As of: March 11, 2024, 5:56 a.m
By: Karolin Schaefer
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How much will my pension be?
Many people ask themselves this question long before retirement.
The annual pension letter provides an overview.
Frankfurt – Hardly any other topic is discussed as much as pensions in Germany.
With the flood of information, it's not that easy to keep track of things.
So what's the deal with the pension letter that lands in your mailbox every year?
Extrapolation and standard old-age pension: What is pension information?
From the age of 27, everyone will receive personal pension information.
This will inform you about the current status of your acquired pension entitlements.
In addition, an extrapolation of the amount of the expected retirement pension as well as the pension entitlements in the event of a possible reduction in earning capacity is given.
The pension information provides an overview of the current pension entitlement.
© Guido Schiefer/imago
“The basis for this is a contribution payment that is the same as the average for the last five calendar years,” informed the German Pension Insurance.
Pension information is also sent abroad.
From the age of 55, the letter is replaced by a pension statement, which is sent out every three years.
This information is contained in a pension information:
Standard old-age pension:
In order to be able to retire without deductions, you must reach an appropriate age and be insured for at least five years.
Loss of earning capacity:
Here you can find out how high your disability pension would be if you were unable to work for more than three hours a day due to health restrictions.
Standard old-age pension:
Here you can find out how high your entitlement to an old-age pension would be without further payments.
Extrapolation: You can see how high your retirement pension would be if you continued to earn as before.
Pension adjustment:
Due to regular pension adjustments, the actual retirement pension may be higher.
Loss of purchasing power (inflation):
Since the gap between pension and income is increasing, you should take inflation into account when planning for retirement.
The average inflation rate over the past ten years was 2.2 percent.
This is what annual pension information looks like.
© German pension insurance
Net pension: You must deduct these contributions from the projection
But be careful: only gross values are stated in the pension letter.
Social security contributions still have to be paid from the expected pension amount.
These include health and nursing care insurance contributions and, if applicable, taxes
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For health insurance, 7.3 percent must be paid by the pensioners themselves.
There is also the additional contribution, which averages 1.7 percent.
The uniform contribution rate for long-term care insurance is currently 3.4 percent; for those without children it is 4 percent.
In addition, the pension may have to be taxed under certain circumstances.
This depends primarily on the year in which retirement begins, the German Pension Insurance announced.
Anyone who retired in 2005 had to pay tax on 50 percent of their gross pension.
This percentage increases every year.
From 2040 onwards there will probably no longer be any pension allowance.
Whatever ends up in the account every month must then be fully taxed.
It can be worthwhile to pay into the pension fund even with a mini-job.