Various factors affect the amount of pension rights in Germany, including the year of birth, the number of years of contributions and income during working life. But which generations get the highest rate in Germany The interest rate? You can find out here.
Pension amount: It is affected by these factors
In order to create an overview of the highest pensions in Germany, it is important to know the exact factors that affect the amount of a pension. The following data play a vital role:
- Year of birth
- Number of grant years
- Income during working life
- Pay points
- Early retirement and possible reductions as a result
- Receiving other pensions such as survivor’s pensions or disability pensions
Anyone who has many years of contributions and a high average income during their working life has a good chance of a higher pension and possibly even the highest pension in Germany. In our pension system, it is not only individual performance that counts, but also overall economic performance and relative income.
Since the DRV is funded mainly by contributions from the insurer, these factors are important. Pay points are used to calculate pension entitlement, with one pension pay point corresponding to the average wage of the working population. Anyone who accumulates 45 earnings points over 45 years of work is considered an average pensioner or “corner pensioner”.
Baby boomers are pension winners
To compare new retirees with previous retirees, several factors must be taken into account. In its analysis, the German Pension Insurance uses the corner pensioner to determine the level of the pension by looking at the pension received compared to the previous salary. This enables a comprehensive assessment of changes in the pension situation over time.
The result: The baby boomers, born between 1955 and 1969, have the highest pension entitlements due to a long working life and a high pension rate, as statistics from the German Pension Insurance show. But subsequent generations born between 1970 and 1984 should also receive high pensions, as shown by data from the German Pension Insurance.
Nevertheless, the amount of the pension is still individual. People of all ages can improve their pension entitlements through a long working life and increase their ability to earn points, as indicated by the German Pension Insurance.
These groups receive a low pension
The older generations, born before 1955, are among those who received relatively lower pensions. Salaries back then were much lower than they are today, even after taking inflation into account. This low income is also reflected in pensions. In contrast, today the pension period extends further. Pensioners now receive pensions for more than 20 years on average, but in 1960 it was less than 10 years.
Since 2000, the average pension has increased from just under 700 euros to 1,054 euros. However, there are three million more pension recipients today than back then, which means that the burden on pension insurance is almost twice as large. Spending will rise from 136 billion euros to 254 billion euros. This increase is caused by higher pension payments and the larger number of pension recipients. Despite this increase, the level of the pension is still below what many pensioners need to cover their living expenses.
2024-08-05 07:45:12
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