Pension and work: Stiftung Warentest shows how late retirement can be worthwhile

Created: 03/23/2022, 16:30

By: Lisa Mayerhofer

More and more older people are working past retirement age.

(Archive image) © Simona Piolla/imago-images

More and more older people are working past retirement age.

Stiftung Warentest shows when work and retirement are most lucrative.

Berlin - The situation of older people on the job market has changed significantly in recent years, according to the Federal Statistical Office.

According to statistics, the labor force participation rate of 60 to 64 year olds in particular has increased more than in any other age group and has grown from 41 percent to 61 percent in the last ten years.

But even among 65 to 69 year olds, the proportion rose from nine to 17 percent.

Stiftung Warentest: Combination of salary and pension the most lucrative

According to Stiftung Warentest, it can be worth retiring later and continuing to work.

According to Stiftung Warentest, anyone who has reached retirement age and is considering continuing to work has three options:

• 1. Combine standard old-age pension and work, i.e. receive pension and salary.

  
  

  2. Not applying for the pension and continue to live on the salary.

  
  

  3. Retire early and keep working.

According to the magazine, the first option is the most lucrative.

Because: anyone who draws an old-age pension can earn unlimited additional income without the pension* being reduced.

There are two variants.

With the first, pensioners no longer have to pay pension contributions via their salary and thus receive a net salary that is around 9.3 percent higher.

But the second variant is even better: the working pensioners continue to pay into the pension insurance and thus receive a higher pension.

According to Stiftung Warentest, this investment pays off after several years.

Less lucrative: delay retirement and keep working

The second option is to wait until later to apply for a pension and continue to draw only your salary.

This increases the pension entitlement - but this also means that you miss out on the pension that you would already get, writes Stiftung Warentest.

The magazine explains that it is only worth continuing to pay into the pension insurance system and only receive a salary if you get very old.

Anyone who retires early as an early pensioner can also earn extra money - and usually has to.

Because early retirees receive a much smaller pension than those who work up to the standard retirement age.

However, a lot has happened with the regulations: early retirees can now earn up to 46,060 euros a year without their pension payments being reduced.

The regulation, which was introduced because of the corona pandemic, will initially apply until the end of this year.

Habeck for a voluntary higher retirement age - the union is against it

In any case, politics, business and society are faced with the challenge of an imminent shortage of skilled workers when the baby boomer generation retires in the next few years.

Economics Minister Robert Habeck (Greens) has therefore brought a voluntary higher retirement age into play. 

Habeck told the

that there should be longer working lives on a voluntary basis.

“You should be able to work flexibly longer.

That would be a double benefit: if you want, you can contribute your knowledge, your skills and your experience for a longer period of time.

Companies and society can benefit from this.

And we could counteract the shortage of skilled workers.

So we should be talking about something like a retirement window, not a fixed age.”

Anja Piel, board member of the German Federation of Trade Unions, on the other hand, told the dpa: "What the minister should know: Even today, every employee can continue to work beyond the statutory standard age if he or she is healthy enough to do so.

The applicable law does not prohibit that.” It even sets the required incentives.

According to Piel, the real problems do not lie in pension law, but rather in the labor market, which is "walled up" for many older employees, and in the rare jobs that are suitable for the elderly.

“They are urgently needed so that employees can work up to the standard retirement age at all.

Here the Federal Minister of Economics Habeck would be asked to make tough demands on employers so that older employees can still be hired and then be able to work healthy and under good conditions until they retire.”