More and more early retirees are earning extra income in the job market, according to an unpublished study by the Institute of the German Economy (IW), as reported by the “Rheinische Post”.
Since the abolition of the income bonus limit in 2023, the number of prematurely retired individuals supplementing their income has increased significantly. For those who have been insured for a long period, the proportion of early retirees earning substantial supplementary income-more than just from a small part-time job-rose from 10 percent in 2019 to 25 percent following the removal of the limit in 2023. This means that one in four early retirees with 45 years of insurance will continue working, and doing so for more than a minor job. Previously, the supplemental income for early retirees was capped at 6,300 Euros annually, a limit that was scrapped in 2023.
In contrast, little has changed among those who continue working until the statutory retirement age. The study indicates that approximately eleven percent of this group remain in the workforce after retirement.
The attractiveness of early retirement combined with continued employment is also prompting more individuals to retire before the standard age. Furthermore, following the recent reforms, an increasing number of people are choosing early retirement rather than working until the full statutory age. This trend is particularly pronounced among long-term insured persons (those with at least 35 years of insurance), who can retire starting at age 63 with deductions. Their share increased from 19.4 percent in 2020 to 24.0 percent in 2024. Researchers are critical of this development, noting that early pension payouts put financial pressure on the Statutory Pension Insurance system.
