Retiring at 63: new rules

The pension deficit is significant.  With the level of pensions currently at 48%, retirees have to make do with a little less than half of their previous income.  (symbolic photo)

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Of: Wolfgang DePonte

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The additional income cap for pensioners will no longer apply from 2023. This should create space for a new strategy when planning for retirement.

Munich – Working and receiving a pension at the same time without being reduced due to the additional income: Many employees at the age of 63 were able to do this for two years thanks to the special Corona rules. But from next year even more generous regulations will apply – permanently. Because the additional income ceiling for early retirement pensions no longer applies. the tz explains the details.

With the abolition, the federal government wants to make the transition from work to retirement more flexible in the event of early retirement. In practice, this creates space for a new strategy: those who apply for their old-age pension early can in many cases plan with a double income in the future: pension plus income from work.

New rules for retirement at 63: These rules applied until now

The Pensions Act currently states that pre-retirees who earn more than €6,300 gross in a calendar year should expect their pension to be reduced. Due to Corona, this limit has been increased to 46,060 euros. This special agreement was to expire at the end of the year. But contrary to what was initially planned, the ceiling on additional income for pre-retirees is even now completely removed. However, the requirements continue to apply: 35 years of contributions (credited periods included), minimum age 63 years.

There are new rules for pensions from the age of 63. (symbolic photo) © Westend61/Imago

New rules for retiring at 63: how to modulate your retirement planning?

If health and the employer play the game, you can count on a double income for a few years. This can be useful, for example, to pay off the last debts related to home ownership or if you want to realize your dream of a mobile home or a trip.

New rules for retirement at 63: will pension rights increase in 2023?

Since the job is still subject to pension insurance, you earn more pension points. With a gross salary of 2,000 euros, that’s a good 0.6 salary points per year. In four years, this would represent a monthly pension increase of around 100 euros.

New rules for retirement at 63: what do you have to consider from a tax point of view?

The combination of pension and earnings from work may lead to additional taxes, since most of the pension is taxable. Another important point: payroll tax and social security contributions are always deducted from the salary, and contributions to health and nursing care insurance are deducted from the pension. Pension insurance does not levy taxes. You must submit a tax return for this. Due to the pension collected in addition, an additional tax payment is due!

Calculation example:

Bernd K. earns 3000 euros gross per month, his monthly pension is 1500 euros (more information: supplementary health insurance contribution 1.3%, long-term care insurance with child, no church tax). Bernd K. finds himself with a net salary of 2,025.17 euros and a pension of 1,335 euros after deduction of health and dependency insurance. If you take this as a basis, he must count with an additional tax payment of 2000 euros. He should set aside around 165 euros per month for this.

New rules for retirement at 63: what to do?

Simply apply for a pension, you do not need permission from your employer. If the employer does not want to know anything about the pension, you have the option of requesting a partial pension (eg 90%).

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