Germans are increasingly opting to take high pension deductions in order to retire early. According to the Federal Labour Ministry’s answer to a parliamentary inquiry reported by the Editorial Network Germany, the average monthly deduction for advanced retirement pensions last year reached €162. This represents a significant increase from €103 in 2020, marking a growth of well over 57 percent.
These discounts are calculated using a fixed percentage based on the actual pension amount. While annual pension increases mean that the average euro value retirees must forego rises, the calculation is ultimately individual. For those wishing to retire before reaching a specified age, 0.3 percent of the full pension is subtracted for every month they retire early. For pensioners with 35 years of insurance, the maximum possible deduction amounts to 14.4 percent.
The number of people leaving the workforce early despite these discounts is on the rise. Data shows that the share of early pensions involving deductions rose from 23.4 percent in 2020 to 30.4 percent by 2025. This growth primarily involves people with 35 years of insurance, though early pensions for severely disabled individuals are also included in this figure.
Sarah Vollath, the Left parliamentary group’s spokesperson on pension policy, told the report that many people are willing to accept high deductions because they cannot wait until the standard retirement age. She criticized the government’s reform plans, stating that they completely ignore reality. She warned that the announced raising of the standard retirement age will only worsen the situation, potentially forcing even more people to retire with deductions in the future. Furthermore, she objected to the government’s intention to abolish the option of retiring without deductions after accumulating 45 years of insurance.
