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Retire at 55: This is how partial retirement works

2023-02-28T10:34:10.956Z


For many, that is the dream: to stop working at the age of 55. In principle, this is also possible, you just have to know how much money you need. However, there are also models such as partial retirement.


For many, that is the dream: to stop working at the age of 55.

In principle, this is also possible, you just have to know how much money you need.

However, there are also models such as partial retirement.

Berlin – Many people would like to retire earlier.

But there is always the fear of not making ends meet in old age.

It requires a lot of discipline and thrift at a young age in order to retire from working life at the age of 45 or 55.

Here we explain how to stop working at a younger age.

Retirement at 55: Retire earlier with partial retirement

From the age of 55, employees can start what is known as partial retirement.

This is an agreement that the employee makes with the employer.

With partial retirement, you gradually retire.

It is important to know that partial retirement is not a right, so the employer can also refuse it.

There are two models for partial retirement: the equal distribution model and the block model.

With the equal distribution model, previous working hours are immediately halved.

The salary is also halved and then increased by at least 20 percent.

The top-up amount can be higher and is also tax and duty-free.

The employer continues to pay at least 80 percent of the pension insurance contributions so that the employee has hardly any losses when they reach retirement age.

Calculation example in the uniform distribution model

An employee has a regular salary of 4,200 euros/month (gross) for a 40-hour week.

At the age of 55 he would now like to start his semi-retirement in the equal distribution model.

His working time is therefore reduced to 20 hours per week.

The salary is therefore initially reduced to 2,100 euros/month.

Then there is the 20 percent top-up amount, on which no taxes or duties are paid.

That's 420 euros/month here.

Depending on the tax class, the employee then has between 1,500 and 2,100 euros/month net.

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A man and a woman sit on a bench in bright sunshine.

© Patrick Pleul/dpa-Zentralbild/ZB/Symbolbild

In the block model, the time to retirement age is divided into two blocks of equal length.

In the first block, the employee continues to work as usual.

In the second block, he no longer works at all.

In the block model, the salary is halved throughout the entire period, i.e. in both phases.

Here, too, the employer must pay the top-up amount of at least 20 percent of the reduced salary.

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Calculation example in the block model

An employee has a regular salary of 4,200 euros/month (gross) for a 40-hour week.

At the age of 55 he would now like to start his semi-retirement in the block model.

Since he can retire at 63, the blocks are divided into two four-year blocks: for the first four years he continues to work 40 hours a week as usual.

However, his salary has already been halved to 2,100 euros/month.

Then there is the 20 percent top-up amount, on which no taxes or duties are paid.

That's 420 euros/month.

Depending on the tax class, the employee then has between 1,500 and 2,100 euros/month net.

After four years, at the age of 59, he stopped working completely, but continued to receive his part-time salary.

Retirement at 55: Even saving enough money is enough

In principle, of course, anyone can always stop working as long as they have saved enough money to live on.

There is a rule of thumb for this: In order to make ends meet in old age, you need 25 times the current annual cost of living.

So if you currently consume around 2,000 euros per month, you spend 24,000 euros a year.

In order to retire earlier, you must have saved 600,000 euros.

List of rubrics: © Patrick Pleul/dpa-Zentralbild/ZB/Symbolbild

Source: merkur

All news articles on 2023-02-28

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