German pensioners will pay more taxes in 2026 0 12

Retirement before the age of 67 in Germany is becoming increasingly difficult: many are concerned about the gradual increase in the retirement age. Since 2012, it has become harder to retire before the age of 67. So far, people born between 1949 and 1963 can still do so before 67 without a reduction in benefits.

For those born in 1964 or later, the retirement age is already set at 67. If they wish to retire earlier, they will have to agree to a permanent reduction in their pension. For each month of early retirement, the benefits will be reduced by 0.3 percent.

For example, retiring at 65 for this group will result in a permanent loss of 7.2 percent of the pension. These changes, among other things, may also lead to a budget deficit in 2026. You can retire at 65 with 45 years of service, but it is important to understand under which specific rule. Germany has two options for early retirement related to long insurance periods.

The first option is an old-age pension with a long insurance period. It requires a minimum of 35 years of contributions, but with early retirement, you will face a permanent reduction in the pension amount.

The second and more advantageous option is an old-age pension for individuals with particularly long insurance periods, or the so-called "pension at 63" under the "45-year rule." This option allows you to retire earlier without any deductions, but under one very strict condition: you must confirm exactly 45 years of paid contributions.

At the same time, the federal government has announced that for people born in 1964 and later, the age for such retirement without deductions will gradually increase and ultimately reach 65 years. When calculating these 45 years, the pension fund takes into account not only periods of employment or self-employment but also certain socially significant periods. For example, it counts the time spent caring for each child until they turn 10. However, periods of receiving social benefits from the employment agency two years before retirement are included in the service only under special conditions. Also, keep in mind that changes in taxation are planned for 2026, which may lead to some pensioners paying more taxes.