Simple calculation: If you retire earlier, you will be in retirement longer. Getty Images
The normal retirement age of 67 applies to all people born after 1964. But there are also ways to retire earlier.
Anyone who has collected at least 45 years of contributions to the statutory pension insurance can retire at the age of 65 without any deductions.
In order to be able to retire at the age of 63, you need at least 35 years of insurance. However, deductions of up to 14.4 percent will then be deducted from your monthly pension.
Whether it’s a trip around the world, grandchildren or renovating your home – when you retire, you finally have more time for the beautiful things in life. But not everyone wants or can wait until the statutory retirement age of 67 to retire. Surveys also show that the trend in Germany is towards early retirement despite the labor shortage. However, anyone who is thinking about “retiring at 63” should do thorough research before applying. Ultimately, early retirement can result in significant discounts.
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Retirement age: When can I retire?
For how much longer? Employees probably ask themselves this question more and more towards the end of their working lives. However, the answer is not the same for everyone. According to information from the platform “Your precautionThe “pension at 67” was decided in 2007. As part of this reform, the retirement age is to be increased gradually in a transition phase from 2012 to 2031. When a person can retire without deductions depends on their year of birth. The age limit of 67 only applies from those born in 1964 – but with one exception.
Anyone who has previously paid into the statutory pension insurance for at least 45 years is considered a “particularly long-term insured person”. In this case, you can retire at the age of 65 without any deductions – i.e. without any financial losses. However, this is hardly an option for insured people who did not start working at a young age. According to the German pension insurance, for example, times in which you did not pay into the pension insurance due to illness, pregnancy or unemployment are not taken into account. Study and training periods also do not count if you have not paid into the pension insurance during this time.
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Important: Pensions are a very complex topic. Decisions regarding your own pension can have far-reaching financial consequences. For this reason you should definitely follow the German pension insurance or contact another advice center before applying for early retirement.
What “early retirement” means – and how you get it
Even though the terms “early retirement” and “pension at 63” are on everyone’s lips, they are not considered official pension models. These are actually colloquial descriptions for two different types of old-age pensions that can be paid out before the statutory retirement age. In addition to the pension without deductions after 45 years of contributions for “particularly long-term insured people”, there is also the “old-age pension for long-term insured people”. This type of pension can only be claimed from the age of 63 at the earliest. The German pension insurance explains this on its website, where both types of pensions applied for online can be. Although the “old-age pension for long-term insured persons” begins to be paid out earlier, deductions are due on the entire pension. The more time until regular retirement age, the higher the deductions. 0.3 percent will be deducted from the pension per month up to the statutory entry date, up to a maximum of 14.4 percent.
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Even with the so-called “pension at 63” you have to have a certain number of years of contributions. It amounts to at least 35 insurance years. According to the German pension insurance In contrast to the pension after 45 years of contributions, all periods in which you were insured in the statutory pension insurance are added together. These include, for example:
Employment and self-employment Receipt of unemployment benefit I Voluntary insurance Periods for raising children Non-profit-making home care Compensation for pensions in the event of a divorce Mini-job without exemption from pension insurance obligations Pension splitting Credit periods, for example pregnancy or study
Old-age pension for severely disabled people: People with a disability of at least 50 percent can also retire earlier. The earliest possible retirement age in this case is 62 years. Here too, deductions are deducted from the pension, which can amount to a maximum of 10.8 percent. However, anyone who waits until 65 despite being severely disabled can retire without any deductions. Requirement in both cases: You were previously in the statutory pension insurance for at least 35 years.
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Pension at 63 – that’s how high the deductions are
Whether and when early retirement makes sense obviously depends on your individual financial situation. If you have also taken out a private pension plan or have access to other retirement savings, deductions are usually easier to cope with. In any case, before applying, you should calculate whether the pension will cover your expenses in old age despite the deductions.
Interest rate thresholdsDiscount (percent)Gross pension after reduction6314,4128463,512,613116410,8133864,59,01365657,2139265,55,41419663,6144666,51,81473Example calculation for a gross pension of 1500 euros.
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By the way, retirement – whether at 63 or 67 – does not oblige you to just look after grandchildren and feed ducks. While retirement used to usually mark a new, clearly defined phase of life, today more and more people prefer a gentle transition into retirement. Given the shortage of skilled workers, employers also benefit from so-called silver workers. Depending on your retirement plans and health condition, it may be advisable to combine early retirement and a job in order to close any income gaps. Even with high salaries, this does not reduce the pension, as there has been no additional earnings limit since 2023.