As of: February 10, 2024, 5:26 a.m
By: Caspar Ibel
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More and more Germans are opting for the so-called pension at 63. But who is eligible and under what conditions?
An overview of the current regulations.
Berlin – Demographic change poses challenges for financing pensions - this also applies to the so-called “pension at 63”.
Because: Due to the aging population, an increasing number of pensioners are faced with fewer and fewer contributors.
That's why politicians have been looking for solutions for a long time to fill the pension fund sustainably.
The economist Veronika Grimm recently suggested linking the retirement age to increasing life expectancy and thus increasing it.
However, Chancellor Olaf Scholz rejected this request.
The retirement age has been set by law at 67.
“After that, I think it’s good,” said Scholz.
When can I retire?
While calls for a higher retirement age continue to grow, many employees are wondering when they can actually retire.
The answer depends on various factors.
Firstly, your year of birth.
If you were born in 1946 or earlier, the standard retirement age is 65.
However, for those born after 1946, the limit was adjusted by one month per year.
For those born in 1956, the age limit is 65 + 10 months.
From those born in 1964, the new standard age limit of 67 is reached.
You can find out exactly when you will retire using the German Pension Insurance online calculator.
Pension at 63
Another factor is the number of contribution years.
This is where retirement at 63 comes into play, also known as early retirement.
This is primarily about the number of so-called “creditable times”, i.e. contribution years.
If you have at least 35 years of contributions and are 63 years old, you will be eligible for a pension at 63.
There are two different variants.
The old-age pension for long-term and particularly long-term insured people.
With the latter, pensioners do not have to accept any deductions, but with the former they do.
The decisive factor as to which type of pension you are eligible for is the number of years of contributions.
Old-age pension for those insured for many years: early pension with deduction
If you have 35 years of eligible periods in the pension insurance and are 63 years old, you can claim the old-age pension for long-term insured persons.
However, there are discounts on the payouts of up to 12.6 percent, as 0.3 percent is permanently deducted from your pension for every month that you retire early.
Since the standard age limit is gradually increasing to 67, the number of early months, i.e. the deductions, is also increasing.
However, from the age of 50 there is the possibility of a voluntary compensation payment before retirement.
These payments or advance payments reduce the deduction, but cannot completely offset it.
In 2022, almost 19,000 people in Germany opted for an old-age pension for those who have been insured for a long time.
Early retirement with deduction - what is taken into account?
Contributions from employment or self-employment.
Under certain conditions, months in which you received sickness benefit, unemployment benefit, unemployment benefit II or transitional benefit in the period from January 2005 to December 2010 also count.
Voluntary contributions paid by you alone.
Child-rearing periods for the first 2.5 or 3 years of life.
Months of non-commercial home care.
Months from a pension settlement in the event of a divorce.
Contributions for mini-jobs that you paid together with your employer.
Contributions for mini-jobs that your employer paid alone are only taken into account proportionately.
Months from pension splitting between spouses or registered life partners.
Replacement times: for example, months of political persecution in the GDR.
Credit periods: Times in which you cannot pay pension insurance contributions for personal reasons, for example due to illness, pregnancy, unemployment, school training and studies.
Times taken into account: for example, times when raising a child who is not yet 10 years old.
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The pension at 63 without deductions
The even more popular option is the pension at 63 without deductions.
Around 262,000 pensioners opted for this model in 2022.
Since there is no deduction, other requirements naturally apply.
Pensioners need a whopping 45 years of contributions and should familiarize themselves with the credits, as these are handled more strictly than with early retirement with a deduction.
For example, when crediting an apprenticeship or course of study.
A detailed list of considerations is provided below.
Depending on the year of birth, this pension can no longer be applied for at the age of 63.
In line with the increase in the standard retirement age, the age limit will be gradually raised to 65 by 2029.
The term “pension at 63” no longer really applies to this variant.
In 2024, the age limit for those born in 1960 will be raised to 64 years and 4 months.
The limit also increases for the following years.
Pension without deduction - what is taken into account?
Mandatory contributions for employment or self-employment.
Contributions for mini-jobs that you paid together with your employer.
Contributions for mini-jobs that your employer paid alone are only taken into account proportionately.
Mandatory contributions and consideration periods for raising a child up to their 10th birthday.
Periods of non-commercial care, compulsory military and community service.
Mandatory contributions or credit periods due to the receipt of social benefits (e.g. sick pay).
Social benefits from the employment agency in the last two years before the start of retirement are only taken into account if the benefit was paid due to the employer's insolvency or complete cessation of business.
Replacement times: for example, months of political persecution in the GDR.
Voluntary contributions are only counted if there are at least 18 years of compulsory contributions.
What is not taken into account?
Compulsory contributions that were paid because of receipt of unemployment benefit II or unemployment assistance.
Periods from a pension adjustment after divorce.
Times resulting from pension splitting between spouses or registered life partners.
Credit periods: Times in which you cannot pay pension insurance contributions for personal reasons, for example due to illness, pregnancy, unemployment, school training and studies.
Apply for a pension at 63
In order to be able to claim the pension at the age of 63, an application must be submitted to the German pension insurance.
This recommends submitting the application around three months before the start of your pension.
Then you should receive the pension benefit on time at the start of your pension.
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