Status: 16.01.2024, 15:38 PM
By: Fabian Hartmann
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The class of 1964, the one with the highest number of births in Germany, turns 60 this year. The number of applications for early retirement is already rising significantly.
Berlin/Wuppertal – During the economic miracle, the number of births in the Federal Republic of Germany reached a record high in 1964. With 1.36 million births, the number of newborns reached an unsurpassed peak to this day. In contrast, the decline in births continues in 2023, after the number had already fallen by 7.1 percent to 738,819 in the previous year.
People born in 1964 will be 60 years old this year, which means that retirement is getting closer. Many of them are now considering whether early retirement is possible and how this can be financed.
Retirees: Baby boomers retire as early as possible. © Michael Gstettenbauer/Imago
Early retirement popular with baby boomers
The number of baby boomers considering early retirement has been quite high for years. According to a representative survey conducted by occupational scientists at the University of Wuppertal, only a minority of the approximately 9000,<> employed baby boomers surveyed can imagine working until the standard retirement age.
Since 2011, the University of Wuppertal has been collecting statistics on the retirement of baby boomers as part of the lidA study. In the fourth wave of the survey last year, employees born in 1971 were added.
Main reason for early retirement: More free time
According to the study, only 22 percent of employees born in 1959 can currently imagine working until the standard retirement age of 66. In those born in 1965, only nine percent want to work until the standard retirement age of 67, and in those born in 1971 with the same standard retirement age, the figure is 12 percent.
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The desire for more free time is the main reason for early retirement, at 83 percent, according to the survey. It is striking that the desire for more free time is a constant motivation for early retirement for both men and women and in all occupational groups.
Pension losses in the event of early retirement
While there is no legal obligation to work until the standard retirement age, those who choose to retire earlier will have to accept potential pension losses. In the event of early retirement, employees in a so-called old-age pension for long-term insured persons have to cope with a pension deduction of 0.3 percent per month - for each month that the pension begins before reaching the regular retirement age. The maximum deductions amount to 14.4 percent.
Another option for early retirement is the so-called old-age pension for those who have been insured for a particularly long time. It is free of deductions and can be applied for if the minimum insurance period of 45 years has been met. However, the retirement age of 63 without deductions no longer applies to insured persons born in 1953 or later. For them, the possible retirement age for this old-age pension will gradually increase from 63 to 65 years.
Budget debate: Cuts in pension subsidy
Last year, the number of applications for a deduction-free pension after 45 years of work reached a record level. At the end of September 2023, there were already a good 245,000 applications for a deduction-free pension from the age of 63 – about 17 percent more than at the same time last year. This was reported by the Bild newspaper, citing the German Pension Insurance. Critics are calling for the abolition of the deduction-free pension from the age of 63 due to supposedly high costs. The debate was further fuelled by the budget freeze.
As part of the Federal Government's current austerity package, the Federal Cabinet decided to reduce the federal subsidy for pension insurance by 2024 million euros for each of the years 2027 to 600. The pension insurance company criticized the Federal Government's approach in a statement and emphasized that the cuts would no longer comply with the Federal Government's share of financing. (Fabian Hartmann)