As of: February 7, 2024, 10:54 a.m
By: Nico Reiter
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Retiring before the normal retirement age is becoming increasingly popular.
Here's how to calculate whether it's worth it and what discounts will apply.
Munich – The retirement age is a hotly debated topic.
In 2024, the regular age limit for people born in 1958 will rise to 66 years.
For all younger people, the entry age increases in two-month increments.
For people born after 1964, the retirement age is 67.
Retiring so late is unthinkable for some.
A possible solution is early retirement, also known as pension at 63. However, it must be noted that deductions apply.
So is it worth stopping work earlier?
This should be carefully considered.
Using an online calculator, you can easily calculate how much money you will have left over at the end.
Early retirement – what deductions have to be paid in 2024?
People who retire at the regular retirement age do not have to pay any deductions and receive the full pension.
From the age of 63, an early retirement pension can also be used.
However, if you start earlier, deductions will be made from your pension.
The prerequisite: the recipients have already paid into the pension fund for 35 years of work.
If you retire earlier, deductions must be paid (symbolic image) © Future Image/Imago
For a pension with 35 years of insurance payments, 0.3 percent of the pension is deducted for each month that you retire earlier.
If you stop working four years before your normal age, 14.4 percent of your pension will be deducted, as an example from
Wirtschaftswoche
shows.
Insured people aged 50 and over have the option of making voluntary compensation payments before retirement in order to avoid having to pay deductions.
Nevertheless, this can result in a lower overall premium if payments have been made to the insurance company for a shorter period of time.
vintage |
Discounts for early retirement |
1964 |
14.4 percent |
1960 |
12.0 percent |
1956 |
10.8 (with protection of trust) / 9.6 percent (without protection of trust) |
For people who turn 63 next year, the normal retirement age is 66 years and 6 months if they were born in 1961.
This means that at the start of early retirement there would be a deduction of 12.6 percent.
For people who are one year younger and took early retirement the year before, the deduction was a maximum of 12.0 percent.
Exceptions – these groups of people receive early pensions without deductions
However, according to
Wirtschaftswoche
, there are also some exceptions where no deductions have to be paid or the normal retirement age is under 67.
On the one hand, long-term insured people who have paid into pension insurance for 45 years do not have to pay any deductions if they retire before 67.
On the other hand, the pension without deductions depends on the year of birth.
In 1953 the limit was still 63 years and rose gradually; 67 years was only considered the retirement age for all those born after 1964.
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For those who have been insured for a particularly long time, there are stricter regulations regarding which times are taken into account than for those who have been insured for 35 years.
Periods in which no pension insurance contributions were paid, such as illness, pregnancy, unemployment or training, are not included in the 45 years.
At age 35 they are partially taken into account.
According to the
German Pension Insurance,
some groups of people generally have a lower retirement age.
For people with severe disabilities, the standard retirement age is two years lower.
Instead of 67 years, 65 is expected here.
At this age you can retire with a disability level of 50 percent without deductions.
Different regulations also apply to people who worked in mining.
For people born in 1964 or later, the standard entry age is 62.
For an earlier year of birth at 60 years of age if the minimum insurance period has been fulfilled.
Early retirement is becoming increasingly popular – around half of new pensioners are under 67
In recent years, early retirement has been widely used in Germany.
According to the
DRV
, around half of those starting to retire have taken early retirement.
In order for this to work, you should apply for a pension around three months before your intended starting date.
Information and advice centers nationwide can be used to determine which regulations apply to each person and whether early retirement is worthwhile.