As of: April 7, 2024, 9:28 p.m
By: Carmen Mörwald, Sandra Sporer
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The individual pension contribution can be calculated using the pension formula. With a salary of 2700 euros, big jumps are probably not possible in old age.
Munich – Enjoy life, travel, spoil your grandchildren and have time – and money – for your own hobbies. For more and more pensioners, this is just a pious wish. Instead, many expect poverty in old age. In 2021, according to statistics from the Federal Ministry for Family Affairs, 22.4 percent of people over 80 in Germany were affected by poverty. Like a pensioner who, despite extreme austerity measures, only has eight euros left per month. This means that more than a fifth of those affected had a maximum of 1,167 euros available per month. An example calculation shows that even with a gross monthly salary of 2,700 euros, you are not in a significantly better position.
How much pension do you get with a gross salary of 2700 euros? The pension formula reveals it
In order to understand how the future pension sum is made up, the so-called pension formula is of crucial importance. An information booklet from the German Pension Insurance explains that this consists of earnings points, the access factor, the current pension value and the pension type factor. The result of this calculation is the monthly pension amount. It is therefore not possible to determine in general terms how high the pension will be with a gross monthly salary of, for example, 2,700 euros.
Pension formula for old-age pension:
Monthly pension amount = earnings points x access factor x current pension value x pension type factor
When calculating, your own income - in this case 2,700 euros gross - is divided by the average income of all employees in order to determine the pay points for the respective year. The access factor takes into account deductions or surcharges at the time of retirement. The current pension value of 37.60 euros determines the amount due per earnings point. The pension type factor, however, varies depending on the type of pension.
Pension type |
factor |
Pensions due to old age |
1.0 |
Pensions due to partial disability |
0.5 |
Pensions due to total disability |
1.0 |
Education pensions |
1.0 |
Small widows' and widowers' pensions |
1.0 |
After the “death quarter” |
0.25 |
Large widows' and widowers' pensions |
1.0 |
After the “death quarter” |
0.55 |
Half-orphan pensions |
0.1 |
Orphan's pensions |
0.2 |
Source: German pension insurance
An important note: Anyone who receives the regular old-age pension and retires at the standard retirement age can ignore the access and pension type factor when calculating the monthly pension.
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Many pensioners are entitled to more pension points - but these are only available upon application
An example calculation shows how high the pension would be with a gross monthly salary of 2,700 euros
In practice, consumers have to compare their annual salary with the German average income in order to calculate their annual salary points, which they need to calculate their pension. To simplify things, we assume that a constant gross monthly salary of 2700 euros was earned over a period of 50 years - which is of course unrealistic. In this case, the gross annual income is 32,400 euros.
The average gross salary of all insured persons for 2024 is 45,358 euros. According to the German Pension Insurance, the federal government sets this provisional value with the approval of the Federal Council. It is based on data from the Federal Statistical Office. In order to determine the salary points, the ratio of the annual salary of 32,400 euros to the current average income of 45,358 euros must now be calculated - the result: 0.71.
Many employees fear that they will not have enough to live on in old age. Because there is often not much left of your original salary when you retire. © Ralf Homburg/IMAGO
In the next step, this value of 0.71 is multiplied by the total number of working years. As already mentioned, it is assumed that a gross monthly salary of 2,700 euros was received for 50 years. This results in exactly 35.5 pay points. In the “pension estimator” provided by the German Pension Insurance, the value can only be rounded down to 35 or up to 40, which is why we have calculated the pension value using 35 earnings points.
The result: With a constant gross monthly salary of 2,700 euros over a period of 50 years, consumers who receive the regular old-age pension would receive a gross pension of 1,316 euros. That is almost 150 euros more than the maximum income of the 22.4 percent of those affected by old-age poverty in 2021. However, it is important to note that the value of 1316 euros may vary more or less depending on individual factors.
The sample calculation is summarized in a nutshell:
2700 euros monthly salary × 12 = 32,400 euros annual salary
32,400 euros annual salary: current average salary of 45,358 = 0.71 salary points
0.71 salary points × 50 years of work = 35 salary points rounded down
35 earnings points rounded down × current pension value of 37.60 euros = 1316 euros pension
In order to ease the burden on future pensioners, it is planned to increase pensions in the summer of 2024, taking wage developments into account. Nevertheless, dissatisfaction is growing because even if pensions are adjusted annually to reflect wage developments, this is unlikely to be enough to combat increasing poverty in old age. Some politicians and associations are therefore calling for a further increase in the minimum wage to 14 euros per hour. This is the only way to earn a pension above the subsistence level. (
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