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Retire earlier: 4 legal tricks how to do it
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Retiring at 57 or 60 sounds tempting, especially since the future retirement age for any worker is 67. But there are conditions under which you can retire earlier. Often, however, the insured must expect discounts. This depends on the year of birth. Depending on the situation, a different standard age limit then applies than the legally stipulated 67 years. If you want to retire earlier without deductions, you can do this in various ways. We explain what you have to consider ...
➠ Content: This is what awaits you
➠ Content: This is what awaits you
How can you retire earlier?
Going to work until the age of 67 is not an attractive prospect for many employees. Instead, they want to enjoy their retirement and have more time for family, friends and hobbies. In principle, the regular retirement age applies (which varies depending on the year of birth), but those who have enough contribution years can also retire earlier. What does that mean in concrete terms?
Retire earlier without any deductions
Especially long-term insured persons who have paid in for 45 years can retire earlier without any deductions. What that means in concrete terms depends on the year of birth: some can retire at 63, others only at 65.
Retire earlier at a discount
Long-term insured persons are those who have paid in for 35 years. You can also retire earlier at the age of 63, but have to accept a 0.3 percent discount per month. The pension is reduced by a maximum of 14.4 percent, which corresponds to the equivalent of four years. This means that you cannot retire more than four years earlier, even with a deduction.
What are the effects of the standard retirement age?
The so-called regular retirement age determines when someone retires and receives the full old-age pension. For all those born in 1947 or later, the standard retirement age increases gradually by one month and then by two months to 67 years. This retirement age applies for the first time to insured persons born in 1964 or later. Your regular old-age pension will be due in 2031. This means that those who want to retire earlier must either have completed the 45 contribution years or accept deductions. However, the increase in the retirement age also affects early retirement: Instead of 63 years old, it is now only possible at 65 years of age.
The table below shows which age group can retire at what age without deductions. For example, if you were born in 1952, you only need to work until the age of 65 years and six months to be able to retire without deduction. If you wanted to retire at the age of 65 - eight months earlier - you would have to accept a deduction of 2.4 percent (8 x 0.3 percent per month) from your pension. This applies to the entire lifetime.
Year of birth ➠ retirement age (years + months)
1946 ➠ 65 + 0
1947 ➠ 65 + 1
1948 ➠ 65 + 2
1949 ➠ 65 + 3
1950 ➠ 65 + 4
1951 ➠ 65 + 5
1952 ➠ 65 + 6
1953 ➠ 65 + 7
1954 ➠ 65 + 8
1955 ➠ 65 + 9
1956 ➠ 65 + 10
1957 ➠ 65 + 11
1958 ➠ 65 + 12
1959 ➠ 66 + 2
1960 ➠ 66 + 4
1961 ➠ 66 + 6
1962 ➠ 66 + 8
1963 ➠ 66 + 10
1964 ➠ 67 + 0
How can I retire at 57?
For long-term insured persons, the old-age pension determines a waiting period of 35 years. The pension system does not actually provide for retirement at the age of 57 - depending on the year of birth, that would be eight or ten years ahead of time. Since early retirement is also possible a maximum of four years earlier, you would have to financially bridge the years up to the official retirement age yourself. In addition, there is another point: You will not only have your pension reduced by 0.3 percent per month. By quitting work earlier, you pay less overall into the pension fund. In this way, you also collect fewer earnings points than possible.
You do not only collect pension points through working hours. Even if you raised children or cared for relatives, this will be taken into account in the pension. One pay point currently corresponds to 34.19 euros in the west (33.23 euros in the east) per year. For example, those who want to retire four years earlier not only have 14.4 percent pension deductions, but also receive 136.76 euros (or 132.92 euros) less. So whether you (can) retire at the age of 57, 60 or 61 essentially depends on two criteria: Do you meet the formal and personal requirements?
Further requirements for earlier retirement
Of course, the legislature has also recognized that not all people - regardless of their age group - can work equally long. People get sick or have a disability, in other cases the work is unreasonable even in old age. However, a distinction must be made between the terms:
Retire earlier due to illness
Those who are permanently on sick leave cannot work. If the prognosis looks bad, some wonder whether they should retire earlier. Strictly speaking, a distinction must be made between two things: An official early pension still means that the insured person has paid contributions for at least 35 years. Incidentally, this also applies to employees with severe disabilities.
If, on the other hand, it is not possible to work several hours a day due to a disability or illness, you will receive the so-called disability pension for the time until you actually retire. Employees who have completed a waiting period of five years can receive support here. A distinction must be made between a pension due to full disability or partial disability. In the first case, the employee cannot work at all or a maximum of three hours a day, in the second a maximum of six.
Retire earlier if you work in the mining industry
Insured persons who are employed underground can also retire earlier before the age of 67. However, here too the age limit will be gradually raised from 60 to 62 years of age. All those born after December 31, 1951 are affected. Those born in 1964 and later will be able to retire at the age of 62.
4 legal tricks: how to retire earlier
1. Retire earlier with deductions
Those born in 1955 will retire this year at 65 years and nine months. Assuming that someone would like to retire two years earlier, for example, they can stop working at the age of 63 and accept the 3.6 percent deductions per year if they have completed 35 years of contributions. Without deductions, the person would have to have 45 years of contribution.
2. Retire earlier by making a deposit
Another option is to offset the deductions by voluntarily paying into the pension fund. However, only the monthly 0.3 percent discounts can be offset in this way. You have to accept the deductions that come from working less. You can find out how much more you would have to increase your pension insurance contributions and whether it is worthwhile in a consultation with Deutsche Rentenversicherung.
3. Retire earlier with the flexible pension
If you want to retire earlier, but are financially tight, the Flexirentengesetz could be helpful. This regulates the additional earning opportunities at retirement. However, the standard retirement age is also decisive here. Those who have not yet achieved it may not earn an unlimited amount of money. Both long-term insured persons, especially long-term insured persons and severely disabled people have to report their job to the pension insurance agency. Up to 6,300 euros per year remain free of credit. If the earnings are higher, there are deductions from the pension. The practical thing about the flexible pension: You can also work beyond the regular retirement age. On the one hand, this enables you to draw a pension and, at the same time, you pay into the pension fund.
4. Retire earlier with a lifetime working time account
If you have a lifetime working time account in your professional life, you can use it to bring your retirement forward. Money and other "currencies" are paid into this account during employment, for example:
- Salary components
- Overtime (or its remuneration)
- Performance bonuses
- Vacation pay
- Christmas bonus
- Employer grants
The "pension credit" saved in this way can be paid out as free time before you actually retire. The advantage: You are officially still employed, which means that you also have to pay social security contributions. In addition, you do not have to take the time you have saved: if you still want to continue working, you can have the credit paid out.
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