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Important changes for pensioners: New rules for deductions on early retirement, retirement limits and taxes


Highlights: Important changes for pensioners: New rules for deductions on early retirement, retirement limits and taxes. New tax benefits and age limits for the start of retirement in 2024. Existing pensions are not affected by this tax relief, but traffic light coalition is planning a tax-free inflation premium, which has not yet been decided with a mark and must be provided with a question mark. The full pension will not be 100 percent taxable until 2058, so new pensioners would only have to pay on 83 percent while new. pensioners will only pay retroactively 100 percent.

Status: 04.12.2023, 14:02 PM

By: Amy Walker

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There will also be some innovations for pensioners in 2024. For example, there are new tax benefits and age limits for the start of retirement.

Berlin – Anyone who pays into the German Pension Insurance or already receives a pension from it should also be prepared for some changes in 2024. For pensioners, these are sometimes also associated with relief and simpler rules. Other innovations, however, are less welcome. Here is an overview of all the changes to pensions from 1 January 2024.

Age limits for retirement are increasing – for "retirement at 63" and for regular retirement

The regular retirement age for new retirees will rise to 66 in January. This applies to insured persons born in 1958. For those born later, the age of entry continues to increase in 2-month increments. In 2031, the regular age limit of 67 years will be reached. The following table shows when which cohorts can retire:

VintageYear of retirement
19592025 / 2026
19602026 / 2027
19612027 / 2028
19622028 / 2029
19632029 / 2030
after 1964always at the age of 67

Analogous to the regular retirement age, the retirement age for those who have been insured for a particularly long time will also increase. In everyday use, this is often referred to as "retirement at 63". From 2024, the age limit for long-term insured persons will rise to 64 and four months, which will affect those born in 1960 for the first time. For those born later, the entry age will continue to increase until 2029, when the age limit of 65 years is reached. Anyone who has been insured in the statutory pension insurance scheme for at least 45 years can claim the retirement pension without deductions for particularly long-term insured persons.

In addition, there is a pension for long-term insured persons, i.e. those who have paid into the pension insurance for 35 years. This group can retire at 63, but only in conjunction with a discount. In other words, they receive less pension than they would be entitled to if they continued to work until the standard retirement age. From 1 January 2024, this discount will increase to increase the incentive to work longer. For insured persons born in 1961 who will turn 63 next year, the normal retirement age is 66 years and 6 months. However, if these people retire at the age of 63, the discount is 12.6 percent. For insured persons born in 1960, the deduction was still a maximum of 12.0 percent.

Changes for people with reduced earning capacity: pension and additional earnings

Anyone who receives a disability pension should also be aware of a few changes from 2024. From January, for example, the additional earnings limit for people with reduced earning capacity will increase. In January, there will be a minimum annual additional earnings limit of 37,117.50 euros for pensions due to partial disability, and 18,558.75 euros for pensions due to full disability.


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Currently (2023), these additional earnings limits are 35,647.50 euros for partial disability, and 17,823.75 euros for pensions due to full disability.

Pensions and taxes: From 2024, the tax-free portion will change

Also new this year for new pensioners is the proportion of pensions on which taxes have to be paid. From January 2024, the taxable pension portion will increase from 83 to 84 percent. This means that 16 percent of the first full gross annual pension remains tax-free. Existing pensions are not affected by this.

However, the traffic light coalition is planning a tax relief, which, however, has not yet been decided and must therefore be provided with a question mark. However, it is planned that the increase in the taxable portion will be slower, so that from 2024 new pensioners would only have to pay tax on 83 percent, while new pensioners from 2023 onwards would only have to pay retroactively to 82.5 percent. This means that the tax burden will only increase in 0.5 percent increments. This means that the full 2058 percent of pension payments would not be taxable until 100. The following table shows how this would affect the vintages in concrete terms:

In view of the budget crisis in the federal government, however, it is not clear whether the law will be passed in this way or not.

Contribution ceiling and minimum contributions for voluntarily insured persons

Also new from 2024 are some values that are important for insured persons who do not yet receive a pension. For example, the minimum monthly contribution for voluntarily insured persons (e.g. self-employed) will increase from 96.72 euros to 100.07 euros. The maximum amount increases from 1,357.80 euros to 1,404.30 euros per month.

The German Pension Insurance provides information about the changes in 2024. © Daniel Karmann/dpa/dpa-tmn

The contribution assessment ceiling will also increase from 1 January. This refers to the limit up to which the salary is calculated for the purpose of calculating the monthly contribution. If you earn more than this limit per month, you do not have to pay pension contributions on it. In 2024, the contribution assessment ceiling will rise from 7,300 euros per month to 7,550 euros per month in the old federal states and from 7,100 euros per month to 7,450 euros in the new federal states. 2024 is the last year in which different limits still apply to western and eastern Germany.

In concrete terms, this means that the maximum possible contribution that an employee can pay into the pension fund will increase from 1357.80 euros to 1404.30 euros in the west and from 1320.60 euros in the west to 1385.70 euros in the east. As a rule, half of the contributions are divided between the employee and the employer.

Source: merkur

All news articles on 2023-12-04

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