As of: February 17, 2024, 6:10 a.m
By: Maximilian Hertel
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Pensions are an ever-present topic.
Many people are particularly concerned about the question of pension levels in retirement.
A formula provides answers.
Bremen – While experts are calling for the abolition of the “pension at 63”, the so-called flexi pension encourages early retirement.
While the answer to the correct starting age is still being discussed, the question of how high the pension will be can be answered with a simple formula.
How to calculate your pension – the pension formula
Specifically, this is the pension formula that can be applied to the salary.
Individual variables are multiplied by defined parameters.
The annual gross income is taken into account in relation to the average income in Germany, the number of years worked, the pension factor, the access factor and the current pension value.
The resulting formula is as follows:
The pension formula
Pay points x access factor x pension type factor x current pension value = monthly pension amount
According to the German Pension Insurance (DRV), surcharges and discounts are taken into account by the access factor.
For example, if you retire early.
At the statutory retirement age of 67, the access factor is one.
The pension type factor is also set by law and varies depending on the type of pension.
The pension for total incapacity or old-age pensions also have the pension type factor of one.
With a gross monthly salary of €3,500 – that is the pension amount
The salary points in the pension formula are recalculated annually by comparing the individual salary with the gross average salary of all insured persons in Germany.
According to DRV, the average salary in 2024 will be 45,358 euros.
If you have an identical annual gross income, you will receive one salary point for your pension.
The salary points are therefore calculated using the gross income per year, divided by the average income of all insured persons in Germany.
The pension formula shows: This is how much pension you are entitled to with a gross income of 3,500 euros per month.
© IMAGO / Westend61
The current pension value is also adjusted annually to the economic situation and, according to the German pension insurance, is 37.60 euros (in both West and East Germany).
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Based on the current average earnings in Germany (45,358 euros) and the value one for the access and pension factor as well as the current pension value of 37.60 euros, the pension formula results in a monthly pension of 1566.74 euros (gross) with a gross salary of 3500 euros ).
The calculation was made under the simplified assumption that the annual gross income and the average income of all insured persons did not change over the entire period.
Monthly salary (gross) |
Monthly pension after 45 years of work |
|---|---|
€1500.00 |
€671.46 |
€2000.00 |
€895.28 |
€2500.00 |
€1119.10 |
€3000.00 |
€1342.92 |
€3500.00 |
€1566.74 |
€4000.00 |
€1790.56 |
€4500.00 |
2014.37 € |
The standard pension level in comparison - state pension increase is crucial
According to
allianz.de,
the pension level provides information about how the relationship between the standard pension and the average income has changed over a period of employment of 45 years.
The development of the pension level in Germany has fallen continuously since 2000: “While it was 52.9 percent in 2000, in 2010 it was only 51.6 percent.
However, since 2014 it has stabilized at around 48 percent.”
However, this does not necessarily mean that a falling pension level also leads to a lower pension actually paid out.
According to the insurance group's experts, the gross pension will continue to rise: "Pensions will continue to rise in the future due to pension increases, but not to the same extent as incomes." You can find out how you can retire early and still receive full benefits here.
The editor wrote this article and then used an AI language model for optimization at his own discretion. All information has been carefully checked. Find out more about our AI principles here.