Why you should pay voluntary pension contributions now
Voluntary contributions to statutory pension insurance can increase your pension and compensate for reductions. Or even secure an entitlement at all. Payments for 2023 should be made quickly. You can read why this is advisable here.
If you would like to pay voluntary contributions into the statutory pension insurance scheme, you should pay the contributions for 2023 this year. Although the contributions for 2023 can still be paid until April 2, 2024, the amount to be paid will increase by around four percent from 2024.
Anyone still paying contributions in 2023 can choose an amount between the current minimum monthly contribution of 96.72 euros and the maximum monthly contribution of 1357.80 euros. The insurance number, first name and surname and the period for which the contributions are intended must be stated on the transfer. Anyone who does not pay contributions for 2023 until 2024 must pay at least 100.07 euros per month, while the maximum contribution rises to 1404.30 euros per month, according to Deutsche Rentenversicherung.
Secure your entitlement
Voluntary contributions are particularly useful for those who are not covered by statutory pension insurance or who would like to use the additional contributions to fulfill the five-year waiting period required for pension entitlement. Mothers and fathers who have never paid into the pension fund and instead devoted themselves to bringing up children benefit in particular. They are credited with three years of child-raising time for each child born after 1992. Mothers and fathers whose children were born before 1992 have been credited with two years of notional contribution payments since 2014 - previously it was only one year. However, this is not enough to qualify for a state pension, at least for one child. In this case, paying voluntary contributions can secure your pension entitlement.
Increase your pension
Freelancers and civil servants can also secure their statutory pension in this way and also freely choose the amount of their monthly contribution within the limits mentioned. In the case of civil servants, the statutory pension acquired in this way does not reduce the amount of the pension. However, employees who are compulsorily insured, have reached the age of 50 and wish to retire early can also compensate for a reduction in their pension by paying voluntary contributions. The payment can also be used to maintain insurance cover for a pension due to partial or full reduction in earning capacity. The contributions are also tax-deductible.
Voluntary contributions increase the pension entitlement. The higher the contributions paid, the higher the pension increase. Paying the voluntary minimum contribution of 96.72 euros for a period of one year currently results in a monthly gross pension increase of around 5.78 euros; with the maximum contribution of 1320.60 euros, the gross increase is around 78 euros. If voluntary contributions are transferred, the insurance number and the period for which the contributions are to apply must be specified. No distinction is made between the old and new federal states.
Remember to pay contributions
The old-age pension is paid for the rest of your life - no matter how old you get. In the event of death, pension payments can be made to surviving dependants. However, pension savers must bear in mind that taxes are usually payable on the pension in retirement, albeit usually much less. Many people also have to pay contributions of around 11 percent for statutory health and long-term care insurance.
The amount by which voluntary payments increase the statutory pension can be calculated using the calculator on the information portal www.ihre-vorsorge.de. The German Pension Insurance is also available for information, advice and forecasts. All information on voluntary insurance can also be found in the free brochure "Freiwillig rentenversichert: Your benefits" - it can be downloaded here.
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Source: www.ntv.de
