Retirement at 69 years old: what, in fact, are we talking about now in Germany

At what age is a pension in Germany?

When a citizen of respectable age reaches old age and receives assistance from the state depends on the year of his birth.

Retirement age in Germany

Periodically, the German government discusses raising the retirement age. There are plans to increase it first to 68, and after 2069 to 70 years.

What is the pension in the countries of South and North America?

In South and North America, the range of pensions in each state is very different. Because everything depends on the quality of life of the population.

The United States of America is one of the most developed countries in America. The standard of living of the population is quite high, so pensioners also feel quite comfortable in retirement. In the US, men retire at 67, and women retire at 65. The average monthly pension in the United States is approximately one thousand dollars. Basically, US citizens prefer a funded pension system. Because the required amount can be accumulated over ten years of work in one company. And some manage to save up for several pensions during the period of work.

Pensions in Canada are paid to citizens who have reached 65 years of age. The average pension in Canada is $700 per month. The pension is formed from mandatory contributions.

How the benefit is issued

Germans do not automatically retire. You must submit a document to receive assistance, written by hand or on a special form. The latter, by the way, will speed up the review process.

The following documents are attached to the application:

• tax identification number;
• bank account details (bank name, bank code);
• health insurance card;
• passport or foreign passport.

In some cases, additional documents will be required in addition to the mandatory list:

• birth certificate of the child(ren);
• unemployment certificate;
• educational certificate.

German pension categories

There are two categories of pensions in Germany:

• state;
• private.

State pension

Financial support from the state is provided to citizens upon reaching 65-67 years of age or subject to a number of conditions. These include loss of ability to work, illness, and disability. The minimum benefit amount is 364 euros.

The state pension is paid only with compulsory work experience (minimum 5 years). If a citizen does not have one, he can only rely on private pension provision.

In the states of eastern Germany, pensions are higher than in the western part of the country by an average of 58 euros for men and 249 for women.

Pensions in France

In France, women retire at age 65, and men at age 67. The average pension in the country is about $700 monthly. The pension system in France is one of the most complex and multi-stage in the world. But at the same time, this gives pensioners and all citizens of the country confidence and stability in their future.

In addition to the states listed above, other European countries also have pensions, in some places they are higher and in others lower, but usually pension payments in Europe are among the highest and most worthy in the whole world, because they give their citizens the necessary amount of money for a decent and comfortable rest of your life.

Pension size in Germany?

If the senior citizen's total income does not exceed 789 euros, he is entitled to receive Grundsicherung - the minimum social benefit. The amount of assistance is calculated depending on the life situation, and ranges from 324-404 euros per month. A person needs to collect a number of documents and apply to Sozialamt - the state Social Security Administration.

In addition to this benefit, the state provides funds for repairs, medicines, and utility bills, depending on the life needs of the pensioner.

Private pensions in Germany

There are dozens of private pension funds in the country that provide benefits to older people. The service is popular among wealthy Germans and unofficially employed citizens. By the way, there are few of the latter in the state. How it works?

A person enters into an additional pension agreement and every month contributes a certain amount to the fund, the amount of which he determines independently. The system is cumulative and makes it possible to receive substantial monthly cash assistance in old age.

Funds go directly to an open bank account and not to the fund. In theory, they can be used at any time, but the Germans, a thrifty and practical nation, put them aside for old age.

Contributions to the German pension fund

The amount of the mandatory contribution is affected by the size of the official salary; the higher it is, the more a person contributes “for old age.” In Germany, transfers and other documentary issues are handled by the employer.

The standard monthly contribution to the pension fund is 18.7%. 9.35% of the contribution is paid by the employer, and the same amount is deducted from the person's salary.

If a citizen has an income of less than 450 euros monthly, contributions are distributed differently: 15% is contributed by the employer, 3.7% by the employee.

Every year the Pension Fund sends letters to citizens over 27 years old calculating the expected assistance upon retirement.

Persons who are entitled to assistance before retirement age:

1. People with 45 years of official work experience. In reality, there are very few of them in Germany.
2. German women born before 1952 who have fulfilled a number of conditions provided by the state retire at age 60.
3. Disabled and disabled persons.

Pension formula

Mathematically, the pension formula looks like this:

{\displaystyle {\text{Rente}}={\text{EP}}\cdot {\text{ZF}}\cdot {\text{RAF}}\cdot {\text{aRW}}}

where:
Rente
- monthly pension expressed in euros (German Rente)
EP
- pension points (German Entgeltpunkte)
ZF
- output coefficient (German Zugangsfaktor)
RAF
- coefficient determining the type of pension (German Rentenartfaktor)
aRW
- current value of the pension points (German: aktueller Rentenwert)

Pension points EP

EP pension points reflect the amount of pension contributions of the insured for all years of his working activity. According to § 63 of the sixth book of the German Social Code (SGB VI), the amount of pension contributions (contributions to the pension fund) within one year from a salary equal to the average annual salary of all insured persons in the pension fund gives 1 pension point.

Thus, pension points:

• reflect the dependence of the pension on income: The pension point earned during one calendar year reflects the ratio of the individual income of the insured person to the average income of the insured persons of the same calendar year.
• allow you to compare pension contributions for different years: For a person applying for a pension, the relative amount of pension contributions paid is important, and not the year in which these contributions were paid.
• allow you to create a dynamic income-related pension: Pension points together with the current value of the aRW pension point form the basis of a dynamic, income-related pension system.

Data table for calculating pension points for old age pension:

Output factor ZF

This coefficient was included in the pension formula in 1992. Upon reaching retirement age, the insured person receives an old-age pension. To take into account the time of retirement, the output coefficient ZF is used.

Coefficient ZF = 1 if retirement occurs at an age in accordance with German pension legislation. With an earlier retirement, the ZF coefficient will be less than 1, and with a later retirement, it will be greater than 1.

In case of early retirement, the ZF exit coefficient is reduced by 0.003 for each calendar month of early retirement. This corresponds to a reduction in pension of 0.3% for each month. This reduction in pension applies to the entire period of pension payment, and in the future does not depend on the age of the recipient.

If you retire later, the ZF retirement factor increases by 0.005 for each calendar month following the achievement of the statutory retirement age. This corresponds to an increase in pension of 0.5% for each month.

Starting from January 1, 2001, this ZF coefficient was also introduced for the calculation of other types of pensions. The calculation procedure and the value of the ZF coefficient for them are determined by the relevant rules of German pension legislation.

Output factor ZF for old age pension:

RAF coefficient

The RAF coefficient was introduced into the pension formula in 1992 and determines the type of pension. Thanks to this coefficient, it became possible to use the pension formula for calculating other types of pensions.

RAF pension type factor:

Cost of aRW pension point

The current value of the pension point is calculated annually and published on July 1. Its value depends on the size of salaries, on the level of insurance contributions to the pension fund and on the demographic situation in the country. A separate formula is used to calculate the current value of a pension point.

Examples of calculations

Example 1

The worker, born in 1946, worked in West Germany for 45 years, regularly contributing his insurance contributions to the pension fund. Moreover, his salary always corresponded to the average salary of all those insured in the pension fund, which gives him 1 pension point for each year.

At the age of 65, he will retire in autumn 2020 as an old-age pension (RAF = 1) in accordance with German pension law (ZF = 1). At the time of retirement (autumn 2020), the value of the pension point was aRW = 27.47 Euro. From July 1, 2019, the value of a pension point has been increased to aRW = 28.61 Euro.

Calculation of monthly pension for the period from autumn 2020: Rente = 45 x 1 x 1 x 27.47 = 1236.15 Euros/month.

Calculation of monthly pension for the period from July 1, 2020: Rente = 45 x 1 x 1 x 28.61 = 1287.45 Euro/month.

Example 2

The worker, born in 1946, worked in West Germany for 45 years, regularly contributing his insurance contributions to the pension fund. Moreover, his salary was 2/3 of the average salary of all those insured in the pension fund. At the age of 65, he will retire in autumn 2020 as an old-age pension (RAF = 1) in accordance with German pension law (ZF = 1).

Calculation of monthly pension for the period from autumn 2020: Rente = 45 x 2/3 x 1 x 27.47 = 824.10 Euro/month.

Calculation of monthly pension for the period from July 1, 2020: Rente = 45 x 2/3 x 1 x 28.61 = 858.30 Euro/month.

Pensions of miners, civil servants

In Germany, citizens of certain professions receive high pension benefits. This category includes:

• miners, miners;
• civil servants (judges, officials, police, etc.);
• church workers.

Miners upon reaching 60 years of age with at least 25 years of mining experience in Germany receive a special type of pension in the average amount of 1,250 euros.

Civil servants ensure and support the national sovereignty of Germany; they can count on high pensions and additional benefits. Their average income is 2,356 euros.

Teachers, doctors, firefighters and other public sector workers are classified as government employees and receive increased pension benefits.

Church workers in Germany are also entitled to increased pension benefits, which are paid by the church pension fund.

Pension for disabled people, disabled people and WWII veterans

In Germany, local authorities independently determine the amount of material support for citizens who are unable to work for health reasons. The benefit is approximately 600 euros.

Disabled people of the 1st category receive the most - 100% of the average old-age pension. For the 2nd, 90% is charged, for the 3rd – 50%.

The German government believes that WWII participants should receive assistance from the state for the very fact of such status, but there is no uniform amount of benefits. It ranges from 120-600 euros and depends on a number of factors:

• the year of birth;
• availability of awards;
• duration of participation in the war.

Only a German citizen can receive additional payments and benefits for veterans (having a German passport is a prerequisite).

Table: average pension in different countries of the world (data as of February 2020)

List of countries where there are no old-age pensions:

1. Thailand,
2. India,
3. Niger,
4. Kenya,
5. Suriname,
6. Nigeria,
7. Tanzania,
8. Honduras,
9. Iraq,
10. Philippines,
11. Vietnam,
12. Pakistan,
13. China.

Also check out what kind of pension they receive in Thailand, New Zealand and Australia.

Pension for German widows and orphans

The government takes care of families and supports spouses at the time of loss of a partner. You can apply for a “widow’s pension” if the deceased spouse:

• made contributions to the pension fund for at least 5 years;
• your partner had an accident at work;
• the deceased was already receiving a pension.

For the first three months after receiving the benefit, the widower (widow) receives the full amount of the benefit. From the 4th month, the pension falls by 25 or 50% of the original amount, depending on the assigned benefit category.

The widow's pension is automatically canceled if the widower remarries.

Pension sizes for different categories of citizens

There are a number of types of pensions paid only by the state:

• by age: 65-67;
• by disability: congenital or acquired;
• the presence of an injury that prevents you from performing work activities;
• work in the mines and the onset of age - 60;
• death of a second family member (husband, wife).

In Germany, the principle of equalization of pensions in the event of divorce is used. A wife raising children usually earns less than her husband. In court, the amounts received are distributed equally between the spouses automatically, without requiring them to submit statements.

Minimum pension in Germany

When a person reaches a certain age or receives a disability, he applies for payment to the Pension Fund. If the amount of accrual is minimal, less than €789 per month (800 dollars or 55 thousand rubles), then he is given an application for the accrual of a special Grundsicherung benefit. When calculating the amount, all the person’s income and the current specific life situation are taken into account, so the amount ranges from €324 to €404.

Additionally, the state pays for utilities, housing, repairs, medical care and other needs upon provision of documents confirming the expenses incurred.

Average pension in Germany

All information about pension amounts is available on official websites. Its value depends on the gender of the citizen and his place of residence in the country:

• Women have less amounts to pay than men;
• in the Eastern part they receive more than in the Western part.

As of January 1, 2019, the average amount of accruals in € after payment of all taxes is presented in the table:

Calculation for all types of pensions will give an average value of €770. The standard settlement amount is a certain amount that is calculated assuming that certain conditions are met by the citizen:

• experience is 45 years;
• payment of contributions to the Pension Fund without interruption;
• receiving the average statistical salary throughout your working life.

It’s impossible to actually earn this kind of experience:

• a person studies, obtaining a specialty;
• a woman takes care of small children;
• a number of other factors.

On average, the male population is 40 years old, and the female half is 30. In 2020, the government decides to establish a standard calculated pension until 2025 at 48% of the average salary. This should prevent any real decline.

By old age

A person who has 5 years of experience or 60 contributions (1 contribution is deductions per month of work) can apply for government payments. For comparison: in Russia it takes 15 years. At this time, periods without contributions are included:

• official status of unemployed;
• caring for a child under 3 years of age or a sick family member.

Failure to comply with this condition will result in only other types of pensions or benefits. The amount is influenced by factors such as:

• the amount of insurance contributions;
• duration of work;
• age;
• political and economic situation in the country;
• place of residence - Western or Eastern part;
• type of deductions.

Foreigners receive a pension on the same terms as Germans if they have worked in Germany for at least 5 years.

When emigrating from the country, a person has the opportunity to withdraw transfers from the Pension Fund, but only his part.

By disability

Total or partial disability gives the right to receive a pension before the established age. There are restrictions:

• accident at work - 1 month's contribution is sufficient for accruals;
• domestic injury or illness - at least 1 year of transfers to the Pension Fund.
• conclusion of a medical commission indicating whether it is possible to resume work after rehabilitation.

No fees required for 5 years. Partial disability - a citizen can remain at the workplace for any profession for less than 6 hours.

There is no set payment amount. It is 100% of the age average for disability group 1, 60% for disability group 2, and 30% for disability group 3.

Social

One of its types is support for orphans in the event of the death of their parents. The amounts are minimal - 10% of the salary if one person died, 20% if both died. Payments continue until the age of 18. May be extended if the child:

• studies;
• is undergoing military service;
• incapacitated (unable to work).

In Germany, unemployed citizens cannot claim a state pension. For example, in the USA, everyone receives it when they reach a certain age.

Russian pensioners can only count on social benefits when moving to Germany. It was possible to transfer it from Russia, but in 2020 a ban was imposed. Those who have received refugee status receive only benefits equal in size to unemployment payments.

Late migrants can count on a number of benefits if they studied or did military service in the country, worked full time, or were declared incapacitated.

Civil servants and miners

These workers receive special, rather large payments - for civil servants. These include teachers, doctors, police officers, judges, etc. The size of pensions is more than 2000 euros, which is 2 times higher than the average in Germany. Miners and miners with 25 years of experience can count on €1,200 at age 60.

Widows and widowers

Social pension, which citizens who have lost their spouse count on. If they need financial support, they apply for a second one. The following conditions must be met:

• the deceased made contributions to the Pension Fund for at least 5 years;
• cause of death - accident at work;
• the deceased was already receiving payments.

For three months the amounts are transferred in full, later they are reduced to 20-50%.

Important from BBQcash: remarriage is grounds for stopping payments of the second pension.

Orphans' pension in Germany

Upon the loss of one breadwinner, a minor receives financial assistance from the state only if the parent had at least 5 years of official work experience. As a rule, it is 10% of the average salary of the deceased (small pension). In the event of the death of both breadwinners, the minor receives a large pension - 20% of the official income of the parents.

The benefit is paid until the age of 18, but can be extended under a number of conditions:

• an orphan cannot go to work due to physical (mental) injuries (disability);
• studies at school (technical school, institute);
• undergoes military (environmental, social) service.

Prospects for the pension system in Germany

In Germany, 20% of the population is of advanced age or has serious health problems and cannot replenish the state treasury. In this regard, the government is thinking about the need to “push back” the retirement age.

In Germany, it is not customary to celebrate old age with children or accept financial support from them; support for older people falls on the shoulders of the government. Senior officials are discussing the possibility of increasing the percentage of contributions to the pension fund, but no specific decisions have been made yet.

What is the pension abroad?

Also read: Standard of living in different countries - TOP 20 countries for immigration

The size of pension benefits varies greatly in each country because the amount depends on many different factors and conditions.

Thus, the highest pensions are in European countries, while in Asian countries they are quite low.

The largest pension at the moment is in Denmark, its amount is not less than 120 thousand rubles. Also, the pension in Germany is high - about 73 thousand rubles, while it is believed that Germany is the most comfortable country for pensioners. In Israel, the size of pension payments is about 90 thousand rubles, in the USA pensions are slightly lower, namely about 85 thousand in Russian rubles. France also has a decent pension amount, namely about 70 thousand rubles per month. The best pension system, which strives for the ideal, is considered to be the UK system, and the amount of pension payments is about 50 thousand rubles monthly.

In other countries, pension payments are much smaller. For example, in Russia and China the average pension is about 10 thousand rubles per month, in Japan - about 35 thousand rubles. Bulgaria has a fairly low pension, namely about 8-9 thousand rubles per month, this kind of money is not enough for pensioners, so most often they are forced to earn extra money. In Poland, the average pension is 27 thousand rubles per month. In Estonia, the average pension payment is about 15 thousand rubles per month.