Retire later: it’s not over yet

At the age of almost 66 – at this age people born in 1957 currently receive regular statutory pensions; specifically: at the age of 65 and 11 months.

Retirement later has its advantages as well

But “at 66, it’s not over yet” – this is how pop star Udo Jürgens sang about retirement. Life is good even as a pensioner, that was his message: riding a motorcycle, playing guitar, traveling – “at 66 it’s fun” – rejoiced Jürgens. For Detlev Davids, this “not over yet” has a second meaning: he has been retired for over a year and still enjoys his job.

Davids is a photo editor at Stiftung Warentest. Realizing photo ideas with photographers and editorial colleagues, finding beautiful places for photo shoots, choosing the best photos, putting themes in the right photo are the main goals of his work. “I really like my job,” she says, “I don’t just want to stay at home.” Davids is one of many: 1.3 million people are employed at retirement age, according to the Federal Bureau of Statistics.

Three variants of work and retirement

People of retirement age have three job options:

  • Combine standard retirement and work, that is, get a full retirement pension plus salary.
  • For now, do not apply for the standard pension and continue to live on your salary.
  • Retire early and continue working at the same time.

The best: Full pension plus salary …

Monthly total income is highest with the first option. Anyone with a standard pension can earn an unlimited amount of money, your pension will not be reduced.

Detlev Davids, born in 1955, chose this path. He was allowed to retire at the age of 65 and 9 months. Its beginning depends on the date of birth. The age limit in this case increases gradually up to the age group 1964. People born at this time or later cannot normally retire until the age of 67.

… And continue to pay pension contributions

There are two variants of this type of pension – full pension plus salary. First: the end of pension contributions. This increases the net salary by 9.3%, which would otherwise go to the pension fund as an employee contribution. So here it is immediately more net than gross. For example, with an annual salary of 50,000 euros, or around 390 euros per month, or 4,650 euros per year.

The second option is more lucrative: 9.3 percent. Gross salary continues to be deducted from the pension scheme and therefore receives a higher pension. Our exemplary pensioner then pays € 4,650 a year into the pension fund. The net salary is reduced by this amount. At the same time, it creates an additional pension entitlement this year, amounting to approximately EUR 44 per month. After less than nine years, he regained this investment.

Postponing your retirement is not worth it

If, on the other hand, an employee delays his retirement, the calculation looks worse. It is true that your pension payment increases by 0.5 percent for each month you later voluntarily retire. So, if you start your retirement pension twelve months later than normal, you will get a 6% Pension Supplement. But it’s only worth it to people who are getting older.

If our sample pensioner with an annual income of EUR 50,000 now retires, he can count on a monthly pension of around EUR 1,640. If he delays the start of his pension for one year, his payout increases by 6 percent to 1,738 euros. So, in one year, he gave up almost 20,000 euros in his retirement pension, to later receive an additional 98 euros in retirement. This strategy will only work after 17 years of retirement: if the normal retirement age were 65 and eleven months, the pensioner would then be almost 83 years old.

Retire early, do not retire

Even those who retire early can still earn. This is often necessary in order to make ends meet. In any case, early retirees receive a lower pension than seniors who work until normal retirement age.

Before the krone pandemic, early retirement people could only earn an extra € 6,300 a year. If the earnings were higher, the pension payment was reduced. Now they can earn 46,060 euros – without a pension reduction. Why: First and foremost, former healthcare workers should be motivated to return to work due to the corona pandemic. This rule was then extended to all early retirees. Initially, it is valid until the end of 2022.

Detlev Davids is not an early retirement pensioner. I want to continue my work. He just turned 67 years old.

Leave a Comment