Early retirement: why earning additional income is more worthwhile than ever

Those who retire early can earn more than 46.earn an extra 000 euros – without a pension reduction. On the contrary, the pension actually increases as a result.

Early retirement: Why earning additional income is more worthwhile than ever. - Woman with additional earnings after early retirement

The high additional earnings limit opens up interesting options for pensioners between the ages of 61 and (almost) 66 – but also for employees at this age who have not yet considered applying for a pension.

I am 61 years old and receive a severely disabled pension of only 900 euros. I could get a half-time job with my ex-employer with gross earnings of 2000 euros. What does it bring me?

How will my gainful employment then affect my pension later on?

your employment is still subject to pension insurance. This means: You acquire additional pension points (Entgeltpunkte). With a gross salary of 2000 euros, you acquire – generously rounded – a good 0.6 earning points per year. These will be credited to you when you reach your regular retirement age.

Let’s assume you were born in 1960, then you would reach the regular age limit at 66 years and five months. From the following month, you benefit from your new pension points. This could be – if you continue working until then – 3 points. According to the current pension value, this would be a good 100 euros. But by then it will be much more, because the value of pension points increases every year. In 2022, for example, an increase of 4.4 percent is expected in the old federal states, in the new federal states it will probably be somewhat more.

Earning points: Important for your pension

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Those who diligently collect earning points will receive more pension in old age. But what are earning points and how do you get them??

Do I have to ask the pension insurance for permission if I want to go back to work as an (early) retiree?

You do not need permission. However, you must inform the pension insurance. This can be done informally by letter. Your letter should contain

  • your name and address
  • Your pension insurance number
  • the amount of your salary and the expected duration of the employment relationship.
Supplementary pension income – what applies to whom? Supplementary income Supplementary income limit (2022) Report supplementary income?
. before the regular retirement age until 46.060 Euro free of charge yes
. after reaching the regular retirement age unlimited no
. If you receive a full pension for reduced earning capacity up to 6300 Euro free of charge yes
. when receiving a partial reduction in earning capacity pension individual limit, but at least 15.989.40 euros free of charge yes

More advice on early retirement

I am 64 years old and am still in a permanent full job. Can I now receive a pension at the same time?? I meet the requirements for the retirement pension without deductions for those insured for a particularly long period of time.

To retire, you do not have to give up your employment relationship. If you meet the requirements for a retirement pension, you can receive it – regardless of whether you are still employed or not. All you have to do is apply for a pension.

You can then kill two birds with one stone, so to speak. By the employment relationship you acquire also still further pension claims, which are credited to you – as far as they apply now the old age pension for particularly long-time insured – after reaching the regular pension age.

I am 63 years old, still employed for an unlimited period, but could receive the old-age pension for long-term employees with a 10.8 percent pension deduction. Is the combination of job and pension worth it for me??

You have to weigh up the advantages and disadvantages. If you continue to work without a pension until your regular retirement age, you will waive your retirement pension during the period until your regular retirement age. You will reach the regular retirement age at exactly 66 years of age. So you will miss out on 36 months of pension if you do not apply for a pension. On the other hand, you avoid the pension deductions of 10.8 percent that will accrue until the end of your life.

In any case, you will have to live to a fairly old age if it is worthwhile for you to waive your pension claim.

I expect to earn 55 this year.000 euros. Do I have to expect a reduction in my early retirement pension??

Yes. But the reduction will be moderate. The limit for you is 46.060 euros gross. This means that you are 8940 euros above this limit. Divided over 12 months, that is 745 euros. 40 percent of this amount will be deducted from your retirement pension. That is 298 euros. Your gross pension – i.e. the pension before deduction of social security contributions – will be reduced by this amount. But this also means: You will not yet receive this part of your pension. Therefore, there will be no pension deductions later – after you have received your full pension.

Pension calculator

  • Estimate the amount of your statutory pension with the pension calculator.
  • You can use the pension inflation calculator to find out how much your pension will be worth later on.
  • Use the pension start calculator to find out when you can retire without deductions.
  • Calculate with the calculator voluntary pension insurance, how much a voluntary contribution to the statutory pension insurance brings your retirement pension or
  • Use the calculator for partial retirement to find out what your income would be during partial retirement.

I am 67 years old and continue to work in addition to my pension. Do I have to report my earnings to the pension insurance?

No. As soon as you have reached the regular age limit, this is no longer necessary.

But: You can increase your pension again by an employment subject to social security contributions. For this you have to give up the pension insurance exemption of your employment. This can be done simply by making a declaration to your employer. The latter will then pay the full contributions (i.e. 18.6 percent) to the German pension insurance fund on your behalf.

The consequence for you: Your pension will then increase from 1. July of the following year.

If you do not make a declaration to your employer, your employment will remain exempt from social insurance. In this case, the employer will only deduct his contribution share – i.e. 9.3 percent. However, these contributions will not be credited to you, but will flow into the general pension fund.

I am a pensioner for reduced earning capacity. Do the generous supplementary income regulations also apply to me??

No. If you receive a pension due to full reduction in earning capacity (EM), the annual upper limit of 6300 euros still applies to you. In addition, you then have a stricter duty to notify the pension insurance company. This is because the business basis of the pension may be called into question if you take up employment or work alongside your pension.

Tip: Use the expert forum

Do you have questions about pensions and additional earnings?? Use our expert forum! Here you can get answers from experienced experts of the regional institutions of the German Pension Insurance (DRV ) and the DRV Knappschaft-Bahn-See.

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