Retiring earlier – here's how it can work
Retirement used to be a fixed milestone in life: at 65, gainful employment ended and retirement began. Today, not only has the retirement age shifted, but the needs and wishes surrounding the topic of retirement have also changed.
More and more people want to plan flexibly and – if possible – retire earlier. The reasons for this are varied: more time with family, health limitations, or simply the desire to actively and independently shape their retirement. The good news: there are various ways to individually adjust your retirement start. The less good news: not all options are possible without financial sacrifices.
In this article, you will learn about the available options, how to avoid deductions, and what you should consider to shape your retirement according to your wishes.
What is my retirement age?
Currently, the regular retirement age in Germany is 67 years. However, for people born before 1964, transitional rules with staggered age limits apply. For example, those born in 1958 can regularly retire at 65 years and 10 months. The retirement age increases gradually for each birth cohort until 67 years is reached as the standard age.
Special regulations for certain groups:
The regular retirement age of 67 does not apply to all insured persons. The statutory pension insurance provides special regulations for certain groups of people, which make it possible to retire significantly earlier – sometimes even without financial deductions. For example, those who have paid into pension insurance for many years, live with a recognized severe disability, or have performed a particularly arduous job can benefit from these special regulations.
A key example is the old-age pension for those with a particularly long insurance period. Those who can prove at least 45 years of compulsory contributions – for example, through a long period of employment, caring for relatives, or child-rearing periods – are allowed to retire before the age of 67 without deductions. For many, this is an attractive way to enjoy their well-deserved retirement a little earlier.
People with a recognized severe disability (at least a degree of disability of 50) are also entitled to an earlier start to their pension. Depending on their year of birth, they can retire as early as 60 or 62, often with fewer or no deductions. However, a prerequisite is a minimum insurance period of 35 years and proof of severe disability at the start of the pension.
Particularly strenuous occupations such as underground mining are also given special consideration. Those who have worked for many years under extreme physical conditions can also retire earlier – with a reduced waiting period and special regular retirement ages.
These special regulations are intended to honor the life achievements and particular burdens of individual professional or life situations. They offer important flexibility when planning retirement – and make it possible to switch off earlier without necessarily having to accept major financial disadvantages. Anyone who believes they belong to one of these groups should seek advice in good time – because the requirements are sometimes complex and differ depending on the year of birth and insurance history.
What periods count as insurance years?
For many who wish to retire earlier, a key question is: Which periods actually count towards the so-called insurance years – and how many of them do I need? The answer is crucial, as certain types of pensions – such as pensions for long-term or exceptionally long-term insured persons – require a specific number of insurance years.
Basically, any period during which you have paid contributions into the statutory pension insurance counts as an insurance period. This primarily concerns your professional years: Whether as an employee or a self-employed person – your gainful employment generally forms the basis of your pension entitlement.
However, not only paid work counts. Periods during which you received unemployment benefits, sickness benefits or transition benefits are also taken into account. Similarly, phases in which you have paid voluntary contributions – for example, if you were abroad for a while or were in a transitional phase – are recorded.
An often underestimated point: So-called equivalent periods also flow into the pension calculation. These include, among other things, child-rearing periods, in which a parent has foregone gainful employment to care for their offspring. Care periods – i.e., the care of relatives in the home environment – are also credited. This means the pension system acknowledges not only classic employment histories but also social responsibility.
In addition, school and university periods, certain training periods or transition periods (e.g., after finishing school until the start of training) can also be considered to a limited extent. Even mini-jobs are included if corresponding pension insurance contributions have been paid – either voluntarily or by the employer.
The so-called minimum insurance period is crucial, which can range from 5 to 45 years depending on the type of pension. For example, anyone wishing to retire earlier generally needs at least 35 insurance years. For a pension without deductions for exceptionally long-term insured persons, it is even 45 years.
To keep track, it is worth regularly checking your own pension information or seeking personal advice from the German Pension Insurance. This way, you can find out which periods have already been credited – and whether there are ways to supplement missing periods through voluntary contributions.
Special Cases of Retirement Age
Not everyone has the same standard retirement age. There are certain groups of people for whom special regulations apply – be it due to particular life circumstances, health limitations, or unusual activities. Here's an overview:
Retirement pension for the long-term insured
Anyone who can prove at least 45 years of insured service may, under certain conditions, retire early without deductions. This means: No financial deduction – despite an earlier start to their pension. It is important to note that only specific periods are recognised (e.g. compulsory contributions from employment or care).
Retirement pension for long-term insured persons
This type of pension is possible after only 35 years of contributions, but it is not without deductions. Those who wish to use this option must expect monthly pension deductions – the earlier the retirement age, the higher the deduction.
Old-age pension for severely disabled persons
People with a degree of disability (GdB) of at least 50 can already retire at 62 years of age – with deductions. Those who have been insured for at least 35 years can retire without deductions at the age of 65. More generous regulations apply here, which are intended to help compensate for health burdens.
Pension for miners
Another special regulation applies to employees who have worked underground for many years – i.e., who have been employed in particularly strenuous working environments. For them, the minimum insurance period can be as little as 25 years if this period was spent underground. Here, too, an earlier start to retirement is possible.
Pension for long-term self-employed individuals with voluntary contributions
Anyone who has been self-employed for many years and has voluntarily paid into the statutory pension insurance can – depending on the number of recognized insurance years – also fall under the regulation for long-term or particularly long-term insured persons. A precise examination by the pension insurance is particularly important here.
There isn't a single pension scheme. Those who inform themselves and seek advice in good time can often benefit from individual options – and shape their retirement more independently.
Retiring early: Beware of deductions!
The desire to retire earlier is widespread – be it to spend more time with family, pursue a hobby, or simply take things a little slower. However, anyone who wishes to leave professional life prematurely without special regulations must expect pension deductions.
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Minimum insurance period: 35 years required
For early retirement to be possible at all, at least 35 years of insurance must be proven in the statutory pension insurance. This includes, among other things, periods of employment, child-rearing periods, care periods, or even phases with voluntary contributions. -
Deductions: 0.3% per month of earlier pension commencement
Those who retire earlier must expect a permanent pension reduction of 0.3% per month. This results in a deduction of 3.6% per year. For example, anyone who retires four years earlier will receive 14.4% less pension – for life. -
Maximum lead time: four years
The early old-age pension can be claimed at the earliest four years before the regular retirement age. So, if someone would normally retire at 67, they could retire at 63 at the earliest – with the maximum deduction. -
Option to compensate through voluntary payments
Anyone wishing to avoid these deductions can, under certain conditions, voluntarily pay additional contributions into the pension fund. This allows the deductions to be fully or partially offset. This is particularly worthwhile for people who have made financial provisions or expect a high pension. -
Consultation strongly recommended
Early retirement should be carefully considered – after all, the decision has a permanent impact on the financial situation in old age. It is therefore advisable to seek individual advice from the German Pension Insurance. This way, possible alternatives can be examined and the effects precisely calculated.
Partial Retirement for Active Employees
Not everyone wants or is able to fully retire from working life immediately. The part-time pension, also known as "old-age pension for those with many years of insurance combined with part-time work," is a model for anyone who wants to make the transition to retirement flexible and gradual.
Flexible retirement from age 63
Anyone who can demonstrate at least 35 years of insurance contributions can draw a partial pension from the age of 63 – i.e., a reduced pension payment parallel to their professional activity. This allows you to gradually reduce your working hours without giving up a regular income.
Three partial retirement stages to choose from
Depending on your preference, the partial pension can be drawn in three stages: at one-third, half, or two-thirds of the regular full pension. This gives you a lot of flexibility – for example, if you only want to gradually reduce your weekly working hours.
Observe additional earning limits
During partial retirement, you are still allowed to work and earn income. However, certain earnings limits apply. If this limit is exceeded, reductions in your partial pension may occur. Since the reform of the earnings regulations in 2023, however, the limits have been significantly relaxed – in many cases, the partial pension remains fully intact even with higher earnings.
Tax Advantages and Social Security
Combining a part-time job and a partial pension can also be beneficial from a tax perspective. Additionally, by continuing to work, you remain socially insured – for example, in health, long-term care, and unemployment insurance. This can also have a positive impact on your full pension later on.
Attractive for companies and employees
Part-time retirement is not only attractive to employees but also to employers. This is because a gentle transition into retirement allows for the retention of knowledge and experience within the company and the early organization of succession.
The partial pension is not paid automatically – it must be applied for at the German Pension Insurance. It is advisable to submit the application early and seek detailed advice beforehand to find the right combination of work and pension.
Reduced Earning Capacity Pension
The reduced earning capacity pension supports individuals who are no longer able to work, or can only work to a limited extent, due to health restrictions.
When will it be paid?
There are two types of reduced earning capacity pensions:
- If you can still work up to 6 hours a day.
- If you can work less than 3 hours a day.
Requirements
To be eligible for an invalidity pension, you must have paid into the pension insurance scheme for at least 5 years and have been in mandatory employment for at least 3 years in the last 5 years before applying.
Pension amount
The pension is calculated based on the years of contributions. It is usually lower than the normal old-age pension, as it is based on the pension entitlements acquired to date.
Duration
The disability pension is initially granted for 3 years but can be extended if the health impairment persists.
Reintegration
After a certain period, you can return to professional life under certain conditions – for example, through retraining or a gradual return.
Retirement for Severely Disabled Persons
For severely disabled people, there are special regulations that make it easier to retire. Those who can prove a degree of disability (GdB) of at least 50 can, under certain conditions, retire earlier – and without deductions from their pension amount.
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Earlier Retirement Age
As a rule, severely disabled people can draw their pension two years earlier than the general standard retirement age. This means they can retire at 65 instead of 67. -
No Pension Reductions
A particularly important advantage: early retirement does not lead to the usual pension reductions that are often incurred with an earlier retirement. This allows for a fuller pension payment, without financial disadvantages. -
Conditions for Early Retirement
To benefit from this regulation, the severe disability pass must be available before retirement and an official determination of the degree of disability must be proven. The application for early retirement must generally be submitted to the German Pension Insurance.
Tip: Retire early with a long-term working time account
A long-term working time account offers a flexible way to retire earlier without having to forgo financial security. This model allows you to save working hours or salary over the years to then leave earlier or reduce working hours.
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How does it work?
Over the years, in consultation with your employer, you can save working hours or salary in a so-called long-term working time account. The accumulated capital or saved working hours are then used to either enable earlier retirement or to utilize part-time models. -
Benefits for retirement:
The long-term working time account primarily offers the advantage that you can make your transition to retirement more flexible. For example, by working part-time and simultaneously drawing from the account, you can make the transition to retirement smoother and financially secure. -
Long-term planning
Especially important: A long-term working time account should be planned early, as it usually needs to be set up over many years to achieve the desired effect. It is worthwhile to discuss this option with your employer early on and develop a long-term strategy.
Pension contributions 2025
In 2025, there will be several changes in the area of pension contributions. It is important to be informed early about the expected contribution adjustments to be able to plan your own retirement provision accordingly.
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Amount of pension contributions
From 2025, pension contributions may rise slightly to counteract increasing expenses in the pension system. Those planning long-term should include these adjustments in their pension calculation. -
Impact on pension payments
The adjustment of pension contributions can affect the amount of your pension entitlements. Early information and targeted saving during your working life can help to offset these changes and close the pension gap. -
Pension insurance and voluntary payments
Those who are not dependent on full pension contributions have the option to make voluntary contributions to further increase their pension entitlements. This option can be useful for those who wish to retire before the regular retirement age.
Retirement security with Gardia
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Conclusion
The path to retirement doesn't always have to involve a sudden transition from work to pension. Thanks to flexible models such as partial retirement, reduced earnings capacity pension, or a working lifetime account, you have many options to tailor the transition individually and adapt it to your life situation. Especially for severely disabled individuals, there are special regulations that allow for earlier retirement without deductions.
An important aspect for planning retirement is early engagement with pension contributions and the regulations for the years after 2025. This way, you can ensure that your transition into retirement goes as smoothly as possible.
