Retirement Income – Save Tax & Collect Full Pension: This is how early retirees work smarter


Retirement income: Save taxes and collect full pension: This is how early retirees work smarter

An increasing number of employees who retire before normal retirement age are making voluntary contributions. In this way they avoid a low pension. How it works and how much amount to pay.

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Number of people making voluntary contributions for later compensation pension deduction In 2020, the number rose to around 35,000. This is shown by current data from the German pension insurance. In 2017, only 11,600 insured persons made use of this option; in 2019, the figure was 25,800.

Pension: Co-payment regulations apply

The possibility was created with a flexible pension law from 2016 50th year of life Set off all or part of the deduction with a special payment. If you want to retire before you reach the statutory retirement age, you usually have to accept the first 0.3 percent deduction every month. So if you retire a year earlier, you lose 3.6 percent of your actual pension. and for life.

Another possibility of the law is the additional income for pensioners with early retirement of up to 6300 euros per year. As a spokesman for the pension insurance explained, as a result of the corona pandemic, there is even the possibility of earning up to the maximum additional income this year. 46,060 euros.

This liberal system will be permanent. The traffic light parties have stipulated this in their alliance agreement. The large Federal Ministry of Labor informed Focus Online on request whether necessary steps would be taken in 2022.

Exciting, but just no time?

The payment in the pension insurance in 2022 is particularly meaningful

In addition, the pension can be increased through voluntary contributions. The law also made it easier to work beyond the standard retirement age or to work alongside the standard old-age pension.

Anyone who, as a future early retiree, thinks of offsetting their pension deduction with co-payments will reject a particularly favorable one in 2022. 2022 costs a so-called remuneration point (EP, often also called “pension point”). 7235.59 eurosHe brings in a monthly pension of 36.02 euros (value as of July 1, 2022). In 2021, the “price” of the pension point was still 7726.63 euros – around 491 euros more. The reason for the cost reduction in the current year is the decline in average wages as a result of the Corona crisis. The calculation is based on them.

This is how the amount of compensation is calculated

Recognition: 40 Earning Points (EP) are required for a retirement pension. However, the insured wants to retire two years earlier. So he has to accept a discount of 24 months x 0.3 percent = 7.2 percent. His access factor (AF) is thus 100-7.2 = 92.8 percent = 0.928.

The average salary of all pensioners in 2022 is EUR 38,091 (EUR 3174.25 per month). This value is the decisive factor for calculating the required amount of compensation.

calculation plan

  1. Step: Determination of missing payment points (EP)
  2. Step: Access Factor (ZF) Calculation
  3. Step: Calculation of missing income for median income with pension access factor (ZF)
  4. Step: Personal Income Loss = Step 3 x Missing Pay Points
  5. Step: Back payment amount = lost income multiplied by the current contribution rate of 18.6% of income

Invoice (see “Approval” with values):

Additional payments are amortized after 18 years – but sooner thanks to pension increases

The calculation shows: The early retiree has to pay 22,455 euros to the pension fund to compensate for 2.88 EP. his co-payment earns him monthly 103.74 euros more pension. This value corresponds to EP 2.88 in the old federal states. However, the co-payment only takes effect from the point at which his regular old-age pension begins – so the money is not used for early retirement!

Roughly speaking, 22,455 euros for early retirement after 216.45 months – that is Beautiful 18 years. As I said: The time only runs out when the early retiree has reached his regular retirement age. The age of those born in 1956 is 65 years and ten months.

In fact, the limit until the co-payment makes sense is less than 18 years – because future pension increases will also lead to more pensions for additional earnings points. This plus may be remarkable: between July 1, 2012 and July 1, 2022, the value of an EP rose from 28.07 to 36.02 euros – i.e. by more than a quarter. If this growth continues in the future, an early retiree with his overpayment reaches the point at which the investment pays off for the first time.

In addition, the Ministry of Finance encourages additional payments by making them tax-free. This leads to lower tax payments. However, the quantity is limited. In order to get the maximum tax advantage, interested parties can spread the co-payment over five years. Early retirees can offset the tax savings against their co-payments.

Salary: Gross-Net Calculator 2022 . go to

Everything you need to know about your pension

The 135-page FOCUS online guide answers all the important questions about old-age provision. As well as 65-page forms.

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