The number of early retirees is steadily increasing.
Experts are pushing for the scraping of the 'pension at 63' for long-term insured folks, but this practice enjoys popularity in 2023 according to the German Pension Insurance stats. The number of those retiring early has been on a surge. Last year, a staggering 279,000 long-term insured people utilized 'pension at 63' sans deductions, as per a report in Rheinische Post, citing undisclosed German Pension Insurance figures. That's a huge rise from the count of 262,000 the previous year, making it a 17,000 jump.
It's a clear indication that the joy of working longer fades fast. The desire of non-long-term insured individuals to retire earlier than the standard retirement age is on the uptick, with Pension Insurance revealing that the number of aged workers retiring pre-retirement age with deductions saw an escalation in 2023: 243,862 kicked off their retirement with deductions, as against the 223,580 in the earlier year, amounting to c.20,000 more.
The retirement age has slowly gone from 65 to 67 since 2012. Early retirement enthusiasts will need to brace the idea that their benefits will endure a permanent 0.3% deduction for each month the retirement age is hastened.
Recent data from Pension Insurance reveals that almost a quarter of the some 953,000 elderly folks who took the plunge into retirement opted for deductions. In contrast, the proportions were similar in 2022, but the tally of those starting retirement with deductions plummeted to 875,000. On average, the pension withdrawals with deductions took place 30 months before reaching the typical retirement age in the past year. Back in 2011, the average lag prior to retirement was more like 36 months, with a significantly higher chunk of premature pensions (48%) as per Pension Insurance’s records.
Within the traffic light coalition, the FDP is rallying for abolition of the 'pension at 63'. They stress that it fuels "incentives we can’t afford". Businesses and pension experts bemoan a potential crisis due to the escalating shortage of specialized workers.
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Despite the advocacy by experts to abolish the 'pension at 63' for long-term insured individuals due to a perceived skills shortage in retirement, it remains popular in 2023, as evidenced by the German Pension Insurance statistics. The retirement at 63, without deductions, saw a significant increase last year, with 279,000 long-term insured people utilizing this option, up from 262,000 the previous year.
The rising popularity of early retirement at 63, as per the German Pension Insurance data, exacerbates the ongoing skills shortage in various industries. Businesses and pension experts warn of a potential crisis due to the lack of specialized workers in the retirement age population.
