Workers in Germany are entitled to a pension after only five years of contributions. How much money are you entitled to then?
Hardly any other topic affects workers in Germany as much as pensions. There are more and more older people compared to significantly younger people. At the same time, younger people have to fund older people’s pensions.
The government therefore wants to fundamentally reform the pension system and therefore introduce the so-called “Pension Package II”.
What many people do not know is that in Germany it is possible to retire after only five years of contributions. How much money can citizens actually get?
Retirement after five years of work?
The average person who earns money in Germany currently has to work for 45.2 years in order to receive a pension of 1,500 euros per month, writes Feniks magazine.
However, many pensioners have to make do with little money after a long working life: the average net pension in 2023 was only 1,007 euros.
If you want to retire early, you have to expect deductions. The minimum insurance period in Germany is short: theoretically you get a pension after only five years of work. However, the demand is then correspondingly low.
The pension formula reveals the amount of the pension
You can calculate how much pension you will receive using the pension formula – even with a minimum insurance period of five years.
For this calculation, it is assumed that five pension points were collected during the period. From the pension increase in July 2024, you would receive a total of 39.32 euros per point of earnings.
This means that the average user can expect a pension of 196.60 euros after five years of work.
According to “Deutsche Rentenversicherung””the pension formula you can use to calculate your entitlement is as follows: “5 points of earnings x 1 (access factor) x 39.32 euros (current pension value) x 1 (pension type factor)”.
Pay point: In order to reach exactly one pay point, a worker must earn 45,358 euros gross in 2024, according to “Deutsche Rentenversicherung”.
The value is the result of comparing your own annual income with the average income of all insured persons.
If the value is exactly in the average, it is worth one point.
Access factor: Additions and deductions are taken into account when calculating the pension. There are deductions if you retire before a certain retirement limit, explains “Deutsche Rentenversicherung”.
There are extra payments if you give up your pension after reaching the retirement age. With no additions or deductions, the access factor is 1.0.
The current value of the pension: It is currently 39.32 euros and will be adjusted to the economic situation.
Pension factor: It is determined according to the type of pension. Old-age pensions or childcare pensions have a value of 1.0. On the other hand, widow’s pensions have a factor of 0.55 or 0.6.
By 2036, all 16.5 million baby boomers should reach the retirement age, German media reports. B92.
