Berlin
Anyone who retires early can earn unlimited additional income from this year. We’ll show you how to get the most out of your retirement.
Since January 1, early retirees have been able to earn unlimited money in addition to their pension. The so-called additional income limits were abolished at the turn of the year. This means that seniors who have not yet reached normal retirement age can continue to work without their early retirement pension being reduced.
In the past two years, the additional earnings limit for early retirees was around 46,000 euros as part of a temporary special corona regulation. Before the corona pandemic, the limit was already 6,300 euros per year. Those who earned more had their pension reduced. Because of a change in law from the Ministry of Labor of Minister Hubertus Heil (SPD), these limits are now completely gone.
Retire earlier and still keep working
Also disability pensions can be obtained from January 1, subject to dynamic additional income limits. This means that when drawing a pension due to a partial reduction in earning capacity, there is an additional earnings limit of around EUR 35,650 in 2023, and for pensions due to a full reduction in earning capacity of around EUR 17,820.
For pensions for reduced earning capacity, employment or self-employment is only permitted within the framework of the determined performance may be exercised, which is the basis for the disability pension. Otherwise, the entitlement to the pension can be lost despite compliance with the additional income limits.
Who can take early retirement?
In principle, the change in the law is intended to give a little more flexibility retirement make possible. It should be noted that not everyone has the opportunity to retire early and without deductions. If you want to retire at 63 after 35 years of contributions, you usually have to expect deductions from your pension. If you have 45 years of contributions, you can retire at 63 with no deductions.
The new regulation can be particularly interesting for people who only have 35 years of contributions, because they could compensate for pension reductions with a part-time job or even a full-time job in the first few years of retirement. It would also be possible to continue working and partial pension to apply. If in doubt, the pension advisor or the German pension insurance company will provide information about what is the best individual solution.
Part-time job obliges early retirees to file tax returns
Irrespective of the additional income limit, the additional income is also taxable in the future if the taxable income is paid together with the pension basic allowance is exceeded. In any case, filing a tax return is mandatory.
Seniors who have already passed the regular retirement age are not affected by the additional earnings limit. They can top up their pension as much as they like without having to fear a reduction. (lro/dpa)
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