When can I retire in Germany?

It depends on your year of birth and your insurance years. You retire without a deduction at the statutory age: 67 for those born in 1964 or later, between 66 years 2 months and 66 years 10 months for those born 1959 to 1963. With 35 insurance years a pension from 63 with a deduction is possible, with 45 years from 65 without a deduction (born 1964 or later). The pension starts on the 1st of the month after your birthday.

Does the pension at 63 still exist?

Yes, but usually only with a deduction. With 35 insurance years you can still retire from 63, with a 14.4% deduction if born in 1964 or later. The deduction-free pension after 45 years was available at 63 only to those born up to 1952. For those born in 1964 or later the limit is 65. In 2026 the pension commission proposed raising the earliest age to 64. That has not been decided.

How big is the deduction for retiring early?

0.3% for every month before the deduction-free age (§ 77 SGB VI), i.e. 3.6% per year. For the pension for long-term insured persons from 63, this is at most 48 months and 14.4% for those born in 1964 or later. For the pension for severely disabled persons, at most 36 months and 10.8%. The deduction applies for life. With a €1,500 pension, a 14.4% deduction costs €216 a month.

When can I get the pension without deductions after 45 years?

At 63 for those born before 1953; after that the limit rises by 2 months per year of birth: 64 years 4 months for 1960, 64 years 10 months for 1963 and 65 for 1964 and later (§ 236b and § 38 SGB VI). This pension cannot be brought forward. If you have 45 years and want to go earlier, you must take the pension for long-term insured persons, with the full deduction up to the statutory age.

When exactly does my pension start?

On the 1st of the month after you reach the age limit (§ 99 SGB VI). Example: born 15 March 1964, turns 67 on 15 March 2031, pension starts 1 April 2031. Special case: if you were born on the 1st of a month, you legally complete the year on the last day of the previous month. Born 1 April 1964 therefore means a pension start on 1 April 2031, one month earlier than if born on 2 April.

When can severely disabled people retire?

With a degree of disability of at least 50 at the pension start and 35 insurance years, those born in 1964 or later can retire at 65 without a deduction or from 62 with up to 10.8% deduction (§ 37 SGB VI). For those born 1952 to 1963 the limits rise gradually, e.g. for 1960: 64 years 4 months without deduction or from 61 years 4 months with deduction (§ 236a SGB VI).

Can I earn without limit alongside an early pension?

Yes. Since 1 January 2023 there is no earnings limit for old-age pensions, even before the statutory age. So you can draw the pension with a deduction at 63 and still keep working full time. Contributions from your wages raise your pension later. Note: limits still apply to disability pensions.

Is it worth retiring later?

For every month you defer your pension past the statutory age, it rises by 0.5%, i.e. 6% a year, permanently. On top come the earnings points from continued work. Since 2026, wages up to €2,000 a month are also tax-free if you keep working past the statutory age (active pension). Whether it pays off mainly depends on your life expectancy.

Offsetting Pension Deductions: How to Buy Out the Early Pension Penalty | Retirement Age Calculator

Retire earlier without giving up money

If you retire at 63 and were born in 1964 or later, you lose 14.4% of your pension for life. Many people do not know that this deduction can be fully or partly "bought back". § 187a SGB VI makes it possible: up to the statutory retirement age you can pay contributions that offset the pension reduction caused by an early start.

How the offsetting payment works

The route is a special pension information request. You ask your pension insurance for a statement of the contribution needed to offset the pension reduction. This statement is available from your 50th birthday. In it you declare that you intend to claim an old-age pension early. The pension insurance then calculates how many earnings points the deduction would cost you and how much it costs to top them up.

You do not have to pay the full amount. Partial payments are expressly permitted, even spread over several years. So you could offset only half of the deduction, or pay a part every year and use the tax saving several times.

What it costs

The cost depends on how many earnings points the deduction costs and how early you retire. The higher the expected pension and the larger the deduction, the more expensive it is. A full offset of 14.4% quickly adds up to five-figure sums, often several tens of thousands of euros for average pensions. Only the pension insurance statement gives the exact amount. The retirement age calculator shows beforehand what deduction applies to you at all.

Tax: fully deductible

Offsetting payments are contributions to the statutory pension insurance and therefore retirement provision expenses. Since 2023 they have been fully deductible as special expenses up to the annual maximum. Because the maximum also covers your regular pension contributions, it often pays to spread the payment over several years. If your employer pays the offset, for example as part of a severance package, half of it is tax-free (§ 3 no. 28 EStG).

And if you do not retire early after all?

There is no refund. The money is not lost, though: if you end up retiring at the statutory age, the contributions stay in your pension account and increase your pension. The main risk is that you cannot use the money for anything else until your pension starts.

Who benefits?

An offset is particularly worthwhile if

you are certain you want to retire early, for example at 63,
you receive a severance payment that would otherwise be heavily taxed,
your tax rate is much higher now than it will be in retirement,
you have a long life expectancy, because the offset works for life.

It makes less sense if you need the money for other expenses or will only draw the pension for a short time. Advice from the pension insurance is free of charge. Have the statement explained there before you pay.

Alternative: retire later

Instead of offsetting deductions, you can also bridge the time until the deduction-free pension, for example with part-time work alongside an early pension. Since 2023 you may earn any amount alongside any old-age pension. If you work beyond the statutory age, you even receive a 0.5% bonus per month and benefit from the tax-free active pension. The active pension calculator works this out.

More on deductions and age limits in the guide Pension at 63 and retirement age in Germany.

Offsetting Pension Deductions: How to Buy Out the Early Pension Penalty

Retire earlier without giving up money

How the offsetting payment works

What it costs

Tax: fully deductible

And if you do not retire early after all?

Who benefits?

Alternative: retire later

You might also find useful

Pension Calculator

Net Pension Calculator

Active Pension Calculator