Pension: This is how much you need to earn to make ends meet in old age

Created: 01/24/2022, 10:32 am

By: Patricia Huber

The calculation of the pension is a mystery to many.

But with a simple formula, you can use the hourly wage to calculate how much money you will later receive.

Munich - a lot of work for little pension?

That can happen, because the later pension depends primarily on the development of the salary.

So if you want to know now how much money you can expect to have in old age, you can use the pension formula to find out for yourself.

According to the German Pension Insurance (DRV), the average annual salary is currently EUR 41,541.

The so-called pension points are calculated on the basis of this average.

So if you earn exactly 41,541 euros a year, you will receive 1.0 pension points at the end of this year.

The value of a pension point is currently EUR 34.19 in the old federal states and EUR 33.23 in the new federal states.

As a pensioner, this is how much you get paid out per pension point every month.

However, this value can change again and again.

Editor's note

This article was originally published on 10/15/2021

released.

Since it's still relevant to our readers, we've reposted it on Facebook.

Pension: How to calculate how much money you will receive in old age

An example: Whoever earns exactly the corresponding average salary for one pension point, i.e. currently 41,541 euros, in West Germany for 45 years has exactly 45 pension points at the end.

According to the pension formula, this means 45 times the current 34.19 euros and thus results in a monthly pension of 1538.55 euros per month.

In the final calculation, surcharges and deductions (access factor) as well as the pension type factor - usually reaching the retirement limit - would have to be taken into account.

In our example, we assume that there are no surcharges or deductions and that the type of pension is an old-age pension.

Pension formula for the old-age pension according to the German pension insurance:

Pay points x access factor x current pension value x pension type factor =

But how much do you have to earn with a weekly working time of 37.7 hours in order to get a gross annual salary of 41,541 euros and thus 1.0 pension point?

has calculated how much an employee has to earn per hour in order to be above the average pension, i.e. 1538.55 euros per month.

This amount is also known as the basic pension.

Retirement pension: That's what it takes to survive

Pension expert Johannes Steffen explained to

that an hourly wage of 16.27 euros is currently necessary in order to make ends meet later as a single pensioner without support.

From 21.19 euros you would receive the basic pension of 1538.55 euros.

Because if you earn 21.19 euros an hour all year round in a full-time job with 37.7 hours a week, you end up with exactly the average annual salary of 41,541 euros and thus one pension point.

If you work exactly like that for 45 years, you get the basic pension.

A hairdresser in Munich with a collective wage of 12.08 euros would only have a pension of a good 870 euros a month and would therefore be dependent on help from the state.

It could also become scarce for bakers and confectioners.

The current collective wage for trained specialists with at least two years of professional experience is 15.22 euros in Bavaria.

After 45 years of work, that would result in a monthly pension of a good 1105 euros.

Pension entitlements have a limit

On the other hand, those who earn more in the course of their working life can also expect a higher pension.

However, there is also a limit.

This is 85,200 euros per year in the west and 80,400 euros in the east.

Thus, even top earners can never receive more than 2.05 pension points in the west and 1.94 pension points in the east.