As of: March 13, 2024, 3:10 p.m
By: Karolin Schaefer, Sandra Sporer
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Every year a pension letter ends up in the mailbox.
This contains information about how much pension you can expect in various scenarios.
Bremen – The topic of pensions not only concerns every single person privately, but also repeatedly determines the public debate.
Stories regularly make the rounds about people who can barely make ends meet in old age, even though they have worked all their lives.
Such as the case of a pensioner who relies on the help of family and friends to pay for food, medicine, etc.
Many people therefore wonder how much money they will have available in retirement.
The pension letter provides information about this.
If the projections there show that a rather small pension can be expected, it may be worthwhile to make additional private provisions.
Here is an overview of what information the pension letter contains.
How much will my pension be?
Pension letter provides information about the expected standard old-age pension
Pension information is sent once a year from the age of 27.
It provides information about the current status of acquired pension entitlements.
And contains a forecast about the expected amount of the old-age pension as well as the pension entitlements in the event of possible disability.
Pension information is sent annually from the age of 27.
© Lobeca/IMAGO
The German Pension Insurance explains: “This is based on a contribution payment that is the average for the last five calendar years.” The pension information is also sent abroad.
From the age of 55, the information is replaced by pension information, which is provided every three years.
This information is contained in the pension information:
Retirement date:
In order to be able to retire without deductions (standard old-age pension), you must reach an appropriate age and be insured for at least five years.
The date on which the standard old-age pension can be started is noted in the letter.
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
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Pension information only provides gross values - however, any deductions due should not be ignored
However, it is important to remember that only gross values are listed in the pension letter.
Social security contributions must be deducted from the forecast pension amount.
These include contributions to health and nursing care insurance and possibly taxes.
Pensioners have to pay 7.3 percent for health insurance 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 four percent.
In addition, the pension may be taxable.
This mainly depends on the year of retirement, according to the German Pension Insurance.
Anyone who retired in 2005 had to pay tax on 50 percent of their gross pension.
This percentage increases every year.
From 2040 there will probably no longer be any pension allowance.
The monthly amount in the account must then be fully taxed.
If you ever run out of money, your pension can still be increased in retirement.
The editor wrote this article and then used an AI language model for optimization at her own discretion. All information has been carefully checked.
Find out more about our AI principles here.