Britta Beate beautiful is responsible for all legal topics with Finanztip. The doctor of law and attorney was active as a leader of the legal department with financial service providers such as Telis Finanz AG and Interhyp. Previously, she taught and researched in Japan as a DAAD Junior Professor of German and European Law. She studied in Munster, Geneva, Regensburg and Leipzig. You can reach the author under [email protected]
- Once you have reached the statutory retirement age, you can earn as much as you want without having your pension reduced.
- If, on the other hand, you retire early, you will have to exceed the limit of 6.300 euros of additional income per year. Otherwise your pension will be reduced.
- Significantly higher limits apply for the years 2021 and 2022 due to the Corona pandemic. As an early retiree you may work up to 46.Earning an extra 060 euros ─ without reducing your early retirement pension.
- A well-paid part-time job can be particularly worthwhile for early retirees because of the Corona pandemic. The additional income will only be paid from 46.060 euros will be deducted from your pension in 2022.
- As an early retiree you have to report your side job to the pension insurance.
In this guide
Maybe you retired without really retiring. Some say to themselves: a rolling stone gathers no moss. For others, life without work is too boring. You may be dependent on topping up your statutory pension. In the Corona pandemic early retirees can earn much more without having their pension reduced.
Who is allowed to earn unlimited additional income?
Only those who have reached the so-called standard age limit are entitled to the statutory pension of unlimited additional earnings. The standard age limit is defined in the German Social Code VI and is set at the age of 67. After reaching the age of 65 reached (§ 35 sentence 2 SGB VI). The standard age limit will be gradually raised to this age by 2031. The new age limit will only apply to those born in 1964.
The current limit is Standard retirement age in the pension-ver-si-che-rung 65 years and ten months for the persons born in the calendar year 1956. If you were born in January 1956, you will celebrate your 65th birthday in January 2021. Birthday and reached on 1. December 2021 is the standard retirement age.
Things get a bit more complicated if you already have before the standard retirement age you have retired. Then you are subject to an additional earnings limit and you have to pay your pension to the pension insurance company declare side job.
By the way: You don’t have to deduct any of your salary from your part-time job Unemployment insurance contributions tax (currently 1.2 percent). From 1. January 2022 employers of old-age pensioners must again pay the employer’s contribution to unemployment insurance of 1.2 percent.
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What is the outgoing earnings limit in the Corona pandemic??
As in the years 2020 and 2021, early retirees may also 2022 earn significantly more. The outgoing earnings limit for early retirees has been reduced from 6 to 10.300 Euro on 46.060 euros raised (§ 302 para. 8 SGB VI, § 34 SGB VI). It doesn’t matter in which industry you do your part-time job. The increase applies to everyone with an early retirement pension.
So you can earn up to 46.060 euros a year in addition to your pension, without being reduced. Regardless of whether you are self-employed or employed.
As Additional earnings applies to the monthly gross pay, if you are employed. If you work Self-employed, your additional earnings are the monthly taxable profit. In the language of your tax advisor, this is income from business, from self-employment or from agriculture and forestry. Comparable income, such as early retirement pay, is also additional income.
What is the regular limit for early retirees??
This is the Basic rule on additional earnings in periods without a pandemic: If you retire early and receive a pension, you must meet the additional earnings limit of 6.300 Euro per year note. This applies, for example, to those who retire after 35 or 45 years but have not yet reached the standard retirement age.
Earnings up to this amount are not counted toward the pension, so they do not result in a reduction. This means you would continue to receive your full pension. The limit applies uniformly in all federal states (§ 34 para. 3 no. 1 SGB VI).
How much will the pension be reduced in case of higher income??
If you earn more than the limits allow, you will only get paid a partial pension. Above a certain level of earnings, the statutory pension can even be cancelled altogether: Everything that exceeds the limit of 6.300 Euro is exceeded (in non-pandemic times) flat rate at 40 percent will be deducted from the pension. The monthly pension is reduced by this amount.
Example: A pensioner receives a monthly pension of 950 euros, in addition she earns 1.510 euros. Of the annual 18.120 Euro it can be 6.300 euros without reduction, leaving 11 euros.820 euros per year, 985 euros per month. Of this, 40 percent, i.e. 394 euros per month, is deducted from the statutory pension, so the pensioner receives only 556 euros pension because of her additional earnings.
Example calculation with regular towards-earnings-limit:
|18.120 euros per year (1.510 Euro per month)|
|6.300 Euro per year 1|
|(18.120 – 6.300) = 11.820 Euro per year, equivalent to 985 Euro per month|
|(985 x 0,4) = 394 Euro|
|(950 – 394) = 556 euros per month|
|556 euros per month|
1 The out-of-pocket limit will be raised to 46 euros in 2021 and 2022.060 Euro raised.
Source: Deutsche Ren-ten-ver-si-che-rung (as of December 2021)
If your income from the part-time job together with the reduced pension exceeds the highest income you have had in the past 15 years, then the following applies Supplementary income cap. The earnings above the previous income are completely credited to the pension.
In the case of additional earnings, the pension insurance company always pays the pension according to a Forecast for the year from. If all income certificates are available, the pension insurance will either pay the pension again, if it has estimated too cautiously. If, on the other hand, the pensioner has earned more than estimated and therefore received too much pension, he must pay back the excess.
Alternatively, pensioners can also determine yourself, how high their partial pension should be – they are then allowed to earn additional income accordingly.
The pension-ver-si-che-rung helps you with questions around a possible additional income. Use for it best the advisory boards of the German pension-ver-si-che-rung.
The additional earnings thresholds also apply to the full minimum income pension. If you are only partially incapacitated for work, you have to have your pension limit calculated individually. The pension-ver-si-che-rung also helps with this.
How does a part-time job increase your pension later??
If you retire early and earn money on the side, you pay on the additional income Contributions to the pension insurance scheme. This also increases your pension entitlement. However, mini-jobbers can be exempted from compulsory insurance. If you waive this exemption, you will have to pay 16.20 euros in pension contributions for a monthly salary of 450 euros per month. If you keep this up for a year, your monthly pension will later increase by about 5 euros (as of December 2021).
Pensioners who have retired at the standard age limit and work part-time do not have to pay contributions to the pension insurance scheme. However, you can continue to pay into the pension insurance system with a voluntary insurance and even more pension points collect.
Nicolas Heronymus is currently working his way through all the editorial stations as a volunteer. Even before Finanztip, he gained his first experience in the world of finance and insurance: during a gap year at Allianz and as a working student at Generali. He studied political science in Luneburg, Berlin and Rome.