- what happens if you no pension application but keep working want to go?
- Nobody has to forced to retire walk
- At what time the pension increasesif you keep working?
- With the employer talk: why this is important
You can actually submit your application for a pension a few months before you reach the age limit that applies to you. If you don’t do that, there’s no money either. More and more workers are missing out conscious time limitcontinue to work and pay undiminished into the pension insurance. But is that even allowed and how does it pay off?
No one is forced to retire
No one is obliged to apply for a pension when they reach the regular retirement age. If you do not apply for a pension, no pension will be paid. Instead, continued work – insofar as it is permitted under the employment and collective agreement – possible until well after the standard retirement age has been reached.
Main motive for the renewal is it, through the continuation of the contribution payments, to increase the pension. Of course, as a retirement pension recipient, you can too work alongside retirement without any earnings limits. Especially for early retirees This form is attractive because the additional income limit has been abolished since 2023. But then you no longer pay into the pension insurance.
What are the effects of continued employment with payment into the pension insurance? If the pension is not claimed, the subsequent pension entitlement increases by 0.5 percent per month. This amounts to an increase of six percent. Employees and employers continue to pay pension insurance contributions. This also increases the future pension.
By how much does the pension increase if you keep working?
By how much does it increase Pensions of average earners by postponing the start of your pension by one year? An average earner (3,242 euros per month) who has paid contributions for 45 years when reaching the regular retirement age would currently receive a monthly Received a gross pension of EUR 1,538.55 in the old federal states.
If he or she postpones retirement by two years and continues to work, the pension entitlement would be at today’s rates to 1,799.76 euros. This corresponds to an increase of around 17 percent. An average earner in the west increases the pension with each additional year of work, in this example so around 130 euros.
Insured persons who have completed the minimum insurance period of five years and who have not yet submitted an application for an old-age pension shortly before reaching the statutory retirement age will receive a notice letter from the pension insurance. The Deutsche Rentenversicherung (DRV) informs you that you are entitled to a standard old-age pension. However, it is only paid out on application. In this context, information is provided on the effects of further postponing the start of retirement.
Talk to the employer
That Corporate interest is growingto employ employees beyond the retirement age in times of a shortage of skilled workers. Companies often do not want to do without experienced, well-qualified employees just because they have reached normal retirement age. A Japanese proverb says: “When an old person dies, it is like a library that burns.” Many companies no longer want to afford that. If both sides want this, it makes sense to make a contractual arrangement.
There is often one in employment contracts retirement clause, which is then easy to extend. Once the contractual matters have been clarified with the employer, you can simply continue working. The employer must continue to pay 50 percent of the contribution to the pension insurance (8.6 percent of your gross income).
Chairpersons who agree continued employment with their employees after retirement should limit this employment contract. Companies can do this as often as they like – the new time limit does not discriminate against older people, according to the Federal Labor Court (judgment: Federal Labor Court of December 19, 2018, Ref.: 7 AZR 70/17). The time limit also makes sense for employees.
Conclusion
Compared to the 269,000 new recipients of the “pension at 63” who came in 2021, those who continue to work and thus postpone their retirement age are numerically small. Working another year to collect around 130 euros more pension per year of employment is obviously not particularly attractive for those affected. Nevertheless, it is good that the pension insurance at least has this little flexibility.
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