The level of pension entitlements in Germany is influenced by various factors, including year of birth, number of years of contributions and income during working life. But which generations in Germany receive the highest The interest rate? Find out here.
Pension amount: These are the factors that influence it
In order to create an overview of the highest pensions in Germany, it is important to know the exact factors that influence the pension amount. The following data plays a crucial role:
- Year of birth
- Number of contribution years
- Income during working life
- Earnings points
- Early retirement and possible reductions
- Receiving other pensions such as survivors’ pensions or disability pensions
Anyone who has made many years of contributions and has a high average income over the course of their working life has a good chance of receiving a higher pension and possibly even the highest pension in Germany. In our pension system, it is not just individual performance that counts, but also overall economic performance and relative income in comparison.
Since the DRV is financed mainly by contributions from the insured, these factors are important. Pension points are used to calculate pension entitlement, with one pension point corresponding to the average wage of the working population. Anyone who collects a total of 45 pension points over 45 years of work is considered an average pensioner or “standard pensioner”.
Baby boomers are the pension winners
In order to make a comparison between new pensioners and previous pensioners, various factors must be taken into account. In its analysis, the German Pension Insurance uses the standard pensioner to determine the pension level by looking at the pension received in comparison to the previous salary. This enables a comprehensive assessment of the changes in the pension situation over time.
The result: Baby boomers, born between 1955 and 1969, have the highest pension entitlements due to a long working life and a high pension level, as statistics from the German pension insurance show. But the following generations, born between 1970 and 1984, are also expected to receive high pensions, as data from the German pension insurance show.
Nevertheless, the amount of the pension remains individual. People of all ages can improve their pension entitlements through a long working life and the possibility of increasing their pension points, as emphasized by the German Pension Insurance.
These generations receive a low pension
The older generations, born before 1955, are among those who received comparatively lower pensions. Back then, wages were significantly lower than today’s, even after taking inflation into account. These lower incomes are also reflected in pensions. In contrast, today the pension period is longer. Pensioners now receive a pension for an average of over 20 years, whereas in 1960 it was less than 10 years.
Since 2000, the average pension has risen from just under 700 euros to 1,054 euros. However, there are also three million more pensioners today than then, which puts almost twice as much pressure on pension insurance. Expenditure is rising from 136 billion euros to 254 billion euros. This increase is caused by the higher pension payments and the larger number of pensioners. Despite this increase, the pension level is still below what many pensioners need to make a reasonable living.
