Question 1

How is the German state pension calculated?

Accepted Answer

The pension formula is: sum of pension points × access factor × pension type factor × current pension value. The points reflect your income relative to the average wage of all insured people, the access factor accounts for an earlier or later start, the pension type factor is 1.0 for an old-age pension, and the current pension value has been €42.52 per point since 1 July 2026. Someone with 40 pension points retiring at the standard age therefore receives roughly €1,700 gross per month.

Question 2

What is a pension point and what is it worth?

Accepted Answer

One pension point corresponds to a calendar year in which you earned exactly the average wage of all insured people — provisionally €51,944 in 2026. Earn half of that and you get 0.5 points; earn double and you get 2.0 points. At the top the contribution ceiling of €101,400 caps the annual gain at 1.9521 points. Each point currently raises the monthly gross pension by €42.52.

Question 3

How large is the deduction if I retire early?

Accepted Answer

For every month you draw your pension before your standard retirement age, the access factor falls by 0.003 — a deduction of 0.3 percent per month or 3.6 percent per year. Starting at 63 with a standard age of 67 means 48 months × 0.3 percent = 14.4 percent. On a gross pension of €1,600 that is around €230 less per month. The deduction is permanent and later also reduces any survivor's pension.

Question 4

When can I retire at 63 or 65 without deductions?

Accepted Answer

Two qualifying periods matter. With 35 qualifying years you can draw the pension for long-term insured from 63 — but with the full deduction up to the standard retirement age. With 45 qualifying years the pension for especially long-term insured applies: for everyone born in 1964 or later it is deduction-free at 65, two years before the standard age of 67. Qualifying periods include not only employment but also child-raising and care periods.

Question 5

Is it worth working longer and deferring the pension?

Accepted Answer

If you draw your pension after the standard retirement age you receive a bonus of 0.5 percent for each month of deferral, i.e. 6 percent per year. If you also keep working you accumulate additional pension points at the same time — the two effects add up. Working one year longer can therefore raise the pension by 8 to 9 percent. Purely arithmetically it takes around 15 to 17 years for the bonus to offset the pension payments forgone; for people in good health who enjoy their work it pays off over the long run.

Question 6

How much tax will I pay on my pension?

Accepted Answer

Only the taxable share is subject to tax, and that share depends on the year your pension starts. For a start in 2026 it is 84 percent, rising by 0.5 percentage points per cohort — 86 percent in 2030, 91 percent in 2040, with full taxation only from 2058. The tax-free remainder is fixed in euros as your pension allowance and does not change later. From the taxable pension you also deduct your health and care insurance contributions as special expenses; only what is left meets the income tax tariff with its basic allowance of €12,348.

Question 7

Which contributions are deducted from the pension?

Accepted Answer

Compulsorily insured pensioners pay half the general health insurance rate of 7.3 percent plus half the supplementary rate; with an average supplementary rate of 2.9 percent in 2026 that comes to 8.75 percent. The pension insurance fund pays the other half. The care insurance contribution of 3.6 percent, however, is borne by pensioners alone; childless pensioners pay 4.2 percent, those with several children under 25 correspondingly less. On a gross pension of €1,600 that means about €198 for health and care insurance before any tax is due.

Question 8

How accurate is this pension calculator?

Accepted Answer

The calculator implements the pension formula, the access factor under § 77 SGB VI, the age limits under §§ 235 and 236b SGB VI and the taxation rules of § 22 EStG correctly, using the verified 2026 figures. The uncertainty lies not in the formula but in the assumptions: your current salary is projected forward in a straight line, and future pension increases and gaps in your insurance record are left out. The closer your retirement date and the more precisely you enter your pension points from the official statement, the more reliable the result. Only the information issued by the German pension insurance is binding.

Guide: Pension Calculator

Calculating Your German State Pension: What You Will Really Receive

Pension Points Simply Explained

Retiring at 63: What the Early Exit Costs

Deductions and Bonuses: 0.3% per Month, and What That Means

Calculating and Closing Your Pension Gap

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