Early Retirement: Achievable - With These Strategies

Early Retirement: Achievable Strategies Revealed - Early Retirement Strategies Unveiled

In Germany, individuals aged 58 and above who have been insured for at least 12 months in the 30 months before visiting the job center are entitled to two years of unemployment benefit, should they become unemployed. This benefit continues to contribute to their pension insurance for up to two years, even for 61-year-olds, until the earliest possible start of the old-age pension.

Partial retirement, or "ATZ", allows employees aged 57 and above to retire as early as 60. During this period, employers continue to pay social security contributions. The salary during partial retirement is calculated as the last salary divided by two, plus a 20 percent top-up amount.

Reasonable partial retirement contracts offer employees more top-up, so that the ATZ salary amounts to 80 to 90 percent of the previous income. It is important to note that ATZ employees are not allowed to engage in projects for the company, but they are generally allowed to take on a secondary activity, subject to their company's approval rules, with no limit on the additional income from the approved secondary activity since 2023.

Retiring at 62 incurs a maximum of 10.8% discount on the regular amount. Employees with a disability of 50% or more can retire at 62, with a regular old-age pension starting at 65.

Being unemployed does not automatically mean early retirement. Unemployed persons dismissed by their employer can receive unemployment benefits for up to two years, but only if they are at least 58 years old and have worked at least 48 months in a compulsory insurance job within the last five years before becoming unemployed.

If dismissed at 61, one should also receive a severance payment, half a month's gross salary per year of employment. It is worth mentioning that many companies, particularly in digitized industries, are interested in getting rid of older employees.

The degree of disability is decided by the regional pension office upon application. Reasons for disability can include severe bronchial asthma, severe allergies, severe chronic pain, heart, circulatory, and cancer diseases, as well as stroke.

The amount of unemployment benefit is based on the gross income in the 12 months before the start of unemployment. Unemployed people can earn an additional 165 euros per month, allowing for a small mini-job. However, the employment agency can block the payment of unemployment benefit for up to three months without a proper dismissal.

It is essential to note that the pension itself is slightly lower when unemployment insurance pays lower contributions. This article aims to provide a clear and straightforward understanding of the partial retirement and unemployment benefits in Germany, but for specific queries or situations, it is always recommended to consult with the relevant authorities or seek professional advice.