Retire early: Financial implications and checklist for application

Early retirement: Financial implications and checklist for applicants

The standard retirement age for employees born in 1964 or later is 67. However, many employees would like to enjoy their retirement earlier. No wonder - regardless of whether it's physical work or office work: in today's working world, many people feel burnt out more quickly due to ever-increasing demands. The number of psychosomatic illnesses is rising steadily, and who gets a job after the age of 60? The job market is already difficult from the age of 50. So it's tempting to retire earlier - isn't it?

via Tanja Seiffert

09/04/2018, 11:32

Früher in Rente: Auf welche Einbußen Sie sich einstellen müssen — Retire early: What losses you need to be prepared for

Retire early - a dream! This is no problem for anyone born before 1953 who has been insured for at least 45 years: They can retire at the age of 63 without deductions. All others will have to reckon with losses.

Financial consequences

With the early retirement pension, the pension is 0.3 percent lower for each month of early claiming. Example: With a pension entitlement of 1,000 euros per month, someone who retires at 63 instead of 67 will see their pension reduced to 856 euros (48 months x 0.3 percent).

There are generally three ways to retire earlier

1. early retirement pension: This can be applied for by any employee from the age of 63 who has paid contributions into the pension fund for 35 years. However, the pension is then paid out with deductions.

2. reduced earning capacity pension: Anyone who can work less than six hours a day due to illness is entitled to a reduced earning capacity pension. The amount is determined individually.

3. severe disability: This form of early pension can be applied for by people who have a degree of disability of at least 50 percent and have worked for 35 years subject to social insurance contributions.

29 percent of Germans want to retire earlier, even if there is a risk of financial loss.

Checklist for applicants

The pension is not paid out automatically. It should be applied for three months before the desired start date
Seek advice in advance and calculate your entitlements.
Application forms are available from Deutsche Rentenversicherung.
Membership of the VdK social association can be worthwhile: you can get legal advice and support there.
If your application is rejected, you can lodge an objection within one month. If this is also rejected, you can file an appeal with the social court.

When should you apply for early retirement?

If you are interested in early retirement, you should start thinking about it from your 50th birthday, so that you have enough time to plan. German Pension Insurance offers free consultations and can also help you fill out the application forms. Appointments can be made either online or by telephone on 08 00/10 00 48 00.