Many would like to retire earlier. But that costs money. Because for early retirement you have to accept a deduction of 0.3 percent every month. Special payments into the pension fund can compensate for this. And they are particularly cheap this year.
Anyone wishing to claim an old-age pension for long-term insured persons or an old-age pension for severely disabled people before reaching the regular retirement age must accept a deduction of 0.3 percent for each month of early retirement.
Insured persons over the age of 50 and who have at least 35 years of insurance in the pension insurance system by the time they plan to retire – including childcare and school times – can be fully or partially compensated for by special payments to the pension fund. Information about the amount of the payments is provided on request by the responsible pension insurance institution, as informed by the German pension insurance. The information contains the following information:
The pension insurance emphasizes that a reimbursement or repayment of these special contributions is not possible. If insured persons subsequently claim an old-age pension that results in a lower or no pension reduction, the special payments cannot be reimbursed. In return, they receive a higher pension through the special payments made.
In addition, the pension points are still cheap this year. Because in the coming year, the price for a pension point will increase by around eleven percent, so the special payment will be correspondingly more expensive.
Example of pension insurance: The insured Michael K. wants to retire two years before the standard retirement age that applies to him. With a pension of 1000 euros (gross), his monthly pension would be reduced by 7.2 percent or 72 euros. Additional contributions to the pension insurance to fully compensate for the deduction would currently cost around 16,400 euros in the old federal states and around 16,100 euros in the new federal states.
Special payments are generally possible both as a one-time payment and as partial payments. Such partial payments are not only easier to shoulder, but also make tax sense. Because the contributions can be fully or at least partially deducted from tax every year as part of the pension expenses. Payment can also be used to maintain insurance cover for a pension due to partial or full disability. Earning points that are missing due to the shortened working time cannot be compensated for. If a bank transfer is made within three months of the information being provided, the more favorable conditions applicable when the application was submitted continue to apply. The application and the information provided do not automatically oblige you to pay.
The pension insurance provides information on the subject here or gives information on the free number 0800 1000 4800.
(This article was first published on Monday, October 24, 2022.)
