Instead of working until the standard retirement age, a large part of the employees retire prematurely and even accept discounts on retirement benefits. The motives for this are manifold. Some early retirees want to devote themselves to their grandchildren or hobbies, others have health problems or just enough of their professional life. But who wants to take the step of early retirement, must be aware that the sometimes significant deductions on the pension not only until reaching the regular retirement age. T he covers are reduced permanently. The ZDF WISO tip on “Early retirement” shows what working people need to know before they apply for the early pension.
Retired earlier or not? That should be noted
ZDF WISO is primarily concerned with the contribution to the premature retirement of the pensioner, for whom early retirement is an option and who should or should be able to survive until the normal retirement age has been reached. As a matter of principle, employees must have at least 35 or 45 years of insurance, including credits and credits, for the early retirement. In that case, early retirement is possible from the age of 63, whereby the age limit has been gradually increased to 65 years since 2012, parallel to the increase in the standard retirement age. Retirees with at least 35 years of insurance have to accept a 0.3% discount on their pension per month they retire prematurely. The early retirement with 45 years of insurance, on the other hand, is free of charge.
Tip: You can compensate for discounts and lower pension insurance contributions with a private pension plan, even if there are only a few years left before retirement. Request a non-binding pension plan and inquire about your options.
Think carefully about early retirement
The premature retirement benefits add up to 18 percent for five years of old-age pensions during the entire pension period. In addition, early retirees have paid less pension insurance contributions into the pension fund. It is therefore recommended before the pension application, a precise review of the financial situation.
- Is it permanently possible to live well from the expected pension?
- Are there enough reserves for unexpected and larger expenses?
- Is there income from company or private pension plans that will increase the statutory pension?
- Does the employer alternatively offer partial retirement to offset the loss of income?
Early retirement and just keep working – so far a problem
Employees who want to offset premature retirement discounts by simply continuing to work part-time for a while have had rather poor cards so far. For early retirees must comply with very strict additional earnings limits. If the income exceeds these limits, the pension is reduced. As a rule, the discounts can not be completely compensated for by this. However, with the Flexirente soon come flexible additional income limits. The corresponding law has already been launched by the government.