Retiring in Germany

Update 15.12.2022

How much pension can I collect?

People who stop working because of their age are called retirees. Many are worried that they will not have enough money as they go into retirement. Poverty among pensioners is, in fact, a growing problem in Germany, in particular, for those who did not earn much during their working years. It is, therefore, all the more essential to deal with the issue of pension early on and before reaching retirement age. Here, we explain how the statutory pension system works in Germany and what other pension options there are.

What do I need to know?

How does the statutory pension work?

If you work in Germany, your employer will automatically pay part of your gross salary to the pension insurance scheme. Furthermore, your employer makes a separate contribution to the pension insurance scheme for you, and the state is also providing tax subsidies. The resulted funds are paid to the people who are currently in retirement. That means, when you later become a retiree, your pension will be paid by the younger generation. This arrangement is called the apportionment procedure ("Umlageverfahren").

Who contributes to the statutory pension insurance?

Employees who are covered by (and contributing to) social insurances (i.e. people earning more than €450 per month) automatically pay a certain percentage of their income into the pension insurance scheme. People who are not covered by compulsory insurance (for instance, civil servants or self-employed individuals) can voluntarily contribute to the statutory pension insurance, as long as they do not receive a pension because of their age ("Alterrente"). Doing so may be worthwhile if one is taking a short break from work or in case one has not yet contributed to the pension insurance long enough (minimum years of contribution) to benefit from it. You can read more about the minimum years of contribution in the section "Am I entitled to a pension in Germany?".

For people with a so-called mini job, the following applies: You can get exempt from pension insurance. To do do, you must submit an application to your employer for exemption from compulsory pension insurance. If you do not apply and get exempt from compulsory pension insurance, part of your salary will be deducted and paid into the pension insurance. You will then earn a little less, but in return acquire a (low) pension entitlement and can retire earlier when the time comes.

Am I entitled to a pension in Germany?

In order to receive a pension in Germany, certain conditions must be met: you must have reached the minimum age, and you should have been insured for long enough.

  • The minimum age for the regular retirement pension („Regelaltersrente“)  depends on your year of birth. If you are born after 1964, you cannot retire before the age of 67. If you are born earlier, you may retire at an earlier age. You can read more about the minimum age on finanztip.de in section “Wann beginnt die Rente?” (in German).
  • However, you can only claim a pension if you have made pension insurance contributions for at least five years. This regulation is called the minimum insurance contribution period ("Mindestversicherungszeit").

In addition to the regular retirement pension, there are other types such as the retirement pension for those who have been insured for many years ("Altersrente für langjährig Versicherte"), the retirement pension for persons who have been insured for a particularly long time ("Altersrente für besonders langjährig Versicherte"), or the retirement pension for severely disabled people ("Altersrente für schwerbehinderte Menschen"). These types of pension have different minimum ages and years of contribution. Moreover, in these cases, it is also possible to retire earlier, but you will receive a lower pension. You can find more detailed information about these types of pension in simple German on the website of the German Pension Insurance – more comprehensive information is available at deutsche-rentenverischerung.de.

Please note: If you have never contributed to the pension insurance fund or have not done so long enough (minimum insurance contribution period), you are not entitled to a pension in Germany. You can read more about this in the section "What if I am not entitled to a pension or my pension is too low to live on?".

Where and how can I apply for a pension?

If you live in Germany, you should apply to the German pension insurance. Same applies if you have acquired pension rights in another EU country or other states which have a social security agreement with Germany. The German pension insurance then forwards your application to the competent authorities in the relevant countries.

If you live in another country but are entitled to a pension in Germany, you claim a pension from the insurance provider in the country where you live, and they will forward your application to the German pension insurance. You can find the insurance provider responsible for you abroad on deutsche-rentenversicherung.de. If you live permanently (i.e. more than six months) outside the EU, in principle, your German pension will be cut; so before moving out of Germany, make sure you seek advice from the German pension insurance's counselling centre. You can call their hotline at 0800-10004800 to benefit from their cost-free consultation (in German).

To make sure you receive your pension on time, you should submit your application at least three months in advance. You can do so online at deutsche-rentenversicherung.de or per post. German pension insurance's consultation centres can also help you to complete the application on site.

Along with your application, you must also send the following documents:

  • an identification document like your ID card or passport
  • your pension insurance number ("Rentenversicherungsnummer")
  • the name of your health insurance and your health insurance number
  • your tax identification number
  • proof of vocational training
  • your bank account number

If you have children, you must also send birth certificates of your children. When completing the application, it is crucial that you indicate the periods you were insured in EU countries and the states which have social security agreements with Germany.

Please note: If you apply for your pension too late or in case the processing takes longer, your pension can be paid up to three months retroactively.

What is the pension insurance number ("Rentenversicherungsnummer")?

The Pension Insurance Number (for short: RVNR) is a twelve-digit number which is valid throughout your life. Since 2005, Babies born in Germany are issued such number after birth. Others will be sent this number as they start their first job with social security contributions or when they register at statutory health insurance through the job centre for the first time.

You will find your pension insurance number on your social security card as well as the letters you receive from the German Pension Insurance. If you cannot find this number, you can contact your health insurance or the German Pension Insurance. You can reach the German Pension Insurance at 0800-10004800. The phone calls are free of charge, and the staff speak German.

Are the periods that I have worked abroad also calculated?

The periods you have worked abroad are, under certain circumstances, taken into account as insurance periods to meet the minimum insurance contribution period. However, in principle, instead of a single payment, each country pays you the pension that you have earned there. So you may receive several pensions from different countries.

For your working time in other countries to be included, the country in question must be an EU Member State (including Iceland, Liechtenstein, Norway, Switzerland) or have concluded a ´social security agreement with Germany. These countries are called "Abkommensstaat". You will find a current list of all the states which have such agreement with Germany on deutsche-rentenversicherung.de.

Please note: Keep in mind that for each country in which you are entitled to a pension, you will be subject to the retirement age and rules in that country as well.

Can I work while receiving a pension?

Yes. As a pensioner, you can work as much as you like. All regulations regarding taxes and social security contributions apply to retirees as well. You can learn more in our chapter “Tax Declaration”. You can learn more about tax obligations in our chapter Tax Declaration. Since you are already receiving a pension, you no longer have to make any pension contributions for your earned income. But you have the option to voluntarily make contributions to increase your pension entitlement in the future.

Please note: If you go into early retirement ("Vorruhestand"), you may only earn a certain amount (€46.060, as of 2022) per year before deductions. If you make more, your pension will be deducted accordingly. Read more about early retirement at deutsche-anwaltshotline.de.

What type of health insurance can I have as a pensioner?

In general, individuals who receive a statutory pension are covered by the so-called "health insurance for pensioners" ("Krankenversicherung der Rentner", or for short: KVdR). The regular statutory health insurance companies (AOK, TK, ...) administer the KVdR . The contributions one makes to the KVdR, however, are lower. If you were employed and insured in at least 90% of the second half of your working life, you are in principle obliged to become a member of the KVdR. If you do not meet these requirements, you may voluntarily join KVdR under certain circumstances. It is best to check whether you can join the KVdR before you retire. For more information, seek advice from your health insurance company.

The amount of contribution you have to make for the KVdR depends on the level of your income, including your pension and other sources of income such as part-time jobs, etc.

If you were previously covered by private insurance, you can stay with your insurance company.

Find out more about health insurance for retirees on the website of the Consumer Protection Center.

Do I have to retire when I reach the age of retirement?

No. There is no legal time limit on how long you can work, so you are not obliged to retire when you reach retirement age. If you work longer, you will, in fact, receive a higher pension later. Not only because you pay more, but also because you receive a pension bonus of 0.5% for every month you work beyond your regular retirement age.

Please note: Sometimes your employment contract or collective agreement ("Tarifvertrag") requires that your contract automatically ends when you reach the retirement age. If that is not the case, there is no automatic or obligatory retirement for you. If you would like to stop working as you reach the age of retirement, you must terminate your contract within the regular applicable notice period. Keep in mind that your employer is not permitted to terminate your contract because you have reached retirement age.

How is the amount of my pension calculated?

The amount of your pension depends on your contribution period(s) and the amount of your income. The longer you have paid, and the higher your income, the higher your pension will be.

Contribution periods are periods in which you have made contributions into the statutory pension insurance plus the so-called non-contributory periods ("beitragsfreie Zeiten"). Non-contributory periods are, e.g. months or years spent for child care or nursing care for a loved one, maternity protection period, rehabilitation after illness, vocational training or education (school or university).

How do I know how much pension I will receive from the statutory pension insurance later?

You can find the answer to this question on your annual pension notice. It shows how much you have paid so far and how much your pension would be when you go through regular retirement in case you continue to earn the same income. There you will also find further information, for instance about the age you can go into a regular retirement.

The annual pension notice is a report you automatically receive every year if you are at least 26 years old and have made contributions to the pension insurance for five years or more. If you are at least 55 years old, you will receive a more detailed pension report every three years instead. In addition, every member has the right to request a pension report from the German pension insurance. You can do so on deutsche-rentenversicherung.de (in German).

If you find errors in your pension information or pension notice, you can contact one of the counselling centres of the German Pension Insurance at any time. It may be that e.g. the non-contributory periods you are entitled to are mistakenly disregarding. It is best to make sure everything is correct in your retirement records before you retire. Then you have enough time to submit possibly missing evidence for contribution periods or non-contributory periods.

Due to the rising costs, my pension is no longer sufficient to live on. Can i get help?

If your pension is not enough to live on, you may be entitled to what is known as “basic social security” or “subsistence income” (“Grundsicherung”). Similar to “Sozialhilfe, basic social security is a subsidy to your monthly income which you can use to pay for your rent, utility bills, health and nursing care insurance, food and clothing.

You are entitled to basic social security if you meet the following requirements:

  • You have reached the age limit for the standard old-age pension. You can find out how old you have to be in the section “Am I entitled to a pension in Germany?”.
  • Your total monthly income (as of October 2022) is less than €924.
  • You live in Germany.
  • You have a residence permit or German citizenship. Important: If you receive benefits from the Asylum Seekers Benefits Act, you will not receive basic social security.

The basic social security is (as of October 2022) between €360 and €449. You will receive the fund into your bank account every month. The following factors determine the amount of your basic social security:

  • The amount of your assets and the assets of your partner
  • The amount of your income and that of your partner
  • Your needs and expenses; i.e., the sum of your monthly costs. These are, for example, your rent, the costs of clothes, food or insurance.

You can apply for basic social security directly at the Social Welfare Office at your place of residence. You must re-apply every 12 months. Remember to submit the application in due time, because retrospective payment of the basic social security is not possible. You can learn more about basic social security at deutsche-rentenversicherung.de.

Please note: If you received basic social security in 2022, you are entitled to a one-off payment of €200. You may also be able to receive the energy price flat rate. You can learn more in our chapter “State Aid for Cost of Living Crisis”.

What if my pension is not sufficient to live on when I retire?

The so-called “basic pension” or “Grundrente” has been available for those whose pension is too small since January 2021. The basic pension is intended to prevent people from slipping into poverty in old age.

You are entitled to the basic pension if you meet the following requirements:

  • You have reached the age limit for the standard old-age pension. You can learn how old you have to be in the section “Am I entitled to a German pension?”.
  • You have paid into the pension scheme for at least 33 years. Times when you looked after your children at home or cared for relatives in need are also included. Important: The times you have worked in the countries with which Germany has concluded a social security agreement (“Sozialversicherungsabkommen ”) or to which EU law applies are also taken into account here. Times you have worked in Turkey and the USA are not included.
  • On average, you have not earned much over the years – that is at most 80 per cent of average earnings.

You receive the basic pension (“Grundrente”) in addition to your normal pension. The amount of your basic pension depends on your income and the duration and amount of your previous pension insurance contributions. The highest possible surcharge is currently (as of October 2022) around €441 per month.

You do not have to apply for basic pension separately. It will be paid to you automatically with your regular pension from the pension insurance. The pension insurance automatically checks your income against the data from your Tax Office. The basic pension can also be transferred abroad, as you do not need a place of residence in Germany to receive it.

The basic pension has been paid since July 2021. You can receive it retrospectively as of January 1, 2021. This means that you will be paid everything you have been entitled to since January 2021. You can learn more about basic pension (in German) on the deutsche-rentenversicherung.de. 

Can I obtain a permanent residence permit ("Niederlassungserlaubnis") as a pensioner?

One of the basic requirements for a permanent residence permit is that you can essentially secure your own livelihood, which means that you should receive little or no benefits from social services. The allowed percentage of income which may come from the Social Welfare Office varies from state to state. Ask the staff member responsible for you at the Immigration Office or a counselling centre for advice if you receive the so-called "basic insurance" in addition to your pension.

If your pension or other incomes are high enough and you do not need to benefit from the Social Welfare Office, you can obtain a permanent residence permit - provided all other requirements are met. You can find out more in our chapter "Permanent Residence Permit".

What can I do if I am not capable of working before retirement age?

If you can no longer work or can only do very little work due to a disease or an accident, you can receive the so-called "reduced earnings capacity pension" ("Erwerbsminderungsrente"). To apply for this type of pension, you must, in principle, meet the following requirements:

  • You must not be retired yet.
  • You cannot work at all or can only do so for less than 6 hours per day.
  • You have been insured for at least 5 years and have made compulsory contributions for at least 3 years.

Please note: If you are no longer capable of working in your profession but can work in another job, you are not entitled to a reduced earnings capacity pension.

You can apply for the reduced earnings capacity pension at your pension insurance, just as you do for the regular pension. You are expected to submit your medical certificate too. You can seek advice (in German) concerning the terms and conditions of reduced earning-capacity pension by calling  0800-10004800. In addition, Adult Migration Counseling Centre (MBE) can also help you. The MBE staff speak different languages ​- you can find one of their offices in your area at bamf.de.

What types of pension provision exist in Germany?

There are several ways to earn more during the retirement period. In addition to the statutory pension, there is the so-called occupational pension ("Betriebsrente") and the Riester or Rürup pension. Plus, you can, of course, also opt for private provision.

  • Occupational pension ("betriebliche Altervorsorge") is an option for those who work as employees. Here you save a certain amount of your income on a particular account, and your employer will also contribute to it. For more information, talk to your employer.
  • The Riester and Rürup pension are state-subsidized saving opportunities which may not be a suitable option for everyone. With the Riester pension, the state contributes a certain monthly amount into your retirement account, if you also pay a certain amount each month. Anyone who is contributing to social insurances can apply for the Riester pension. The Riester pension is especially worthwhile for people with low income and many children. Find out more about Riester pension at vzhh.de (in German). The Rürup pension, on the other hand, can be concluded by self-employed and freelancers. The advantage here is that your contributions are tax deductible. Your tax consultant can tell you whether the Rürup pension is an appropriate choice for you.
  • In a private pension provision, you invest your money where it is most profitable (for instance, in equity funds or real estate) so that you can live off the funds or its interest as you grow older.

The type of retirement plan which will make the most sense for you depends on your age, your income level, your financial resources, your family situation and, of course, your willingness to take risks. For most people, a combination of different options works best. For more information, you can seek advice from the Consumer Protection Center.

Important

Be cautious of banks or insurance agents who try to sell you a pension plan. Before making any decisions, seek advice from the Consumer Protection Center. Keep in mind that not every pension plan makes sense for every person.

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