Many changes are in store for German retirees in the near future. As always, the new year brings some innovations.
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German pension insurance is also making certain adjustments. The changes will particularly affect age limits, additional earnings limits, and pension taxation.
Here's what will change for German retirees next year
Starting in 2024, the regular retirement age will be increased to 66 years.
This rule applies to individuals born in 1958. For younger generations, the entry age continues to rise with two-month intervals. The normal age limit of 67 will be reached by 2031.
The age limit for receiving the "pension at 63", which applies to those who have been insured for an exceptionally long time, will be increased to 64 years and 4 months for individuals born in 1960.
For subsequent birth cohorts, the age constantly increases until the applicable age limit of 65 is reached in 2029.
Those who have been insured for a particularly long period of time can claim an old-age pension without deductions if they have been enrolled in pension insurance for at least 45 years. Early utilization, even with discounts, is not possible for this type of pension.
Simultaneously with the adjustment of the entry age, the deduction amount changes for long-term insured individuals opting for the "pension at 63." German Pension Insurance (DRV) stipulates that a deduction of 0.3% per month applies if the pension is claimed before reaching the regular retirement age.
From January 2024, the taxation procedure for new retirees will change
Instead of 83%, 84% of the pension will now be subject to tax. This means that 16% of the first full gross annual pension remains tax-free. This change only affects individuals retiring from January 2024.
The legislative body plans to retroactively increase the taxable portion of the pension, starting from 2023, with a half-percent increment. The legislative process for this change is not yet complete.
From 2024, additional earning limits for pensions will be raised due to reduced employability. If a person receives a partial disability pension, from January, the annual minimum additional income limit will be €37,117.50.
For full disability pensions, this limit is €18,558.75 per year.
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The upcoming changes in retirement age will affect individuals born in 1958, as the regular retirement age will be increased to 66 years starting in 2024. This means that those who have been insured for an exceptionally long time and were born in 1960 will need to wait until they are 64 years and 4 months old to claim the "pension at 63".
With the changes in the taxation procedure for new retirees from January 2024, only 84% of the pension will now be subject to tax, with 16% of the first full gross annual pension remaining tax-free.
