage points are deducted.
Expert recommends advice before applying for a pension after 35 years of contributions
For example, for an employee born in 1970, the retirement age is 67 years.
If, after 35 years of contributions, he decides to retire at the age of 63, he still has to accept four years of deductions.
48 months times 0.3 is 14.4 percent.
If he wants to retire at the age of 64, 10.8 percent will be deducted from him.
Ultimately, every employee has to decide for themselves whether it makes sense to retire earlier and risk deductions.
Before applying, everyone should seek advice, recommends expert Silke Pottin from the DRV Bund in Berlin.
Retire early: Early retirees have to choose between more free time and less money
Ralf Scherfling from the North Rhine-Westphalia consumer advice center in Düsseldorf advises looking at the need.
"Do I want to travel, enjoy the garden, make major purchases or earn extra money in addition to my pension
?
"
The advantages of an earlier pension are obvious: Those who stop working early not only protect their health, but also have more time for hobbies, family and to realize projects or dreams.
But can you afford it?
(mt)
